What should decide UK about staying in the European Union?

In the past few years, there have been a noticeable increase in the calls for the UK to consider leaving the European Union. A few years ago, they may have enjoyed complaining about EU directives, but it was clear to believe that membership of the EU was in the UK’s interest. What has changed and would they really benefit from leaving – and negotiating a free trade agreement, which enables the benefits of EU membership without the supposed costs?

What is the ideal of European unity? The relative peace and prosperity in Europe since 1945 is a huge achievement, given the past century of inter-European conflict. Britain is an intrinsic part of Europe, whether it likes it or not. It should take the opportunity to be a member of the European Union and help maintain this European integration and harmony. If the UK left the EU, it would be increasingly politically isolated. However, do it needs to be a member of the European Union to achieve this? The UK could still contribute to European ideals without signing up for all the political and economic integration that the EU elite wish to pursue. European countries, who have stayed out of the EU, such as Switzerland and Norway, maintain friendly relations with Europe. The hope of Eurosceptics is that it could leave the political integration of the EU, but maintain all the free trade agreements. Again, the model is that of Switzerland and Norway, which have not been in disadvantage by staying out of the European Union. Evidence suggests the EU would be keen to accommodate the UK as a free trade partner.

One of the strongest benefits of the European union is the fact that it is its main trading partner, and membership of the EU has helped reduce trade barriers – both tariff and non-tariff barriers. European trade is critical to the UK economy. Leaving the EU, could put this important aspect of its economy under threat. Another benefit of the EU is enabling the free movement of people across borders. According to the European Commission, more than 15 million EU citizens have moved to other EU countries to work or to enjoy their retirement. British people have been able to work and retire in other countries. Migration from eastern Europe has helped to fill in labour market vacancies, making the UK labour market more flexible. Migration has also helped to reduce the dependency ratio, which improves the governments budgetary position. Eurosceptics might argue that the free movement of labour from eastern Europe create more problems. Given housing shortage, mass immigration could put strain on UK housing and aggravate issue of overcrowding.

In the post war period, the EU economy performed very well, enabling a sustained increase in real GDP per capita and living standards. This  used to be an argument in favour of UK membership. This is perhaps the biggest weakness now facing the EU. The EU can no longer point to economic stability and strength. Structural problems with the Euro and monetary union are creating a European Union of austerity, high unemployment and low economic growth. Eurosceptics argue that the political pursuit of the Euro and single currency has been at the cost of economic common sense

However, it is worth pointing out that the UK did not join the Euro, so is not sharing the costs of a single currency. However, the economic performance of the UK hasn`t been much better than our Eurozone partners. Leaving the EU, wouldn’t change that much. Finally, it is not in the Euro, and the ECB will not change their economic policy, just because the UK left the EU.

However, critics argue that the EU has become so large and cumbersome that it is too difficult to have a meaningful say  on important issues. Increasingly, issues will have to be decided by Qualified Majority Voting, which means that the UK may have to accept rules and regulations it didn’t support.

My point of view is instinctively to support attempts at European union and integration. Even if there are some costs, like inefficient agricultural policies, the hope is that the net benefits will cover this. In particular, It is hard to believe that the UK can go alone – which some Eurosceptics say. The nature of globalisation is that we are increasingly integrated and interdependent with on our European neighbours (whether we like it or not). However, I can also see the attraction of the viewpoint which says:  why not have the benefits of European membership (free trade, acceptance of qualifications, free movement of capital) without all the unnecessary political integration and economic policies which are damaging the EU? In particular, the attitude of the EU towards the single currency and unemployment is a real cause for concern. In my opinion, the single currency is structurally unsound, and rather than bringing European nations together, is causing a rise in extremist political activity, because of the high social costs surrounding the consequences of austerity and high unemployment.

The management of the EU crisis makes you wonder on the direction of the European Union is folowing and whether it is losing sight of the best way to promote European integration. What is more, leaving the EU, would change things much less than either side might admit. Trade may be relatively unaffected. There is no reason why leaving the EU should have to significantly change the way we do business. But, also leaving the EU, wouldn’t change the problems arising from the single currency experiment. Also the money saved from leaving the EU would be relatively insignificant. It wouldn’t meam much more than of a dent in the UK budget deficit.

Migle Geciauskaite

[artigo de opinião produzido no âmbito da unidade curricular “Economia Portuguesa e Europeia” do 3º ano do curso de Economia (1º ciclo) da EEG/UMinho]