Sunday, 12 June 2016

We're in for a rude awakening if we do not leave the EU

Where the Leave campaign has got it wrong is pointing fingers at the EU for what it has done to Greece. It absolves the Greeks of any responsibility. They were complicit in the mutual deception that took them into the Euro. They saw what they thought would be an opportunity to raid the EU kitty.

Fast forward to today and we see the consequences of Greece's failure to reform its civic institutions and its banking. If ever a country needed a reform like Thatcher, it's Greece. And this is what the EU, namely Germany is now doing. Far from imposing "harsh austerity", it is simply insisting on structural economic reforms and adherence to ILO labour conventions. The left will piss and whine about it, but while social entitlements may be free at point of need but they must still be paid for. Greeks evidently think differently. The Germans who have paid for it have rightly drawn a line in the sand. So would we.

Paying tax has become almost optional in Greece. Much of the economy is still a cash economy and little functions without a bribe. It's a rotten country. What the EU is doing is long overdue. If you want to shout at the EU about it, you need to be asking why they didn't do this in 1999? Had they done so we might not now be seeing Greece as a bankrupt basketcase. Had the EU done this in Spain, Italy and Portugal as well and we might not have seen the Euro brought to the brink. These reforms are now a masterclass in shutting the stable door when the horse is half way to Bulgaria.

And though Greece may complain, their intent was indeed to stay in the Euro. You make a deal with the devil then you must dance to his tune. And now we are seeing the same petulant whining from France, with media histrionics suggesting France is edging towards Frexit in the face EU imposed economic reforms.

Wherever you look in Europe you find whiny, childish socialists crying "neoliberalism" at the EU for doing that which should have been done decades ago. This is cited by some as evidence of the EUs contempt for democracy - invoking the words of Jean-claude Juncker - "There can be no democratic choice against the European treaties".

Superficially this sounds like the words of a despot, in in factual terms he is right. If you sign a contract you can and will be held to the terms of it. Especially when the face of the currency is in question - a currency they very much voted to join. In order for the Euro to work, there must be economic convergence and there must be modernisation and reform. Not least dealing with the mainland's endemic corruption and liberal attitudes to implementing regulations.

In this one might even say France has an unfair advantage over Britain in that the single market rules tend to apply asymmetrically. It is a deliberate snub. The only promising signals that anyone in Europe is getting its act together come from Spain where they are finally getting to grips with rural tax collection and charging expats the proper rates.

Now look at Britain. Britain has a hugely effective tax system. We get the usual histrionics about tax avoidance but as a rule our tax collection is pretty good, with council tax collection rates being closer to 100% than ever. Britain does good governance. That is what makes us exceptional and that is what makes us successful and the choice destination for business. It is also why the banks will not leave the City should we leave the EU. The EU is not imposing sweeping economic reforms on the UK. Why? Because it doesn't need to.

But central to this is poor old Germany. Germany does have its act together. In many respects it has stuck an optimal balance between socialism and capitalism. It has strong unions, effective trade guilds and well defended rights. This means that Germany gets the bill for bailing out the rest of the dysfunctional Eurozone. And though they may complain, they too must also accept responsibility for what they signed up to. Born of their war record, Germany's guilt complex has committed itself to do penance for all of Europe and is still paying the price.

And so as much as Britain has a choice to make, all of Europe has a choice to make too. Do they want the Euro to succeed? If they do then they must swallow reforms and get a move on with it. It will not survive otherwise. The EU knows this which is why they have put their foot on the gas. It must take decisive and rapid action. It may also need a new EU treaty to double down on the Stability and Growth Pact. Continued limbo dancing will not suffice.

If the EU presses ahead with these reforms, there is every reason to believe the Euro can survive and Europe will be better off for it. That is a big if though. As the consequences of their decisions catch up with them, the people of Europe will bitterly complain and put the brakes on, demanding that their governments resist. Most likely such petulance will win out - which is why it is more likely that the Eurozone will continue to stagnate and teeter on the brink. I think that's about as good as it's ever going to get because there is insufficient mandate for full economic union.

That may even be the reason we never see another EU treaty. We will see another internal Eurozone pact specifically to avoid seeking public consent. It is that which makes them democracy dodgers.

This is where I become a complete hypocrite. I have done nothing but preach the need for democracy and why sovereignty for Britain is paramount. But does Europe have that luxury? They did after all vote to join the Euro, knowing it was next to irreversible. By taking measures to maintain the currency, the Euro is following that mandate. It's something of a paradox isn't it?

It seems we have reached stalemate. We have reached the crunch point where the consequences of building an EU empire by deception become apparent and ineluctable. What Europe cannot afford to do is avoid making a decision. It must wholly commit and accept the consequences of its choices, or it must break this union. This creaking stalemate cannot go on forever can it? In fact I would go as far as saying that without a firm commitment a democratic correction is inevitable.

So it comes down to what Europe actually wants. European nations can retain their culture, sovereignty and the endemic corruption and stay broke or they can go all in, make the reforms the signed up for and be as prosperous as Britain. That though becomes more of a spiritual question than an economic one.

As Britain has broken free of its socialist bindings it is a more dynamic economy and we are evolving at lightning speed. So much so that it's all changing a bit fast for some. That's your Ukip constituency right there. Britain very much is "neoliberal" country. You can have it all so long as you can afford it. And if you can't, that's tough. You get nothing. Not everyone is happy with that and there is a cultural ennui as people start to question privatisation and economic liberalism. We are not alone in this either. America is suffering from a similar existential crisis.

I cannot say for certain what the future will hold, but I do know that Europe must resolve the EU question. If it is to survive then it will need to take control and be firm. And if that is their choice, they must own the consequences. What is clear is that Britain has no need of it. We do not need the EU to impose its economic or social agenda on us. We are a liberal and progressive country because we are liberal and progressive people. Maybe there's something in the water? Moreover, Britain will always grumble and complain. It can only be an unnecessary element in the equation in answering that European dilemma. We will only be an obstacle.

Europe is crying out for change. It needs to change. The world has moved on and out of the shadow of World War Two. It faces new challenges and so its institutions must reform. And this isn't going to happen if we are trying to hold all these competing ideas together. We must simplify the equation and remove unnecessary elements.

Europe is suffering from Locked-in Syndrome. We can see the fear and panic building up in the eyes of Europe but it is unable to move. There needs to be a major change to the EU and that won't come unless something shakes Europe out of its complacency and procrastination. Only Brexit can do that because our own leaders here in the UK are just as much part of the problem in that they do not see the path before is and the consequences of what they have done. A decision must be made for Europe and if our leaders will not make one, then we must do it for them.

We are told that other countries may follow us out if we leave. The Euro makes this implausible but it is clear that Europe's is waiting for Britain to show leadership by breaking the deadlock. If we do not leave then we are voting to bury our heads deeper in the sand ensuring that vital fundamental reform never happens. It may well buy us a decade or so of comfortable stagnation but we will be in for a rude awakening. The only certainty is uncertainty.

By leaving the EU now, using the EEA as a departure lounge mechanism, we know most of what the risks are. And we can manage those risks. Knowing the risks is half the battle won. We can set about a managed exit over some years that will see the EU free to resolve is existential question. Brexit is the safer bet for both Britain and the EU. A vote to remain on the other hand means temporary certainty, but leaving what happens next entirely to chance - as once again Europe ducks the important questions. I fear there will be a price to pay for our moral cowardice.

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