Britain must remember to champion what is best about Europe – its capacity to deliver progress through shared freedom.
The best road to progress is freedom's road, said John F. Kennedy. The European Union, along with other institutions like the European Court of Human Rights, is one of the most important manifestations of European citizens’ desire to be free. Membership of the EU is not just an economic prize, but marks a graduation for European countries into a commonwealth of prosperity, peace and freedom. Joining the EU is the end of one chapter and the start of another.
As Europe has become more united, it has grown in prosperity through the deepening of the Single Market and the creation of the euro. Yet, Europe was at a fork in the road during the economic crisis of 2008-2010. European states could have slid into protectionism, but they did not. Europe could have ignored the potential danger of an Iran armed with nuclear weapons, but continued to push a European position on sanctions with the US. Many believed the euro’s days were numbered, but the political will was there to keep it alive.
More however needs to be done in three areas especially: making the EU more competitive, making sure that Europe acts more coherently on the world stage, and continuing to enlarge.
First, competitiveness. The EU’s Single Market Act of 1992 brought about considerable growth. Estimated gains from the Single Market in the period 1992-2006 for the EU 25 countries amount to 2.2 % of EU GDP (or 223 billion euro), representing an extra income of €1,450 per household, and 1.4 % of total employment (or 2.75 million jobs). But the Single Market still remains incomplete with barriers in the services sector – in the digital economy a true single market could increase the EU’s GDP by 4.1 % by 2020.
This necessity to reform extends as much to greater fiscal coordination to strengthen the euro as it does to the EU’s multi-billion euro annual budget. At about €130bn per year, it is a significant amount of money which should be spent on research and cross-border infrastructure rather than directly subsidising agriculture. The UK must push for a rebalancing of the EU’s budget towards fostering growth and competition, if necessary by putting its rebate on the table to show seriousness of intent.
Secondly, the EU must act more coherently on the world stage. Whilst Europe will always be a shifting landscape of positions on many issues, it makes far more sense to thrash out unified positions in as many areas as possible. Energy is a prime example. Russia has played divide and rule for the last ten years, offering cosy deals to Germany, Italy and Greece whilst freezing out critics like Poland and Slovakia. The EU should agree to negotiate through the Commission on these issues whilst spending more on a fully inter-connected EU energy grid to ensure energy security and competitive prices.
Thirdly, Europe must continue to enlarge. The re-unification of Germany presaged the re-unification of western and eastern Europe, and had the air of manifest destiny about it. The business of enlargement, however, is not finished. Along with the states of the former Yugoslavia, Europe must not make the historic error of shunning Turkey. No one is talking about accession any time soon, but with an ageing population and a rising Middle East it makes both economic and geo-political sense to anchor this dynamic, largely Muslim democracy into our European commonwealth. We must also keep alive the hopes of Ukraine, Belarus and Georgia – we have moral duty to give these countries a political destination for their long journey towards freedom.
The UK has to be at the centre of all these things. We are part of a European commonwealth that faces similar challenges of ageing populations and rising global powers with different views about what the world should look like. Our economy is more intricately bound into the fate of Europe than any other.
In the future, we will almost certainly have euros in our pockets with King William’s head on them, we will probably have elected pan-European politicians and we will have more coherent European political parties. These developments will be to the good, but will not be the business of today’s generation of politicians.
Today, we must promote our aims with as much feeling of ownership of the project as that shown by, for example, the French. Talk of withdrawal continues to bubble away amongst fringe groups, but every mainstream political party in the UK runs on a platform of continued membership of the EU. Our interest in the EU is to promote competition, open markets and sustainable economic growth.
What binds the past, the present and the future, and the generations of politicians who have and will continue to build the European commonwealth, is the idea of freedom, and what it can achieve.
This piece is published in 'What future for Europe?', the accompanying pamphlet to Policy Network's conference on the future of the EU on 11 February 2011
Roland Rudd is the founding chairman of Business for New Europe and the senior partner of Finsbury Ltd
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