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Anti-Europeans often fudge the question of whether they would like Britain to quit the single market as well as the EU. They should be invited to clarify precisely what they mean. Quitting the single market would be extremely bad for the economy, since about half of Britain’s trade is with the EU. This wouldn’t all vanish. But all sorts of barriers would make it much harder for companies to do business across frontiers, leading to a big rise in unemployment.
Britain has the world’s third-largest stock of foreign direct investment after the United States and China. But multinational companies, which have used Britain as a hub in part because it has access to the single market, would curtail their investment if that was no longer so. The City of London, the UK’s most successful industry, would also suffer if it was cut off from its European hinterland.
Not surprisingly, many eurosceptics don’t want to quit the single market. They think they can have unfettered access to this market without the rules and regulations that irritate them. The idea that Britain can have its cake and eat it is naïve. The rest of the EU might well allow it access to the single market – and even then not on an unfettered basis – but only if the UK abided by its rules. What’s more, it wouldn’t then have a vote on those rules, putting its business at a disadvantage. That’s the position Norway, which is not in the EU, finds itself in. It also has to pay almost as much on a per capita basis as Britain for the privilege of such second-class status.
The anti-Europeans are fond of lambasting Brussels bureaucracy. They also point to misguided policies such as the Common Fisheries Policy, which results in dead fish being thrown back into the sea, or the planned Tobin Tax, which will gum up financial markets. These attacks are fair, even if they don’t snuff out the case for staying in. But Britain has a golden opportunity to help reform the EU. This is because the main solution to the eurozone’s crisis is to make it more competitive. It’s a misconception to suppose that the eurozone is charging towards political, fiscal and banking union – as Germany is just not willing to pay for it.
Instead, the single market needs to be properly extended to services. Free trade needs to be promoted with other blocs such as America. And capital markets should be boosted as a solution to Europe’s banking malaise. Cameron needs to start pushing this agenda now. Achieving it would not just be good for Britain. It would increase the chance of persuading the electorate to vote yes in any referendum.
See also viEUws Debate with Graham Watson MEP (ALDE Group Leader) and Martin Callanan MEP(ECR Group Leader): Britain and the EU – Is the UK leading the way or running away?, 9.5.13 © 2013 viEUws – the EU Policy Broadcaster