Download Storm clouds gather

In favour of Brexit: Daniel Hannan on
why he should be sacked as an MEP
Unsure of which way to jump in the EU referendum?
One of Britain's leading Tory Eurosceptics argues the
case for voting Leave
Still undecided on whether to remain in the EU after that video? OK, here are the
seven key issues to bear in mind:
Great Britain.
We are the fifth-largest economy in the world, with the fourth largest military budget.
We are leading members of Nato, the Council of Europe, the Commonwealth and the
G7 and G20. We are one of five permanent seat-holders at the UN Security Council.
How much bigger do we have to be before we can live under our own laws?
Daniel Hannan is a Member of European Parliament, representing South East
England for the Conservative Party
The EU is out of date.
"In 1980, the 28 EU states accounted for 30 per cent of the world’s economy..."
In the digital age, we are no longer defined by our geography. We have links to other
English-speaking and common law nations around the world – nations that, unlike the
EU, are growing economically. In 1980, the 28 EU states accounted for 30 per cent of
the world’s economy; today, it’s 17 per cent and falling.
Keeping Britain secure.
Outside the EU, we can control our immigration policy. More passports are checked
at Britain’s borders than at those of the other 27 EU states put together. The former
Secretary General of Interpol, Ronald Noble, describes the Schengen Zone as ‘an
international passport-free zone for terrorists to execute attacks on the Continent and
make their escape’.
Recovering our democracy.
If the EU were just about international co-operation and trade, no one would have a
problem with it. The trouble is that it regulates things that have no conceivable crossborder dimension: the power of our electrical appliances, the frequency of our bin
collections, the way we open a bank account, the tax on sanitary products. Our laws
should have precedence on our own territory, and we should be able to hire and fire
the people who pass them.
The EU can’t be reformed.
"Imagine how we’d be treated if we voted to remain..."
At least, not from within. The utter refusal to grant David Cameron better terms puts
that beyond doubt. If this is how Britain, the second-largest financial contributor, is
treated now, before the referendum, imagine how we’d be treated if we voted to
remain.
The safer choice.
Voting to stay in means remaining on a conveyor-belt whose far end we can’t see. The
Schengen and euro crises are deteriorating – which is one reason that the government
was in a rush to hold the referendum at the earliest possible date. Staying in means
more risk and more cost. It’s safer to take back control.
Our money, our priorities.
Our annual tribute to Brussels now stands at £18 billion a year gross. If we kept that
money at home, we could give the entire country a two thirds cut in council tax. Or
we could build and equip a state-of-the-art hospital every week. To put it another way,
during the last Parliament, we saved £36 billion through the entire domestic cuts
programme; yet, over the same period, we gave Brussels £85 billion. The EU, in other
words, wiped out our austerity savings twice over.
Storm clouds gather
The EU must now decide what it stands for
LATE last night, as the polls closed in Britain, an
apocalyptic thunderstorm erupted in Brussels. It was
followed this morning by a metaphorical one, as news that
Britain’s voters had chosen to leave the European Union
filtered through. Brexit follows a cascade of recent
crises—Russian aggression, economic woes, terrorism,
refugees—that have brought the EU to its knees. It differs
from them only in being entirely self-inflicted. That does
not make the questions it raises for Europe any less
profound.
This morning the leaders of four EU institutions issued a
statement urging Britain to begin the process of departure
“as soon as possible”. A flurry of meetings between
various leaders now follows before a full summit of EU
heads of government in Brussels next Tuesday and
Wednesday, at which David Cameron, Britain’s prime
minister, will formally deliver the news to his 27
counterparts. Mr Cameron will then return to face
parliament at home, leaving the remaining leaders to
stake out a negotiating position in the coming Brexit talks.
This will be a taste of what is to come for Mr Cameron’s
successor, for under the EU’s rules any member country
that withdraws from the club is excluded from political
discussions on the terms of its
Britain’s vote presents Europe’s leaders with three tasks.
First, to manage the political fallout at home; right-wing
populists in France and the Netherlands have wasted no
time in calling for their own referendums. Second, to begin
the divorce negotiations with Britain. Some hard
bargaining lies ahead, not least because Europe’s leaders
are keen to demonstrate to other potential waverers that
exiting the club carries a heavy price. Brexiteers who
expect access to the EU’s single market minus the
obligation to accept EU migrants thus face a rude
awakening. Wolfgang Schäuble, Germany’s finance
minister, said before the referendum that a vote for Brexit
would be a vote against the single market. François
Hollande, France’s flailing president, will need to
demonstrate a tough line on Britain ahead of his reelection bid next year.
But their third job is the hardest: to conjure a vision for the
EU equal to the magnitude of the challenges it faces.
Even before Britain’s vote there was a distinct smell of
“Whither Europe” in the air. Donald Tusk, the president of
the European Council, had urged the EU to “depart from
Utopian dreams”. Mr Schäuble, a venerable champion of
European integration, said there could be no return to
“business as usual”. Position papers are already flying
around Europe’s capitals.
Everyone can agree that Brexit must be met with reform.
But that word masks varying, even contradictory, ideas. To
one group, epitomised by the likes of Marine Le Pen and
Geert Wilders, it means blowing the EU up and replacing it
with a “patriotic spring” of national sovereignty. For others,
perhaps the dominant group, it means slowing down the
train of Euro-integration, returning powers to national
governments and focusing the EU on a limited number of
practical projects. A third group, well represented in
Brussels, will demand large new steps of integration in
areas like the euro zone and the management of migration
into Europe. The prime minister of Belgium, one of the
EU’s last bastions of federalism, has called for a
“conclave” of EU leaders to discuss such proposals,
including a change to the EU’s treaties.
But the EU will quickly realise that the absence of Britain
resolves few of its internal ruptures. In the run-up to the
referendum Germany swiftly rebuffed overtures from
France to advance euro-zone integration, including
proposals like a finance minister and a pooling of common
debt. Arguments over managing migration become no
easier after Brexit because Britain had little to do with
them in the first place. And governments are increasingly
weary of the European Parliament’s instincts to federalise
anything that moves.
In the longer term the EU will have to contend with the
imbalances created by Britain’s absence. The balance
between the euro zone’s “ins” and “outs”, central to the
now-defunct renegotiation of Britain’s EU membership
secured by David Cameron earlier this year, will shift
dramatically. The EU will lose one of its strongest liberal
voices on trade, competition and the single market; a
proposed trade and investment deal with the United
States may be one casualty of Brexit. And although
Britain’s departure removes a brake on European defence
co-operation, it also leaves France as the only EU
member with any military clout. The leaders were due to
discuss a new global foreign policy and security
strategy for the EU, its first in 13 years, at next week’s
summit. That will now be shelved for months, at least.
Is there any room for optimism amid this mess? “What
doesn’t kill you makes you stronger,” said Mr Tusk this
morning. It is a well-worn cliché of European integration
that it only advances in times of crisis. The challenge now
is to ensure that Brexit does not test that proposition to
breaking point.
Britain just did the world a huge favor
A year from now, the British economy will be weaker, inflation and unemployment
will be higher, house prices will probably be lower and some prominent firms will
have left London for other European capitals.
These are a few of the likely consequences of “Brexit,” the United Kingdom’s historic
vote to leave the European Union. While the vote, largely a surprise, was a
resounding repudiation of the governing elite, it could also prove the folly of
nations—including, possibly, the United States—withdrawing from globalization and
going it alone.
Free trade is obviously under assault in many developed nations, as voters rage
against crony capitalism and trade deals that seem to benefit the haves while leaving
the have-nots behind. There’s validity to those concerns, since income inequality has,
in fact, gotten worse, and there are workers who end up unemployed and forgotten
when free trade lets companies move production to low-cost countries.
Many business leaders and economists argue that the alternative to globalization—
more protectionism, trade wars, and closed economies—would be a lot worse than
what we have now. But those are gauzy, intangible arguments that can never be
proven. And it can be difficult to defend free trade because the benefits—lower prices
on many goods, ready markets for exports, freer capital flows —typically accrue in
incremental ways that are invisible to consumers.
The downsides of globalization are often more tangible than the upsides. When a
company closes a domestic factory and ships the jobs overseas, for instance, the pain
is tangible and the losers have faces and families. We see how globalization harms a
few much more vividly than we see how it aids many.
Britain will now serve as a real-life experiment in what happens when a prominent,
developed nation turns inward and shuns globalization. And every other country can
now look on and gauge whether it wants to go next.
It’s possible the UK will end up better off down the road, as Brexit supporters claim,
since the country will no longer be bound by arcane EU rules dreamed up by
unelected bureaucrats in Brussels. But that will come, if at all, only after several years
that seem likely to be painful for Brits and especially for the working-class voters who
were the most ardent supporters of Brexit.
Forecasting firm IHS Global Insight predicts that the UK’s economic growth rates
will fall sharply for the next several years, hitting just 0.2% in 2017. That’s nearly a
recession. The British pound, which has been plunging in value, will probably fall
further, making British exports cheaper in other countries, but making imports to
Britain more expensive. That will cause inflation. A confidence crisis and restrained
spending, meanwhile, will push unemployment up and home prices down. That’s on
top of a stock market that’s likely to struggle more in the UK than in other parts of
Europe.
The Brits hurt most by the coming pullback will be those with the least margin for
error, as is always the case. And those are the blue collar voters in “middle England,”
where support for Brexit was strongest. Recessionary forces rarely harm the sort of
elites Brexit supporters are supposedly enraged at. They harm people trying to live on
fixed incomes or struggling to pay the bills.
There’s valid concern about separatists in France, Spain and other European nations
gaining momentum in the aftermath of Brexit, forcing votes in those countries that
could have the same outcome. This is why some analysts worry that the whole
European Union is in jeopardy.
But will French and Spanish voters really look at the suddenly handicapped UK
economy and say, hey, we’d like to try that, too? Some might, but swing voters
unsure how to vote would probably see the wealth destruction taking place in the UK
and say, nah.
The same goes for American supporters of Republican presidential candidate Donald
Trump, whose plan to kill trade deals and slap high tariffs on Chinese and Mexican
imports is arguably more extreme that Brexit. The thinking here is that Americans
who see Brits bucking the establishment will suddenly feel emboldened to do it
themselves, which will become manifest in a presidential win for Trump in
November. But it’s just as plausible, and maybe more likely, that Americans will look
at the damage Brits did to their own economy and say, “Why would we want to do
that here?”
Brexit, in fact, may be turn out to be the best thing that ever happened to free trade. It
will be the first case study in modern history of what happens when a whole country
bails out of the global establishment. And while it might feel good for a moment or
two, it’s hard to imagine the Brexit cheers will persist as prosperity seeps out of the
UK.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial
and Political Freedom. Follow him on Twitter: @rickjnewman.