Don’t sleep-walk into chaos: Why the UK should remain in the EU

 
Robin Klein
Germany and Britain are the new motors of the EU – and both have enterprise at their core (Source: Getty)

Thank goodness it will all be over by 23 June. Or will it? The chaos may just be beginning.

I’m personally very fearful about the outcome of the EU referendum. In my view, leaving would be not much short of disastrous. But I don’t want to dwell on the reasons the UK should not leave. There are strong positive reasons for staying in.

The biggest of these is that it is time for the UK to take a strong leadership role in the EU. When we entered the “club”, it was as one of the “sick men” of Europe. It was an economic union dominated by France and the Common Agricultural Policy.

But we are living in a very different world today. Britain and Germany are showing the way forward – both with strong and growing economies, with low unemployment, and both espousing enterprise as the driving force for growth and prosperity.

While the negotiations conducted by David Cameron and George Osborne failed to deliver to expectations (they were never going to), it’s clear they have made good friends and allies among European leaders. It’s equally clear that many European citizens have similar concerns about the EU’s bureaucracy, unwarranted interference in domestic affairs, and the cost of running the enterprise – without wishing to leave.

Perhaps many Europeans value the peace and prosperity that freedom of movement, capital and trade has brought more than we do, and perhaps they are more far-sighted. But all want change and the UK could help to bring it about – through decisive commitment and leadership.

Constant carping from the sidelines may have got the UK some very important opt-outs, but it has not allowed us to influence reform very much. Were we to vote overwhelmingly to stay in, we could take our rightful position at the heart of Europe and help lead the change necessary to shift the EU of the past to the Europe of the future.

We are living in an increasingly connected world, and one where economic power is shifting rapidly eastwards. Cross border regulation – involving everything from security (cyber and otherwise) to banking and patents will be negotiated between the major power blocs of the US, Europe and China. It is naive to think that Britain has the clout to exercise much influence in these discussions on its own.

Of course, we will always be consulted – being the fifth largest economy (for now). We will, however, be on the fringes, and reliance on the special relationship with the US is a foolish long-term dependency.

Now is the time to sit at the top table, lead from the front and change the EU for the better. It’s time to see the EU less in terms of “us versus them”. It’s time to stop measuring immediate benefit versus cost without appreciating the bigger picture – the maintenance of peace within Europe, the advancement of under developed regions, the creative and culturally rich power bloc.

Yet the introspective, self-interested arguments can’t be ignored, and those who support our continued membership do need to play the “balance sheet game” of who loses more, what it costs, and whether immigrants add or subtract from the public purse.

It’s disappointing to hear some intelligent people argue that Britain will be better off economically outside the EU. The facts would indicate the exact opposite – and the crash in the value of the pound following the firing of the campaign starting gun is one pretty clear demonstration of the folly of this belief.

For me the very simple trade equation says it all. The EU’s exports to the UK amount to a little over 10 per cent of its total worldwide exports. The UK’s exports to the EU constitute nearly 50 per cent of our total exports. Half of our exports would be under threat, and even a small reduction would be pretty devastating.

In my own narrow world, London has become the hub for tech startups in Europe – it is a magnet for engineers and developers from France to Poland, from Estonia to Greece. I can’t imagine the consequences of restrictions on free movement but they can’t be good. There is a real risk of the centre of gravity for tech and banking shifting from London to Berlin and Frankfurt respectively.

Incoming investment is a significant job provider and a major strength of our economy. Let’s not kid ourselves that we’d be as attractive a location without unfettered access to the entire EU.

The counter to these economic arguments goes something like this: “we’ll do a trade deal like Norway or Canada”. But this is a naive solution to the problem of being outside. Low tariffs may be agreed, but does anyone who has run a business really believe that, in choosing where to make contracts, where to locate one’s business, that Britain would be preferred to another EU country?

We’ve been pushed into having this referendum by a right wing, jingoistic party (Ukip) that looked for a while to be a real threat. Let’s hope we are not sleep-walking into chaos.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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