Sunday, 29 June 2014

Brexit - not an option, even for a fool

The UK appears to be sliding slowly but surely towards an exit from the European Union. Maybe appearances are deceiving, but the UK's vision of Europe - which really boils down to the single market - and the needs of the Euro Zone economies, are increasingly hard to reconcile. I'll no doubt write a lot about this in the day job over the next year, but economically, for the UK to leave Europe is even worse than for Scotland to leave the UK. The Euro is a currency invented to serve a purpose for which it is no longer really needed, but it can't be un-invented and the European Union needs to be aligned around the need to keep it alive. The march towards Federalism is unstoppable and unless the single currency is ditched, it's necessary. There is dwindling political will within Europe to carve out a space for the UK to co-exist, in the Union and out of the currency and the leadership of the UK is woefully lacking in the political skill to gain any support for its position. And so, here we are, slip-sliding further into the periphery of the continent.

This, by Michael Ignatief in the FT does a good job of capturing how I feel about 'country'. I didn't spend much of my childhood in the UK and although Les Alluets Le Roi is closer to London than Carlisle is, anything 'English' had to be imported. So my mother stocked up with Marmite, Golden Syrup, mango pickle and porridge to the bemusement of her French friends, while I embraced a romanticised view of England fuelled by Enid Blyton, CS Forester, PG Wodehouse, Kipling and Roy of the Rovers, made by Airfix. But while I might have been a starry-eyed patriot in the playground in the 1960s, it took very little time before I was also 'European'. The only regret is that the range of places you could get to on a train in Europe in the 70's and 80's was so pathetically small compared to what anyone with time to spare can do now. Hop on the overnight train to Berlin and catch one in the morning to Warsaw. No visas, no hassle. Of course air travel has made it all easier, even if it's less romantic, but if you're 21 and have time on your hands there's a world of places, ideas and people to see, read and meet, just on your doorstep.

Unfortunately, that's just not what Europe as a political entity is about now. I was in favour of a single currency in the 1990s because the ERM was ludicrously flawed and because I'd learnt as a student that there was a cost to dividing my allowance between francs, guilders, marks and pounds. And it's equally clear that once there is a single currency, then along with a single central bank there needs to be closer fiscal union.

The single currency is no longer necessary. I can already use an app on my phone to buy coffee in New York at an exchange rate that is so much better than I am ever offered by a bureau de change, that I could scream. There's only a cartel or two standing in the way of fair exchange rates for using ATMs and credit cards internationally, and at that point the benefits from a single currency are suddenly much reduced for most people. The inflation, competitive devaluation and volatility of the 1970s can be avoided without currency union. But back in the early days of the ERM, no one realised that technology would do any of things it has and here is Europe, with the Euro and with the need to focus its political energy on building much sounder economic foundations on which to support it. Even if anyone in Brussels wishes that they had never invented the Euro, they don't want to go back and doing so would be devastating. So onwards it must be and the Federalists must win. And as they win, so the anti-Federalists in the UK moan.

And it is a shame, because I don't want to choose between a Federal Europe and an isolated, irrelevant economically-challenged England. I don't want either of these things. I want to do what I'm doing tomorrow morning - get on a plane, fly to Athens and sit in a bar discussing the world with people whose perspective is different from mine and from whom I can't fail to learn a great deal. But for what it's worth, if I can't have a single market with free movement of goods, capital, people and ideas, I'll vote for Europe, however I have to take it.

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