London Summit—The Future of Europe

October 14, 2015

Should Britain Bail on the EU?

Two leading British conservatives were united in criticizing the European Union during the London Summit’s “Future of Europe” discussion, but called for different outcomes to next year’s vote on the UK’s membership in the 28-nation partnership.

Nigel Farage, leader of the UK Independence Party, wants voters to opt out of the EU entirely. Howard Shore, executive chairman of Shore Capital and a prominent supporter of the Conservative Party, said Britain can use the pending ballot to force changes in the EU’s structure and policies. Nevertheless, he hopes voters choose to remain in the union. The referendum is expected to be held before the end of 2017.

 “My recommendation is for the British public to say we want to stay, but in the meantime we have an opportunity to turn the heat up on Europe,” Shore said. “We can put a lot of pressure on Europe to improve.”

The pros and cons of EU membership dominated a discussion that also addressed the Transatlantic Trade and Investment Partnership (TTIP), a proposed free-trade agreement between the EU and the United States. Shore and Farage were joined on the panel by Peter Beyer, a member of Germany’s Bundestag, and Juan María Nin Génova, president of the Spain-USA Foundation.

Beyer, generally supportive of the EU, said the union hurt itself by expanding too quickly. EU policies have been hindered by the cultural and economic differences among its member states, he said. “We shouldn’t make the mistake that we did with Bulgaria and Romania, and maybe with Greece, in the early days, that they were welcome to become a full member of the union without meeting the standards.”

Shore’s frustration with the EU stems in part from regulations that he said harm small businesses. In a recent survey of small to medium-sized UK enterprises, or SMEs, 80 percent of respondents said they want Britain to reclaim regulatory authority for employment and workplace health and safety. Nearly half said they would pay higher wages and employ more people if the UK were not part of the EU, Shore said. He called for a “two-speed EU” that would allow nations outside the euro zone to choose whether to adhere to specific policies. A bifurcated structure might encourage more countries to follow the example of the UK, which has retained its own currency while holding membership.

“What the businesspeople are saying is this system is a major hindrance to our success,” he said.

According to Farage, such reform to restore sovereignty in specific areas is impossible because EU leaders want to expand their authority. He suggested that the EU envisions itself as a pan-European state that would function as a nation, implementing foreign as well as economic policies.

“It has a flag, it has an anthem, it has a police force and it wants an army,” Farage declared. “It’s pretty clear it wants to flex its muscles.”

Beyer and Génova voiced concern about populist sentiments that might prevent the EU from signing the TTIP. More than 100,000 people in Germany turned out recently to demonstrate against the pact, Beyer reported.

“People are afraid about lowering … environmental standards, labor standards, which is not going to happen because the EU is negotiating with the Americans to fix high standards,” Beyer said. He called the agreement the “most important trans-Atlantic project of the past decade.”

The TTIP would offer a significant boost to job growth and SMEs in Europe and also strengthen the economic and political ties between the union and the U.S., Génova emphasized.

“Behind it, there is a strategic and geopolitical issue,” he said, referring to free markets and historic economic principles associated with the British philosophers John Stuart Mill and David Hume. “If we do not jump into (the TTIP) because of these demonstrations, the press, and far-left positions, we will miss out on an opportunity.”