02 February 2015

Janan Ganesh authors this publication in a personal capacity and the views expressed therein do not necessarily reflect those of Open Europe.

A reluctant case for EU Membership

In a guest essay published by Open Europe, Janan Ganesh of The Financial Times makes a reluctant case for Britain’s membership of the EU.

The author argues that Europe is bossy, hidebound and increasingly removed from the world’s real motors of economic growth in Asia and America. Membership is also expensive and brings burdens that make the UK chafe. The euro crisis has crystallised many of the continent’s long-standing problems, intensifying pressure for a referendum on Britain’s EU membership.

However, it does not automatically follow that Britain would be better off outside, says Ganesh. The EU is the world’s largest internal market, and will always have a vital national interest in its rules. There is currently no model for Brexit that would give the UK access to that market and influence over those rules. Indeed, the EU has an incentive to make life for any departing member as hard as possible.

In the absence of a convincing case for exit, Ganesh urges the prime minister to pursue a reformed version of the status quo as the least bad option.

In the memo addressed to David Cameron, Ganesh argues:

Euroscepticism is an authentic response
To remain credible, pro-Europeans must not over-claim. It is hard to stand up an unambiguous case for EU membership. The economic arguments are favourable but not overwhelming, and the costs – in financial contributions, regulation and loss of sovereignty – are mighty. Euroscepticism is not whipped up by the press. It is an authentic response to real problems.

There is no ideal form of exit
None of this adds up to an actual case for exit. The UK does too much business with the European market to pretend its regulations do not matter, and there is no way of influencing those regulations outside the club. There is nothing to envy in the Swiss or Norwegian models of co-existing with the EU. The ideal form of exit, one which preserves the UK’s market access but exempts it from market rules, will never be permitted by the EU, which has made itself inescapable for any European country.

Substantial reform is possible
However, a substantial revision of the UK’s terms of EU membership is achievable. The upheaval of the euro crisis and the indispensability of Britain in German eyes will see to that. The question for the Prime Minister is what type of reform to pursue, and how. British diplomatic capital is finite, and so is time. The only certainty is that the UK will not achieve all of what it wants.

Prioritise three areas: banking regulation, social policy, migration policy
The national interest is best served by reform in three areas: banking regulation and social policy, where something amounting to a veto can be negotiated, and migration, where welfare entitlements for European workers can be curbed. These changes will be hard but not impossible to achieve, and the credible threat of British exit must be used to strengthen our negotiating hand.

Be clear about what cannot and should not change
The UK must also be clear about what it cannot or should not change. Reform of agricultural and regional policy is desirable but less material to its interests than banking or social policy. And while the EU would ideally be more open and democratic, that will not necessarily serve its interests, and may indeed harm them. A consistent British error is to assume that, if only the peoples of Europe had more say, they would desire the same liberal EU that the UK craves.

This is a cry for the kind of realism that has traditionally informed British foreign policy. We are a nation of 60 million in a union of over 500 million. We matter, but not enough to get exactly the kind of EU we want. Neither is there likely to be a knockout case for leaving any time soon. In these circumstances, prudence must prevail: the best reason to stay in the EU is the absence of a superior alternative. This is uninspiring, but common sense usually is.

Janan Ganesh, “From a Reluctant European: a memo to the Prime Minister”

About the author

Janan Ganesh is political columnist for The Financial Times. He was previously political correspondent for The Economist for five years, and a researcher at the Policy Exchange think tank for two. He appears regularly on TV and radio, including a weekly slot on BBC1’s Sunday Politics. He is also the author of a biography of George Osborne, the UK chancellor.

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