What did Mrs Merkel really mean when she said that Europe would have to rely on itself for defence?

Some commentators on Mrs Merkel’s speech to a recent party rally on the subject of defence seem to conclude that she was condemning the USA and the UK for deserting Europe.  I think she meant something rather different.  She may well have been rattled by the continued reminders from Donald Trump that the European nations have sheltered under the umbrella of US defence spending for far too long.

A couple of years ago NATO met in Wales and agreed that all members should spend 2.0% of their GDP on defence.  They agreed to that and then went away and did nothing to keep their promises.  Germany is a particular outlier being such a rich country.  Surely 2.0% of GDP is a mere fleabite to a country with huge trade surpluses and a budget in credit?  Somehow Germany’s history seems to have made it difficult for Mrs Merkel to keep to what she agreed in Newport.  Let us look at the statistics, courtesy of Eurostat, the European Union’s official statistical data base.

Of the current 28 member states of the European Union only Greece and the UK spend more than 2.0% of GDP.  Greece tops the list at 2.7% but as its GDP is one third below what it was in 2008 and still shrinking this is not a big contribution to the total.  The UK comes next at 2.1%.  Estonia spends 1.9% but its economy is pretty small. The only other large contributor to the common European defence effort is France at 1.8%.  Germany lags behind at a miserable 1.0%.

Worse still, Eurostat estimates that more than half of European defence spending is on employment costs.  Spending on equipment and particularly on Research and Development is pretty small.  Only the UK and France are substantial spenders in the R and D sector.

When the UK leaves the EU it will leave a big hole.  With 14.8% of the EU total economy it represents 25% of its total defence spending and a whopping 40% of EU spending on defence R and D.

The European nations have been hiding under the US and UK (France excepted) defence umbrella for far too long.  It is time for them to get real.  They say they are going to create a Europe army. First they will have to find the funds to pay not only for some fighters but also for guns, helicopters, ships, tanks and all the other equipment necessary to ensure they can take action if required.  That, it seems to me, is Mrs Merkel’s real message –  Germany has been the target of Donald Trump’s pointed barbs and she is rising to the bait.  If, as seems likely, she is reelected as Chancellor of Germany we should expect a bigger German defence budget.

Now Mr Junker claims leak of Downing St dinner was a ‘serious mistake’

Goodness me, now Mr Junker has told the German newspaper Handelsblatt that the leak from the Downing St dinner was ‘a serious mistake’.  In my last post I said that the behaviour of the Commission and its staff rendered them unfit to conduct negotiations with the UK.  Having admitted ‘a serious mistake’ is he now going to apologise and explain what he will do, as the EU’s Chief of Staff, to ensure that nothing like this happens while the negotiations are proceeding?

 

The European Commission is not fit to conduct negotiations with the UK – an independent body is required

I have been pondering the curious behaviour of the European Commission over several days.  The European Commission, both its members and staffers including the President’s Chef de Cabinet, are paid civil servants.  They are supposed to be the details people – and clearly think that they are supremely competent at the details.  In my experience ( seven years at the Economic and Social Committee) they are pretty poor at the details – especially when details get in the way of grand ambitions.

The Commission may once have thought of itself as the motor of European integration, able to act on its own.  Since the Lisbon Treaty the balance of power has shifted.  The member states are now more clearly the principals, the Commission is their agent.  In conducting negotiations with the UK the Commission is acting on a ‘mandate’ given to it by the remaining 27 member states.  At all times the Commission must be cognisant of the interests of the members they have been appointed to serve.

It is true that Commissioners swear allegiance to the European Union on taking office.  This is an indication that they must leave behind any national preferences and act only in the interests of the Union as a whole.  Acting in the interests of the Union as a whole does not mean that they should prioritise the project of European integration even if pursuit of that objective harms the member states and the people who live in them.  The European Union is an international organisation, formed by Treaty between sovereign nations.  The Commission is not fulfilling its purpose if its ideals, schemes and actions do not reflect the interests of its members.

The way in which the Commission President, Jean Claude Junker, and certain Commission staff (including M Barnier who is temporarily on the Commission’s books) have spoken about the UK in recent days indicates that they believe that they, and they alone, are the true interpreters of the interests of the 27 member states.  They also seem to believe that those interests are best served by insulting the UK for having the temerity to try to leave the EU.  Some Heads of State and national ministers may be shaking their heads at this behaviour.  In the end it is they, not the Commission, who will have to agree on the results of negotiations.  Many of the issues that will come up in the negotiations will require agreement between the UK and another member state – the Irish Border being an example.  Specific trade relationships will also require bi-lateral agreement between the UK and individual member states.  The EU leaders may have met for five minutes to swear eternal agreement and that they will act as one but as the details come onto the table different interests and attitudes are bound to  come into play.  The art of negotiation is to weave all these interests into a coherent whole where everyone is at least satisfied if not claiming total victory.

The European Commission, by its recent behaviour,  has displayed itself unfit to conduct negotiations with the UK.  There have already been suggestions that an independent arbiter may have to adjudicate on the exit bill.  Perhaps the whole thing should come under an independent arbiter.  After all membership of the EU is attained through signing a Treaty and there is international law on Treaties including processes, rights and obligations when a member decides to leave.  The EU is not above international law – whatever the Commission, or some of its leading figures, seem to believe.

Does Mr Junker know how the EU works? Apparently not in relation to citizenship

An ugly spat broke out when ‘sources’, probably a Junker aide, leaked Mr Junker’s apparent displeasure at what he heard from the UK at dinner with Mrs May.  One key issue is that of future ‘rights’ for the millions of the 27 member states’ citizens living in the UK and for those UK citizens living in the 27.

Why the spat?  Because, of all the rules of the EU one matters more than all the others. The right to free movement of all those designated as ‘EU citizens’ in the Maastricht Treaty of 1993 is inviolable.  ‘EU citizens’ may work, live and study wherever they like in the EU together with all their family.  While not necessary for the establishment of a single internal European market, or for economic integration, EU citizenship serves as a powerful political symbol of European togetherness.  Indeed, with support based on economic integration flagging because it has created winners and losers, the free movement of people has become THE most powerful symbol of European attachment.  It is the most highly valued aspect of the EU in polls conducted by Eurostat.

But, there is a catch.  EU ‘Citizenship’ is something that has been tacked on to national citizenship.  It is over and above – a sort of layer of extra rights.  It provides for free movement but it does not provide for national citizenship rights in the country of destination.   You have to be a citizen of a EU member state to acquire EU citizenship.  The basic rights of citizens come only with national citizenship.

The rules by which national citizenship are governed are very varied.  Take the question of birth.  We have one grandchild born in Italy but he has no right to Italian citizenship.  Another was born in Wales and automatically got the right to UK citizenship.  You can apply for Irish citizenship through a grandparent born on the island of Ireland. For a summary of the rules on EU member states citizenship see Wikipedia.  They are astonishingly different with few common threads.

That is why Mr Junker is in such a funk about the negotiations on citizens’ rights after Brexit.  Mrs May can offer her plan but he cannot offer a single plan for the EU.  Offering EU citizenship will not solve the problems that might be faced by UK citizens living in France, Spain or Italy.  Whether or not their rights are satisfactorily maintained is up not to the EU but to France, Spain and Italy.  For the EU to negotiate as one unit it will need to agree to a new Regulation making the 27 sets of rules uniform.  Over to Donald Tusk to bring the other 27 in line on the basis of a draft from the Commission.  The process could take decades.  The only alternative is separate bi-lateral agreements between the UK and each member state.

Before Mr Junker accused the UK of not knowing how the EU works he should have boned up on the rules himself.

When can we expect to read Mr Blair’s dodgy dossier on Brexit?

Tony Blair, ex PM, infamous for entering the Iraq conflict on the basis of a ‘dodgy dossier’ of non-facts, has returned to the political fray.  As the self appointed ‘Remainer in Chief’ he says he is so passionate about the European Union that he must return to the active political scene to campaign in the general election.  Not for any particular party, mind, just for the EU.  He believes that leaving the EU, and in particular its single market, will bring death and destruction to the UK economy.  We have not yet see the ‘dossier’ which he relies on to support his belief.  Perhaps he is still at the early stage of belief before the dossier has been compiled to support his ‘passion’ for the European Union.  He has an immense staff so perhaps someone is hard at work on it.  It will make interesting reading.  But, I forgot, he never actually published his Iraq dossier.  Not even his colleagues knew what it contained.  The public certainly never had sight of it.

Now, Tony Blair is not only infamous for his Iraq dodgy dossier but is also known to have actively promoted the UK’s membership of the Eurozone – without any dossier at all, just his ‘passionate belief’.  As is well known, the campaign waged by politicians of all parties to join the Euro was finally killed off when Gordon Brown published his ‘five economic tests’ as conditions for membership.  These were an elaboration of the ‘Maastricht Criteria’ dreamt up by the late Sir Alan Walters for Margaret Thatcher.  The Brown tests were actually invented by his adviser, Ed Balls (said to have been concocted in the back of a taxi).  Thanks then to Alan and Ed.  The five tests were eventually backed up by weighty documentation from civil servants in the Treasury.   But, even as recently as 2011 Blair reportedly still thought that the UK could join the eurozone.   It is a subject about which he obviously knows absolutely nothing – but when did facts matter to him?

Blair is as dangerous a politician as Donald Trump.  He shoots from the hip.  He relies on instinct when calm consideration might be called for.  He was not above twisting evidence when in office.  The British voters are not likely to trust him this time.  His intervention could do more harm than good to his cause.

Tony Blair lives in the ‘alternative galaxy’ of Jean Claude Junker in which the European Union brings with it only benefits and rights.  It has no downside at all (tell that to the Greeks or even the Italians).  For sixty years the EU has rolled on bolstered by dodgy dossier after dodgy dossier to prove that this or that new law will bring this or that percentage of extra economic growth.  In a free society dodgy dossiers are not trusted by the voters, not should they be.  Tony Blair should publish his EU dossier before he faces a crowd of voters.

The twenty seven EU states meet in Brussels – all together now but for how long?

Today the leaders of 27 member states of the European Union met for fifteen minutes or so in Brussels to sign off a prepared statement on their negotiating stance with the UK as it leaves the group.  The statement says ‘Throughout these negotiations the Union will maintain its unity and act as one’.  Well, maybe.

The 27 member states are a heterogenous group with very different interests.  It is hard to get them to agree on much these days beyond lofty ambitions.  Even when they do agree to act in concert, as with the migrant crisis, their different interests soon take them in diverse directions.  This is a real danger in the negotiations.  The UK has but one interest.  The EU, in spite of its strong words today, has 27 separate interests and they cannot be suppressed throughout this process especially when it gets down to the details.

Even if the negotiations come to an agreed conclusion between the UK and the 27 other governments (acting as one), the issue of ratification remains.  It is not yet clear precisely which elements of any agreement are likely to require ratification processes beyond the agreement of the heads of state.  But any agreement on relationships following agreement on terms of departure – which Article 50 indicates should be part of the process – is likely to require ratification by the Parliaments of the member states and in some cases through popular vote in a referendum.  There are several examples of failures at this stage from the European Defence Community in the 1950s onwards.

There are many hazards on the way to a successful agreement.  First the question of the money – which reveals just how expensive membership of the EU is to the UK. Then the question of citizens’ rights.  While the UK may agree rights for EU citizens living in the UK it is by no means clear just how the EU intends to get 27 different countries to agree reciprocal rights to UK citizens living in the EU.  It will probably have to agree a new Regulation or Directive to ensure that all comply.

Some other key points emerge from the document.  The EU insists that the UK cannot have the same rights as it had as a member.  There is no mention of the obligations that membership entails.  The UK has weighed up the balance between the rights and obligations of membership and decided that the obligations outweigh the rights.  The membership fee is high, there is little evidence that the subs are put to good use (read the reports of the EU’s Court of Auditors), and the EU’s closed attitude to trade means that the UK cannot exploit its comparative advantages globally so long as it is tied to the EU.

The negotiations will be long and arduous but do not expect that the stunning display of immediate EU unity displayed today in Brussels will last the course.  The UK has only one interest to defend – the EU has twenty seven interests.

One thing is clear.  Membership of the single market includes freedom of movement for people to live, work and study throughout the EU.  Most parties in the UK’s general election say that they want to control immigration.  Those that also argue that the UK should ‘stay in the single market’ should read the document issued today. Leaving the EU means leaving its single market – there is no way the UK can leave the EU and stay ‘IN’ its single market.

The UK general election – what chance for the ‘remainers’?

The starting guns have been fired for Brexit with article 50 and for a UK General Election with the approval of Parliament.  The ‘remainers’ are seizing the chance to promote their cause.  All parties claim that they respect the views of the British electorate in the 2016 Referendum, but some parties respect the views of the people more than others.  Both the Liberal Democrats and some in the Labour Party  ( notably Keir Starmer its Brexit shadow minister) now seem to want somehow to worm their way back into the EU.  The Lib Dems and Keir Starmer have stated that they want to remain in the single market and in the customs union.  They say they accept that the UK leaves the EU but that it should remain in its flagship project.

Remaining in the single market and in the customs union without being a full member of the EU is the worst of all possible worlds.  It is, in effect, the Norway option.  It might work just about for Norway but it could never work for a country the size of the UK and with the varied economy of the UK.  All the laws and rules would be made by the institutions of the EU and we, not being members, would simply just have to put up with them.  And, we would still have to put up with the judgements of the European Court.  We would have given up our seat at the table but not regained any portion of our capacity to make decisions suitable for ourselves.

Those who advocate this policy clearly have no knowledge at all about the nature of the European Union or how it works.  Yet they claim to be the true ‘Europeans’.  Before they open their mouths on this subject they would do well to find out the facts.  I should issue copies of my 2016 book, ‘In or Out: An Impartial Guide to the EU’ to all Lib Dem and Labour candidates to assist them with queries from voters (who are not all that silly) and the press.  Perhaps I should find a sponsor to do this for me!

The customs union represents the wall around the protected economy of the European Union.  It was pretty strong when first constructed but today is full of holes from the wide range of WTO rules, specific trade deals and globalisation.  Most of the rules for international trade are today made not by individual states or groups of states like the EU but in international organisations both state supported and private.  The EU merely puts them into effect for all its members.  The single market is, even by the most ardent pro-EU supporters, widely recognised to be incomplete.  It works for manufactured goods but hardly exists for services.  And, indeed, it will never be ‘complete’ because much of economic activity is based on local markets.  Free trade for those products which are like commodities – the same the world over – is one thing as is free trade where there are comparative advantages.  But services are always going to be largely local in nature because they concern relations between individuals.

It is ironic therefore that the critics of the effects of globalisation (and the EU as a regional organisation) for its uneven effects on peoples’ lives should try to prop up a regional economic organisation that may have been relevant in 1980 but is becoming more and more out of date today.  The Liberal Democrats and those sections of the Labour Party represented by Keir Starmer need to do a lot more thinking on this subject before they engage with voters and the press in the coming weeks.