Monday, May 30, 2016

Again, voting Remain is not voting for the status quo

In your humble Devil's last post, I pointed out that a vote to Remain in the EU is, in fact, not a vote for the current situation.

As a swift adjunct to that, I find this July 2015 article, from Andrew Lilico, which neatly reinforces the economic problems within the Euro area.
So when British politicians propose that EU political integration should slow or that the EU should prioritize some other objective (e.g. the Single Market), that is not merely seen as unattractive—it is impossible.

The reasons why are economic. As was widely discussed in the UK debate about the euro in the 1990s and early 2000s, to make a single currency such as the euro work, one needs an adequate combination of trade integration, similarity of economic cycles (so that one size fits all interest rate and exchange rate policies do indeed fit all), capital and labour mobility (to offset any “asymmetries” in economic shocks – that is, economic shocks hitting some parts of the Eurozone harder than others) and fiscal transfers (to compensate for any large or long-term differential performance that is not offset by capital and labour mobility).

The Eurozone has fairly good trade integration, some material differences in economic cycles (though not especially larger than the differences between regions within the UK or US), and fairly high capital mobility. But even when they occur at around the same time (so cycles are not out), economic shocks affect some parts of the Eurozone much worse than others (as we have seen in the Eurozone crisis). And, Ireland excepted, labour mobility is not particularly high (despite all the complaints about immigration in some Member States).
That means—as has been argued all along—that for the Eurozone to work over the longer term there will need to be much more significant fiscal transfers between regions.
Which is precisely what I articulated a few days ago. And, of course, in order for the economic scenario to work, there must be more political union.
If adequate economic mechanisms and political union are not introduced, it is believed that the Eurozone crisis will return and anti-European sentiment will (rightly) increase, ultimately destroying the Eurozone and the EU project as a whole. Banking union and constraints upon Member State budgets have been introduced. Even more political integration is on the way.

So in the Eurozone, the answer to increased Euroscepticism is not seen as any form of rowing back on integration. Quite the opposite — Euroscepticism has arisen because political integration had not proceeded rapidly enough.

For the Eurozone and EU to survive at all, deeper political integration, including Eurozone-level tax and spending decisions and democratic mechanisms to oversee them plus reduced control over tax and spending decisions for Member State, are an existential necessity.
Quite so. Lilico's conclusion implies that the current referendum may be very far from being the last turning point for the UK in its relationship with the EU.
This all means current debates about whether the UK will have a referendum and how folk will vote is of only passing significance. What counts fundamentally to whether the UK stays in the EU after about 2020 is whether there are any non-euro members of the EU at all, given the existential economic necessity of the Eurozone forming into a deeper political union. At present that seems highly unlikely.
It may be that, regardless of the result of the referendum on July 23, the UK will have another chance to choose its destiny within the European Union. That is the optimistic view.

The less optimistic view—at least, for those of us who have no interest in being swallowed up by a European super-state based on Napoleonic Law (rather than the Common Law)—is this: that our leaders will view any vote against leaving the current arrangement as an affirmative decision to enter into this superstate.

That must not be allowed to happen. For all that the Leave campaign have been incompetent in being able to articulate this unpleasant future, the Remain campaign have expressly avoided telling the British people the inevitable future of political and economic integration.

If the British do not vote to Leave the status quo, only the extremely dishonest would take that to mean that they have signed up to a federalist future.

Thursday, May 26, 2016

Mr Hollande can fuck right off, frankly

France's wildly successful President*, Mr Hollande has issued a stark warning that Britain must back and integrated EU or quit.

To quote Mr Hollande:
“There is no other way. It's a horrible path, but it's a logical path. Leave Europe, leave Schengen and leave democracy. Do you really want to participate in a common state? That's the question."
That's a really good point, you know? I hadn't realised that you could only be a democracy if you were in the EU. I'd thought that there were democracies outside of—and, indeed, before the formation of—the EU. Apparently this is not the case.

Of course, this neatly highlights one of the arguments that Remain have kept rather quiet about: the fact that remaining within the EU is not to maintain the status quo. The Eurozone, in particular, must have a central government, or it will fall apart—particularly economically and fiscally.

But to maintain, practically, the social and Welfare aspects of the EU, there requires further integration too, e.g. the proposed EU Tax Identification Numbers.

That nice Mr Cameron maintains that he has negotiated an opt out from all** of this malarkey but, frankly, I don't believe him—partly because he is a proven liar (especially on the topic of the EU). So the UK will have to look forward to more integration too.

Now, you may think that all of this is a good thing—and that's your prerogative. I, of course, think that you are completely fucking wrong***—and I will vote Leave, regardless of the scare stories—but at least we can have a proper debate the issue in an adult fashion.

*I may have deployed some sarcasm here.
**Or is it only some? I'm not clear. Because there's no documentation.
***The scary clown sums up my feelings on the matter rather well.