Tag Archives: EU referendum

Switzerland and Brexit

All eyes have rightly focussed on the recent Brexit vote and what it will mean in practice, in particular for the UK’s continued membership of the Single Market.  The key to this is most likely to be the free movement of people. Since its inception in the 1950s, the free movement of people has been one of the cornerstones of the Single Market, and its predecessor, the Common Market.

What is important to note is that a country does not have to be a member of the EU to be in the Single Market. You just have to sign up to the four key conditions: the free movement of goods, services, capital and people. You also have to pay a fee. This is the case with both Iceland and Norway, who are full members of the Single Market.

Switzerland is slightly different, in that it is not a full member of the Single Market, but has full access to specific sectors, but not the financial sector for example. Switzerland’s relationship with the EU is covered by a series of Bilateral Agreements and these include the free movement of people. However in February 2014, the Swiss voted in a referendum, by 50.3% to impose quotas on migration from the EU. The referendum gave the Swiss government three years to meet this requirement. That is until February 9th, 2017. For this to happen a new agreement with the EU needs to be reached very soon, for Switzerland to have the time to pass the necessary legal changes in time to meet this February 2017 deadline.

This is why what happens with Switzerland is potentially crucial to the UK’s hopes of remaining in the Single Market without the free movement of people. The omens are not good.  After two and a half years of negotiations no meeting of minds, let alone a new agreement had been reached. The most that might have been agreed with Switzerland would have been something similar to the emergency brake on immigration, that David Cameron managed to negotiate with the EU. However after the Brexit vote that is no longer on offer. And having been rejected by the UK, it is very unlikely that the EU would be interested in offering a similar deal to Switzerland.

Switzerland is already suffering the consequences of the 2014 vote, as it is no longer part of the Erasmus programme, and the EU has stalled on any further bilateral agreements. No new deal is in the pipeline and the reality is that without a new deal, all the Bilateral Agreements will come to a shuddering end in February 2017. This is due to the inclusion of a so called guillotine clause. If any part of the agreements is abrogated, the whole thing ends.

Switzerland is beginning to seriously run out of time. The Brexit vote ended the emergency break option. This leaves Switzerland between a rock and a hard place. Either it tries to hold another referendum, perhaps on keeping the Bilateral Agreements, including the free movement of people, or it prepares for life outwith the Single Market.

The Swiss experience does not offer much hope for those Leavers who assumed that the UK could get its cake and eat it. If there is to be a deal on ending or limiting the free movement of people it will now have to be offered to both Switzerland and the UK. As the previous offer – an emergency brake – has been rejected by the UK, it is not clear that there will be much stomach in the other 27 member states for any further concessions. Any limit to this foundational principle effectively ends the EU. As any offer would have to applicable to the other 27 member states.

The blindness of the Leave campaign as to what was happening in Switzerland is yet another example of how irresponsible the whole campaign was. Unfortunately it is the rest of us who will have to suffer the consequences. Unless you live in Scotland, where independence offers a way out of this mess.

 

 

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Why I will vote to remain in the EU

The EU referendum is almost upon us, and a pretty depressing affair it has been. It has proved difficult to get enthused as the whole referendum is primarily a nasty cock fight among the Tories. However the EU is important and my local Green party branch in Dundee is asking members their views on how they will vote. I submitted the following.

I will be voting to remain in the EU as the EU has been and continues to be the main promoter of peace and prosperity in Europe. From the beginning the key aim of the EU is to bring the countries and the peoples of Europe together, both to increase prosperity and to make war among EU members unthinkable. The way to bring countries and people together continues to be the Common Market, or Single Market as it is now known. This market covers goods, services, money and of course the free movement of people. The common market continues to work well, to the benefit of the overwhelming majority of people in the EU. Current economic woes have nothing to do with the common market. They are rather, due to the misguided, neoliberal austerity policies pursued by the member states. I find it hard to believe that George Osborne and David Cameron are really closet socialists and are only pursuing austerity under orders from Brussels.
The EU is primarily a successful common market. It is beginning to develop common policies in some other areas. The environment for example, which I would hope that all Greens would support. Only trans-national action has any hope of success in protecting the environment and countering climate change.
The EU remains in essence a community of independent countries. As such it is about as democratic a body as could be. Some of its procedures could be more transparent, but the decision making process is democratic. The Commission, so disliked by many, has no powers of decision making. The Commissioners do not get to vote on proposals. Decisions in the EU are taken jointly by the democratically elected European Parliament and the ministers of the democratically elected governments of the member states. I am not sure how this can be made more democratic.
To the extent that we are opposed to some of the current policies and actions within the EU – on refugees for example, this is not due to some inherent defect of the EU. Rather it is the result of the majority of voters across the EU democratically electing some very right wing and nasty governments. As the UK did just over a year ago. The fault for this, if we are to blame anyone, is the combined forces of the progressive left. We have failed conspicuously to convince our fellow citizens, whether in the UK or in the other 27 member states, to elect progressive parties. Blaming the EU for our failures is a distraction from the urgent need to campaign across the EU for progressive policies.

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Brexit – what next?

So far in the debate, or shouting match should that be, over the EU, there has been little or no examination about what might happen if there were to be an out vote.  Lots of claims and counter-claims, but not much light. There is no doubt that the UK would survive and could indeed prosper outwith the EU. The real question rather is what kind of country and economy would the UK have to become?

Various academic studies have looked at the options that might be available to the UK after a Brexit vote. Some overlap a bit, so I reckon that there are in reality only four options for life after a no vote. I have excluded the Swiss model, which involves a series of bilateral agreements with the EU. This model has proved somewhat unsatisfactory for both parties and the EU has made it clear that it would not repeat this kind of arrangement. The four remaining options are therefore as follows:

  1. The Norwegian model – joining the EEA (European Economic Area). This involves full membership of the Single Market with all that implies, including the free movement of people. The UK would have no say in the rules governing the Single Market and would still have to contribute to the EU budget. On the other hand the UK would no longer be part of the common agricultural or fisheries policies.
  2. The Turkish model – joining the EU’s custom union. This gives continued access to the Single Market, but only for goods, not for services. The UK would also be subject to all the EU rules governing that part of the Single Market.
  3. The WTO model – effectively no special arrangement with the EU. Trade would be bound by WTO(World Trade Organisation) rules on tariffs. Again would only cover goods and not services.
  4. A special UK agreement with the EU. This is the option that most Brexit supporters want, at least on the right. The UK would get continued access to the Single Market on its own terms and would be able to opt out of the bits it didn’t like – free movement of labour etc.

As regards the Norwegian model, this would seem to be the most easily achieved, yet the worst outcome for the UK, especially those who want out of the EU. Getting out of the common agricultural and fisheries policies would be a very high price to pay for giving up all influence and votes in the key decision making bodies. This model would also mean that the UK would remain subject to all the rules that the Eurosceptics most dislike about the EU.

The fourth option, a special UK deal with the EU is difficult to envisage. It relies on the rest of the EU regarding the UK as so important that they would do almost anything to keep the UK in. Not sure if there is any evidence this is how the rest of the EU sees the UK. Sure, they would like us to stay, but not at any price. This option effectively abolishes the Single Market and would seem more of a pipe dream that a realistic possibility.

This leaves the second and third options as the ones most realistically available. There is probably not a great deal of difference between the two models. Both models would however require quite significant changes within the UK. As a paper from OpenEurope puts it: “Britain will only prosper outside the EU if it is prepared to use its new found freedom to undertake active steps towards trade liberalisation and deregulation.”  It is not difficult to see why the right wing in Britain is so keen on leaving the EU!

In practical terms this trade liberalisation and deregulation would mean some rather unwelcome developments. Much of what remains of health and safety regulations and protections for workers would be open to further attack from our nasty Tory government. In addition, UK firms and workers would find themselves exposed to whole new levels of competition from low-cost countries. Finally, OpenEurope conclude that in order to be competitive outside the EU, Britain would need to keep a liberal policy for labour migration. As the paper notes with some understatement, these developments would be politically very sensitive.

So far most of the campaigning for an out vote has been by those on the right. It is relatively easy to see why. They by and large favour a deregulated economy with as much trade liberalisation as possible. This is not a view shared by all on the right of course. UKIP’s opposition seems to be more a combination of political – sovereignty, and opposition to immigration. As the above shows, it may not be possible to achieve all that those opposed to the EU want.

On the other hand there is a growing number of people on the left who also support leaving the EU. I do find this a bit perplexing. Leaving the EU and in particular leaving the Single Market is not going to do anything for the (already) precarious rights of workers. Claims that the EU is an undemocratic, neoliberal club are also a bit far fetched in my view. Furthermore it is not at all clear how the UK leaving is going to make any positive difference to this state of affairs. As I pointed out in my previous post, to the extent that the EU is neoliberal and pro-austerity, that is because the voters in almost all EU states have voted for neoliberal and pro-austerity parties. Just how the UK leaving is going to persuade voters in Germany, Finland, Slovakia etc to become more left wing is a bit of a mystery to me.

In short it seems to me that none of the likely post Brexit options offer the UK much, at  least from a left, progressive perspective. I can understand why some on the right would welcome leaving the EU. And for this reason we need to examine much more closely the implications of a No vote and what that might mean for the economy and society.

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