Britain's Role in Europe Is to Be a Pain

By Clive Crook

22 AUG 17

If I were a Scot, I'd be leaning toward voting for independence in next month's referendum, on the logic that the advantages of self-government outweigh the drawbacks of being a small state. How does that logic apply to Britain's choice about remaining a member of the European Union?

The same kind of calculation applies, but it's more complicated than the Scotland-U.K. question. To begin with, of course, the U.K. is still an independent state. It has surrendered some powers to Europe, but for most purposes, it doesn't have to leave the EU to achieve self-governance.

Trouble is, the EU is intent on testing the meaning of self-government. It's hard to know what the EU will be, say, 10 years from now. It was conceived as a work in progress -- formally committed to the goal of "ever closer union." The EU's constitution is unusual: Rather than describing a settled design, it commits its members to perpetual constitutional innovation.

I count that as a drawback of EU membership, and a growing one. For many years, as the union was building a single economic space, it could move toward closer integration under the terms of this perpetual-flux constitution, confident that the next steps were a good thing and would command wide support. Then this stopped being true.

The union expanded its membership far beyond western Europewithout bothering to ask whether that was all right with its existing citizens. It dismantled internal controls on migration -- a good policy, but not one with popular consent. The single currency was both a bad idea and, in many countries, unpopular, too; again, it happened regardless, all in pursuit of the elite-driven project of ever-larger, ever-closer union.

This process has acquired such momentum that one wonders if it can be stopped. Recent elections to the European Parliament were revealing. Populist anti-EU parties did well, showing that voters were becoming increasingly disenchanted with the whole venture. Yet see how the system responded.

The Parliament was allowed to impose its candidate to lead the European Commission -- the most powerful position in the EU -- on national governments. That was a significant further step toward political integration and away from national sovereignty, going beyond what the treaties specifically provide and against the wishes of the voters that the Parliament supposedly represents. It was a characteristically European development.

The paradox is that while the EU moves under this apparently irresistible momentum to strengthen EU institutions and weaken national ones, it fails to integrate in the ways that a well-run single-currency area actually needs. Greater sharing of fiscal risk, for instance, is a logical requirement of the euro. So is a genuine banking union. Nothing has happened on the first and progress on the second is dangerously slow. It seems almost systematic: Sovereignty is pooled for its own sake in areas where it doesn't need to be, but not where it's actually required.

All this is to say that U.K. Prime Minister David Cameron is right to call for hard thinking about what the EU intends to be, and for treaty revisions to repair and settle its design. The organizing principle for this effort should be: more union where necessary, less where possible.

Cameron's demand makes as much sense for the rest of the EU as it does for the U.K. Sadly, the EU's other governments don't seem to be listening.

Against this background, studies of the economic consequences of a British exit from the EU are partly beside the point. As things now stand, the economic consequences of leaving the union (possible limits on access to the EU market, smaller inflows of foreign investment) seem likely to outweigh any likely economic benefits (freer trade with non-EU countries, less regulation). They're probably big enough to outweigh the political and constitutional benefits as well.

But this calculation is only good for the short term. If the erosion of national sovereignty continues, the balance of economic costs and constitutional benefits seems likely to keep shifting in favor of leaving.

It's worth remembering that the economic benefits of U.K. membership would be much smaller if the U.K. hadn't said no to the single currency. The balance of pros and cons favors membership today partly because the U.K. has already rejected the idea of ever-closer union and has managed to devise a kind of semi-detached status. This is a point that staunch British advocates of EU membership rarely acknowledge: The EU makes sense for the U.K. partly because the country dismayed its partners and said no to the union's boldest innovation in decades.

That was a good outcome for Britain, but it isn't secure. The U.K.'s anomalous status will continue to be challenged. It goes against the grain of the treaties and the momentum of the EU's misdirected integration.

Quitting the EU is certainly a viable option, albeit not cheap. Nonetheless, for the moment, the best course for Britain probably isn't exit but more of the same. Be selfish, as with the euro. Remain a member of the EU for the sake of the economic benefits, but continue to oppose the principle of ever-closer union. Block unnecessary integration by any means necessary and, if it can't be blocked, refuse as far as possible to have those terms applied to the U.K. Enlarge, entrench and, if possible, get constitutional codification of the current semi-detachment.

One day, maybe, this posture will so exasperate the rest of the union that the other governments will ask Britain to leave on terms too generous to resist. In pursuit of that enticing possibility, the U.K. should devote itself to being as much of a pain as possible. It comes easily, and it's worked quite well so far.

To contact the writer of this article: Clive Crook at ccrook5@bloomberg.net.

To contact the editor responsible for this article: Christopher Flavelle at cflavelle@bloomberg.net.