If on a summer’s night: is UK businesses’ “new deal” the only key to the “best of all worlds”?

Boris Johnson, Mayor of London, on the left, and Johannes Hahn, presenting the brochure entitled "The Crystal: a sustainable cities initiative by Siemens", EC Audiovisual Services,  28/02/2014

Boris Johnson, Mayor of London, on the left, and Johannes Hahn, presenting the brochure entitled “The Crystal: a sustainable cities initiative by Siemens”, EC Audiovisual Services, 28/02/2014

If you are a loyal reader of the European Sting, or at least a well-informed European citizen, you will certainly know that surveys don’t really bring good news for the Union. Anytime a new survey about the public opinion around the bloc comes out, the European Parliament is shaking a bit. “People are not really interested…”, “EU politicians not popular…” are just a few of the (quite disturbing) outcomes we use in the last few years, but there’s still space in a more “business oriented” side.

The UK is the EU’s restless child this time. A recent survey by the British Chambers of Commerce (BCC) revealed that more than half of British companies want to re-negotiate their relationship with the European Union. Around 60 percent of more than 3,200 businesses surveyed in the BCC’s latest EU Business Barometer believe that transferring specific powers back to Westminster would be positive for the UK economy.

True is that the majority of firms – 59 percent – are against a UK exit from the EU, but on the other hand we have almost half of firms surveyed (46 percent) believing that further integration with the EU would hinder the UK’s economic prospects.

John Longworth, BCC Director General, commented: “These results show that firms believe a renegotiated relationship with the EU, rather than further integration or outright withdrawal, is most likely to deliver economic benefit for the UK”. He also added with no hesitation that “[UK firms] do not want to get caught up in the whirlpool of further integration”, and that only 20% of them think that this would be somehow beneficial.

Well, we see that Mr. Longworth’s opinion is clear and exactly aligned with the poll’s outcome: the best thing for the UK would be remaining in the EU but after a careful re-negotiation of the relationship. This was also reported by many newspapers. “It is our preference to stay in the free trade area and renegotiate our relationship because that would give us the best of all worlds,” said Mr. Longworth. Clear enough.

The BCC’s Director General has made no mystery of his opinion since long time ago (famous was his letter published on the Guardian, in which he already declared that re-negotiating the UK’s position in the union is in the “national interest” – cit.), although numbers – and surverys! – seem now to be strong allies. It is also the general political situation to lay a hand towards those who think that the UK deserves “the best of all worlds”.

Many analysts believe that a lot of turmoil is already perceived due to the 2017 proposed referendum of UK membership of the European Union. Indeed after Prime Minister David Cameron promised an “in/out” referendum on British membership of the European Union in 2017, if the Conservative Party wins an outright majority at the next General Election in 2015, nothing has ever been the same. So everyone should consider this while analyzing the current situation in the UK.

A recent report commissioned by Boris Johnson, the Mayor of London, and reported by the Telegraph, predicted that – following a UK exit – London’s gross domestic product (GDP) would grow from £350bn today to £640bn by 2034 if Britain’s stayed in a reformed EU, compared with £615 bn over the next 20 years if it exited but adopted outward-looking trade policies. However, it warned that maintaining the status quo would see London’s GDP expand to just £495 bn by 2034.So everything seems to endorse the outcome of the latest poll by BCC.

Now I would like to challenge Mr. Longworth and our readers by introducing a sort of opportunity cost though. What if this analysis was considering only Mayor Johnson’s report, and not an extra one? That is UK staying not only in the EU but also being part of the Eurozone. Yes, I know this is some kind of pie in the sky, but please allow me this comment: are we sure that those results consider also the opportunity cost of not staying in a Eurozone that would be probably much more powerful with the UK? Why does the solution need to be always to run away when instead we can sit around the same table, balance our cultural differences, and come to mutually beneficial agreements? Why do British politicians need to act based upon past and anachronistic partisanship feelings of the electorate instead of taking the next step to educate them with political ‘evolution’? 

Mr. Longworth knows perfectly that a further Eurozone integration, with more members and more markets, would leave the UK in an increasingly isolated position if UK does not jump in the train. Indeed he recently declared that “the Eurozone is increasingly becoming the decision-making centre of Europe”. He also added that “if in five or 10 years’ time the Eurozone makes all the big decisions, and the UK is not in the Eurozone but is in the EU, we will have all of the rules and none of the influence”; thus my point is, what if the plan was to have an additional choice in the politics of the island, with a more involved UK, instead of a sort of escape plan? For sure an isolated position of the UK would harm the national interests, but why not considering another way?

After all if it’s true that theories in economics are more than often based on assumptions rather than on facts, it would also be true that unconventional ideas are sometimes less dangerous than not challenging ourselves at all. And I am sure that unconventional ideas have occurred to UK politicians’ minds. What I am not sure though, is whether these leaders are able to behave like ones and challenge the conservative electorate to think otherwise, in a modern, more cooperative manner; for the good of the UK, for the good of Europe.

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