Twelve myths
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EU 2016
Twelve myths about the EU Outside the EU, Britain would be isolated and lose its influence. Most of the world is outside the EU, including six of the world’s 10 biggest economies. Britain, the fifth biggest, would make that seven. The BRICS economies (Brazil, Russia, India, China, South Africa) account for 31% of world output and more than half of global economic growth. The EU share of global GDP has fallen continuously from 28% in 1990 to 17% in 2015. [1] Less than half (48%) of Britain’s external trade is with the EU — even less (46%) if non-EU trade routed through Rotterdam is excluded. [2] Britain would retain its membership of the UN Security Council, the OECD, the Council of Europe, the Organisation for Security and Cooperation in Europe (OSCE) and many other international bodies, and regain its own independent seat at the World Trade Organisation. Britain would be free to negotiate its own foreign, trade and defence policies in partmership with other countries across the world.
The EU is a vital source of employment, including three million jobs that depend on exports to Europe as our largest market. All the EU structural funds spent in Britain (£4.6bn forecast for 2016) are dwarved by our annual net contribution to the EU budget (£15.2bn in 2016). [3] In other words, Britain outside the EU could spend four times more on these agricultural, social and regional programmes by redeploying this net contribution. Just under half the stock (48%) of foreign direct investment in Britain is from the EU, unchanged for a decade or more. But while the flow of new investment from the EU has shrunk to 19% (latest 2014), the inflow remains constant from US companies (around 55%) and continues to grow from the Far East (22%). [4] The share of Britain’s exports going to EU states has dropped steadily from over half (55%) in 2007 to less than half (44%) in 2015. [5] More jobs in Britain now depend on exports to the rest of the world. Britain’s trade deficit with the EU has trebled, while that with the rest of the world has been cut by twothirds. Twelve myths about the EU | 1
Britain’s non-EU exports are growing by 5% a year — while exports to the EU decline. By far the biggest growth markets are China, Switzerland and the Middle East. We don’t need to become part of the USA or China to have trading and other relations with them — why should the EU be different? EU treaties and laws prohibit member state governments from taking measures to save or create jobs which ‘distort’ competition and the free movement of capital, labour and commodities. This includes subsidies, import or capital controls, public procurement contracts favouring local workers or firms etc. Such restrictions have helped destroy millions of jobs in Britain in steel, coal, manufacturing and agriculture since joining the European Economic Community in 1973. Outside the EU, Britain could negotiate mutually beneficial agreements with other countries instead of secretive EU pacts that benefit big business, such as the Transatlantic Trade and Investment Pact (TTIP) with the USA.
Even outside the EU, we would still have to abide by EU rules in order to trade with it. Most countries around the world require imported goods and services to comply with their own domestic standards and specifications. At the same time, European countries which trade with the EU such as Norway and Iceland still prefer to remain outside it and pursue their own economic, financial, social and foreign policies. The EU runs a trade surplus with Britain on which four million export jobs on the European continent depend. It would be in the EU’s own interests to conclude a non-tariff trade agreement with Britain. Any EU tariffs would be limited under WTO rules and a British government could compensate exporters from its own tariff revenues. As a major economic and political power and trading partner, Britain would be in a far stronger position than most other countries to reach a wide range of trade and other agreements with the EU.
EU membership has brought many rights and benefits to ordinary people, especially at work. Our main democratic, employment, trade union and welfare rights in Britain have been won by the sacrifice and struggles of the people — not gifted to us by our rulers in Britain or the EU. Most of our employment, trade union, health and safety, equal pay, minimum 2 | Twelve myths about the EU
wage and anti-discrimination rights have been enacted by British legislation. This includes the 1998 Working Time Regulations, which improved upon the EU Working Time Directive (28 days paid leave instead of 20 — although statutory bank holidays were not excluded); better rights for farm workers; longer daily rest for young workers). Neither EU nor British legislation has prevented the average full-time worker in Britain having the third longest working week in the EU, behind only Greece and Austria. Workers in 21 other EU states have more statutory days off with pay (total leave and public holidays) than in Britain. The EU has never sought to enact or enforce a statutory minimum wage, the right to strike or the right to join a trade union; nor does it protect workers against lock-outs. Article 153 of the Treaty on the Functioning of the EU (TFEU) explicitly forbids EU action in these areas. The EU has done nothing to protect workers in Britain from a stream of Tory anti-trade union laws since 1979, while EU Court of Justice (ECJ) rulings have outlawed trade union action to enforce or achieve fairer treatment of imported (‘posted’) workers by foreign employers (the Viking and Laval cases) and government action to enforce regional procurement or national employment law in similar circumstances (the Ruffert and Luxembourg cases). EU Commission and European Central Bank austerity programmes have imposed mass unemployment, higher taxes, wholesale privatisation and huge cuts in pensions and benefits on the peoples of Greece, Cyprus, Portugal, Spain, Italy and Ireland — in return for ‘bailout’ funds to pay German, British and French banks and other holders of government bonds .
The EU means freedom to travel, work and reside throughout Europe. The ‘free movement of people’ principle in the Treaty of Rome (1957) has always been a cloak for the ‘free movement of labour’, so that workers can move more easily to where business can make a bigger profit from them. This goes alongside the free movement of capital and commodities, which also enables big business to maximise profits in the ‘Single European Market’ created after 1992. The result has been mass migrations of capital, jobs and labour across Europe at the expense of national and regional economies, local communities and union negotiated terms and conditions of employment. Cheaper, more flexible and super-exploited imported labour has been used as a form of ‘incomes policy’, holding down wages as profits and dividends go up. Twelve myths about the EU | 3
Freedom to travel, work and live elsewhere need not depend on membership of a political and economic union. Visa and residency arrangements exist between Britain and most countries across the world, while the EU has reached similar agreements with Norway, Switzerland and other non-EU states in Europe.
Many problems today are international, and so require a coordinated EU approach. Problems of global warming, pollution, malnutrition, disease, economic and financial crisis, organised crime, corruption, war, mass migration etc. are often wider than the EU. Britain already plays its part in numerous international agencies (the UN, WHO, Unesco, ILO etc.), based on individual member states, to combat them. The EU represents the interests of Europe’s big business corporations, using its collective strength to undermine many international agencies to the cost of weaker countries and their peoples (e.g. carbon emission trading schemes which transfer pollution to the Third World and create a new financial market; trade and debt restructuring agreements which require market access and privatisation). As the world’s fifth biggest economic power with economic, political and cultural relations across the world, Britain has its own resources, expertise and perpsectives to contribute to solving international problems.
The EU has brought peace in Europe for 50 years or more. The EU originated in a ‘Cold War’ bloc to rebuild monopoly capitalism in western Europe and confront the Soviet Union and the new socialist states of eastern Europe. After NATO was formed in 1949, plans for a ‘European Defence Community’ alongside the European Coal and Steel Community were thrown out by French Communist and Gaullist MPs. West Germany was then rearmed and admitted into NATO, leading to the formation of the Warsaw Pact in 1955. Peace was kept in Europe by anti-war feeling in the West and the Soviet policy of ‘peaceful co-existence’, despite the US-led arms race. The German-Soviet process of detente led to the formation of the OSCE in 1975, which played a leading role in easing tensions, although the EU strives to marginalise the OSCE and its work for peace-keeping, arms control, democracy and human rights. 4 | Twelve myths about the EU
Since the end of the Soviet Union and the Warsaw Pact, the EU has expanded eastwards alongside NATO, developing its own capacity for rearmament and military intervention in league with NATO, under the Lisbon Treaty. EU states have helped destabilise Yugoslavia, Ukraine, Afghanistan, Iraq, Libya, Syria and parts of Africa.
If Britain votes to leave the EU, it would be a victory for the political right. The mainstream political right supports EU membership, reflecting the interests of big business, while wanting to protect the City’s banks and financial markets from any EU regulation and discrimination (the chief objective of Cameron’s renegotiations) A vote for withdrawal would bring down the Tory government and create the conditions for electing a Labour government on a left programme of progressive taxation, economic planning, public investment, public ownership, industrial regenration and ecological security. Free from EU barriers and restrictions, Britain could more easily promote policies at home and abroad which put people and the planet first, not corporate profit.
Scotland and Wales benefit from EU funds and British withdrawal would lead to the break-up of Britain. Wales receives around €23m (£18m) a year — €117m (£92m)according to Plaid Cymru — more from EU funds than it puts in. [6] But this is less than one-fifth of 1% of Britain’s net contribution to the EU Budget (£15.2bn in 2016) and of the National Assembly’s annual block grant from central government (£15.5bn in 2016). In July 2015, it was revealed that the SNP government has been compelled to drastically amend its Scottish Futures Trust project for public investment in schools, hospitals and roads to give the private sector a bigger, more profitable role. [7] Scotland and Wales have suffered heavily from the export of capital and jobs to southern and eastern Europe, where labour is skilled but cheaper and energy and transport costs are lower. As independent member states of the EU, Scotland and Wales would be among the smallest, while their main economic relations would continue to be Twelve myths about the EU | 5
with England. The Scottish Government in Edinburgh accepts that Scotland would continue to be a net contributor to the EU Budget as a separate member state.[8]
The EU can be reformed to serve the interests of the people. Creating a ‘Social Europe’ was the sugar coating on the ‘Single European Market’ pill. But since 1992, EU social programmes have been cut or directed towards eastern Europe. Employment rights no longer expand as the EU drives up the state pension age across Europe. Three of the four major EU institutions (the Commission, ECB and ECJ) have their extensive powers guaranteed by EU treaties which can only be changed by unanimous agreement within the fourth, namely, the Council of Ministers. Those fundamental treaties severely limit the ability of EU member state governments to fund public investment, rescue failing companies and industries, save jobs or use public ownership for wider economic, social and environmental purposes.
Democracy and human rights will be threatened if Britain leaves the EU. Democratic rights in Britain are enshrined in our domestic law, together with commitments arising from international law, its conventions and courts. Those rights did not originate in the EU. Tory hostility has been aimed at the European Convention on Human Rights (ECHR, enshrined in Britain’s Human Rights Act) and its European Court — both of which arise from our membership of the Council of Europe, set up in 1950 and wholly separate from the EU. While EU membership obliges all member states to adopt the ECHR, this does not prevent governments from flouting both the convention and the UN Declaration of Human Rights. In December 2014, the ECJ blocked a draft treaty affiliating the EU to the convention and its court, not wishing to expose EU institutions and treaties to a different authority — the ECHR’s European Court — in matters of human and democratic rights. [9] We need to defend and extend democratic and human rights, including through the ECHR and OSCE, whether inside or outside the anti-democratic EU.
6 | Twelve myths about the EU
There is no realistic alternative to EU membership. Most of the world’s countries, big and small, manage without being in the EU. Britain has bilateral agreements with almost all of them, including through our participation in more than 70 international organisations in political, economic, scientific, emvironmental, labour, health and educational matters. Many countries trade and cooperate with the EU, without being EU members or accepting the imposition of the pro-big business economic and financial policies demanded by EU treaties and institutions. Joining the European Free Trade Area and through it the European Economic Area would enable Britain to remain in the ‘Single European Market’, but at the price of obeying many EU rules and diktats. Economic, political and other relations could be strengthened by new arrangements with BRICS and the 53 Commonwealth countries, collectively and individually.
Five harsh realities about the EU It’s a big business club. The EU and its forerunners (the European Coal and Steel Community and the European Economic Community) were designed to rebuild the big capitalist corporations in Western Europe after World War Two, within a single market without barriers to trade and takeovers, behind a tariff wall against imports. The Treaty on the Functioning of the European Union (TFEU) maintains the commitment to an internal market in which there is the ‘free movement of goods, persons, services and capital’ (Article 26) — the cornerstone of the original Treaty of Rome (1957) establishing the EEC. The aim is to enable business corporations to move capital and labour around Europe in their efforts to maximise profit. The TFEU also declares that ‘all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited’ (Article 63). The EU leads the drive in the WTO and through trade and investment agreements to open up countries, their markets, natural resources and public sectors to penetration by European monopoly capital. Twelve myths about the EU | 7
EU directives have promoted the fragmentation, ‘marketisation’ and ‘liberalisation’ of nationalised utilities and public services, preparing the ground for privatisation of electricity, the railways and postal services. EU-funded bailouts have demanded sweeping privatisations as a condition of ‘bail out’ loans to member states in debt to German, French and British banks. Corporate interests lobby the EU Commission and EU Parliament on an enormous scale. Big business corporations use their close links with EU Commissioners to shape EU policy on a wide range of issues, not least through the European Round Table of Industrialists and the European Financial Services Round Table.
It’s anti-working class All the EU talk about a ‘Social Europe’ to win over trade unions and agnostic social democratic parties, smoothing the way to the 1992 ‘Single European Market’, has evaporated. The Working Time Directive is full of loopholes (e.g. employees can opt out under employer pressure) and, like the Parental Leave Directive, falls shorth of provisions won by struggle and progressive governments in some EU member states. EU directives have not closed the gender pay gap, limited the average working week to 48 hours or raised paid holidays in Britain to the average European level — only trade union action and national legislation can be relied upon to do that. The protection for imported migrant labour in the EU Posting of Workers Directive has been undermined by a series of EU Court of Justice rulings (the Viking, Laval, Ruffert and Luxembourg cases). These outlaw action by trades unions, regional and central governments to secure compliance with collective agreements, local government regulations and even national legislation by transnational corporations for their imported workers. EU austerity policies have resulted in mass unemployment and deepening poverty for millions of workers and their families.
It’s anti-democratic and unreformable. Besides the Council of Ministers, the most powerful bodies in the EU are the European Commission, the European Central Bank (ECB) and the European Court of Justice. The Commission’s appointed members draft and police EU legislation, including powers to sanction democratically elected member state governments. It shares some of these roles in financial affairs with the ECB, which also controls central banks and interest rates throughout the eurozone and must remain free from any supervision or accountability under Article 130 of the TFEU. 8 | Twelve myths about the EU
The European Parliament is directly elected, but on a scale so large (one MEP for every 500,000 electors) as to make it meaningless. Fewer than half the electorate bothers to vote (43% in 2014 and only 34% in Britain). Unlike other parliaments, the EUP cannot initiate legislation, all of which comes from the Council of Ministers, although it is drafted and mostly initiated by the Commission. Amendments must then be agreed by the Council (usually on the Commission’s recommendation). Nor can the EUP sack Commissioners except all at once (the unusable ‘nuclear’ option). Only the Commission president, elected by the EU Parliament, can sack individual Commissioners. The anti-democratic institutional arrangements and basic free market, proausterity policies of the EU are set in concrete in EU treaties. These can only be amended by unanimous agreement of all member states (28 at present). Should Britain elect a left or progressive government, the treaties will act as a strait-jacket on its policies, which could only be removed if every other EU government agrees to treaty change. The fundamentally anti-democratic character of the EU has been demonstrated by its refusal to accept the result of national referendums that have gone against proposed new treaties: those in Denmark (1992 Maastricht) and Ireland (2001 Nice and 2008 Lisbon) were run again in order to secure a pro-EU result. After France and Netherlands (2005) voted against a European Constitution, referendums in Britain and other member states were abandoned; the proposals were transferred into the Lisbon Treaty and after Ireland voted against (2008), in the only referendum to be held, another referendum was held to reverse the result. When elected national governments in Italy and Greece defied EU demands for even more austerity and privatisation in 2010, they resigned under pressure in favour of unelected caretaker regimes led by EU-approved ‘technocrats’ — a fomer EU Commissioner and ex-Vice President of the ECB, respectively.
It’s reactionary and anti-socialist. EU free market rules prohibit member state governments from planning economic development through regulating the movement of capital, goods, services and labour, across and even within the country’s boundaries. Planned economies are, in effect, outlawed by Article 3 (for a ‘highly competitive market economy’) of the Treaty on European Union and Articles 119, 120 and 127 which repeatedly demand that that all EU member states operate a ‘an open market economy with free competition’. The EU Stability and Growth Pact sets limits on public sector financial deficits (3% of GDP) and accumulated national debt (60% of GDP) and commits member state governments to achieve balanced or surplus budgets. This prohibits government strategies to finance current and/or investment spending Twelve myths about the EU | 9
through ‘excessive’ borrowing. Using the state bank to buy public sector bonds (people’s ‘Quantitative Easing’) is expressly prohibited by Article 123 of the TFEU. Each member state government must submit an annual Convergence Progarmme setting out how it is implementing an austerity programme of deficit reduction in line with the Growth and Stability Pact. [10] State aid or any kind of preferential treatment to protect, rescue or promote specific companies or strategic industries — whether in the private or public sector — is banned as a distrortion of competition under TFEU Article 107. The EU Commission may grant very limited or temporary exceptions. EU Directives have enshrined Value Added Tax as the EU’s ‘tax of choice’ to be imposed in all member states at no less than 15% on most goods and services, or at least 5% on specified essental items if not already zero-rated. Such indirect taxation favours the rich, because everyone pays the same rate whereas taxes on income or wealth can be levied at different rates.
It’s imperialist not internationalist. From its inception, the EU has been constructed to promote the common interests of Western Europe’s capitalist monopolies at home and abroad. This has included trade agreements with existing and former colonies to facilitate the import of cheap goods into the EU, while maintaining tariffs against rivals from North America and the Far East. As the major monopolies inside ‘Fortress Europe’ have grown stronger, so the EU has moved to a policy of breaking down protectionist barriers, so that European companies can exploit markets and raw materials across the world. Today, the EU negotiates trade and investment pacts with other countries and regional associations in order to exploit commercial markets (the US, Canada) and labour and material resources (India, Malaysia, Ukraine, Peru, Colombia) more thoroughly. Plans have been agreed for the EU to take over all trade and investment negotiations with other countries and regions, replacing bilateral ones conducted by individual members states. As the EU develops its military dimension and merges into NATO’s structures and strategies under US domination, so it more openly pursues the common objectives of Western imperialism particularly in relation to Russia and the former Soviet Union, the Middle East, China and Africa. This includes the eastward expansion of the EU in tandem with NATO and greater involvement in military intervention of every kind, including the construction of new facilities and war. 10 | Twelve myths about the EU
Five good reasons to leave the EU 1
The British, Scottish and Welsh governments would be free to ďŹ nance public expenditure and support industries and services in whatever ways they decide; free from the EU Classical Directive on public procurement, local government could award larger contracts to local suppliers.
2 3
The British government would be free to reduce or abolish VAT as it wishes, including as part of strategy to combat poverty and inequality.
A future British government would be free to regulate the movement of capital, goods and services in order to boost domestic investment in productive industry, stimulate economic growth and balanced industrial development, support strategic sectors and enterprises, encourage dierent forms of public and social ownership, and protect all workers against superexploitation.
4
Britain would be free to conduct its own independent foreign, trade and defence policies, instead of being represented by the EU in international trade matters and bound by EU common foreign, defence and security policies.
5
Workers, progressives and socialists could ďŹ ght for policies to be enacted at local, national and all-Britain levels that could not be blocked or outlawed by an EU that is beyond fundamental reform.
Twelve myths about the EU | 11
Notes [1] IMF, World Economic Outlook (October 2015): http://www.imf.org/external/datamapper/index.php [2] ONS Statistical Bulletin, Balance of Payments, Quarter 3, 2015 (23 December 2015), Tables B and C; ONS, UK Trade in goods estimates and the Rotterdam effect (6 February 2015). [3] OBR, Economic and Fiscal Outlook (November 2015) supplementary fiscal table 2.25: http://budgetresponsibility.org.uk/download/economic-and-fiscaloutlook-supplementary-fiscal-tables-november-2015/
[4] ONS, Foreign Direct Investment, 2014 (23 December 2015): http://www.ons.gov.uk/ons/publications/re-referencetables.html?edition=tcm%3A77-392545 [5] HMRC, https://www.uktradeinfo.com/Statistics/Pages/Annual-Tables.aspx [6] https://fullfact.org/europe/wales-getting-best-deal-out-eu/ [7] http://www.theguardian.com/uk-news/2015/jul/27/scottish-governmentrely-private-money-public-projects-childrens-hospital-eu-rules-state-spending [8] Scottish Government, Scotland in the European Union (November 2014). [9] http://www.euractiv.com/section/justice-home-affairs/news/court-of-justicerejects-draft-agreement-of-eu-accession-to-echr/ [10] The annual UK Convergence Programme can be found at: https://www.gov.uk/government/collections/uk-convergence-programme
12 | Twelve myths about the EU
Books from manifestopress manifestopress.org.uk
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Bob Cooney (19071984) was a prominent antifascist and communist in Aberdeen who joined the International Brigades in the Spanish Civil War of 1936-39. Published for the first time, Proud Journey is his memoir of those turbulent times. Published in collaboration with Marx Memorial Library & Workers’ School with support from the International Brigade Memorial Trust and Unite the Union.
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Twelve myths about the EU | 13
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