With the UK’s impending exit from the European Union, there is more focus than ever on the state in which the current 28-member organisation exists and what really are the benefits and drawback of being involved has, especially with other countries considering their future status. By Nick Staunton
The EU’s main roots of conception have always been based around the idea of providing more accessible free trade and a customs agreement focusing on improving the economic conditions. However over time this ideal has changed into a reductionist system where a single state mentality exists, with a governing bureaucracy that no longer serves the intended purpose, instead simply causing mass overregulation that devalues each nation’s own sovereignty and economic flexibility whilst taking away much of its perceived individual control. An economy cannot develop under these kinds of stringent conditions.
The EU itself has always been considered to be resistant to positive change that would actually allow for economic growth. Its founding was for the purpose of prosperity and free trade at a time when Europe was looking to come together after years of war and conflict, creating common markets in industries such as coal and steel before leading to the first concept of an economic community known as the Treaty of Rome in 1957. Countries such as France, Italy and West Germany began this as a way to increase the amount of trade and build bridges, yet that kind of isolationism no longer exists in the modern day meaning that the need for such agreement is much lower, yet rather than understand this, the European Union instead has become an entity governing with an aim on securing more power over its members with notions to become one – there already exists a flag, anthem, five presidents and its own currency aimed at gaining financial control.
Such structure causes great regulatory distress with issues like the overlooked tax structure limiting business prospects. There is no encouragement towards business development, with the outdated system expecting increased contributions despite the constant decline in economic opportunity. The lack of progress is felt through the development restraints as while long established companies like Volvo continue to thrive, there is no European innovation to provide alternatives to Facebook, Amazon or Google due to the conditions needed to support such ventures simply not existing in a European Union framework.
Not only is this detrimental to the individual governments, but they are actually failing in their trading endeavours. Economies work off of the ability to increase trade as no country can be self-sufficient, and the global market has grown exponentially with its utilisation incredibly lucrative, yet these opportunities are limited as the EU tries to enforce the maximisation of trading within its own borders. This is a severe drawback when considering the potential that may be possible for the states to revolutionise their exports at a time when the market clearly indicates that Europe has actually stopped growing in many major areas.
Some countries joined the Union with the explicit intention to adopt the Euro currency and provide financial stability by entering a market with promises of growth, lower
unemployment through free movement and increased access to favourable trading partnerships that would lead to their own individual boom period. Instead the Euro has underperformed bitterly, instead of increasing the economic performance of such nations it has simply become a divisive issue that causes debate and tension between nations who did and did not adopt it as well as eroding the confidence of member states in the future both internally and also from global partners who sense instability they would suffer from.
This loss of opportunity has also meant that the larger and greater contributing states have been left paying for the failures and mistakes made by nations in financial distress such as Greece and Italy. Countries like the UK, France and Germany are responsible for providing large amounts of bailout funding for such southern European countries who have lost money and expected to be saved if they were to go bust at the expense of other’s economic success. The financial crash of Greece was a prime example of this with the support package arranged considered faulty and poorly designed, especially as if they defaulted and became unable to make repayments, this would have adversely damaged the economies they were relying on due to a large increase in national debt, with Italy too large of an economy and lacking enough financial stability to actually survive should this happen.
These causes continue to be further weakened by the lack of actual enforcement that is possible, the EU has tried to make demands but due to their needing to be a ratification by a majority, there is no scope to make widescale changes such as they tried to do on the matter of austerity which would have actually been counterproductive due to the struggling economies actually needing investment rather than enforced regulation. Even the commitments that were agreed to with 60% GDP levels of debt established as a benchmark are consistently breached by the likes of France and Germany, as such is their position and Influence that there exists no real of way to effectively punish them whilst they would have seen great economic damage had they followed the rules. The EU fails to provide effective governance when it expects economies of greater potential to follow stricter rules and pay larger compensation which limit its ability for success, all for the benefit of less able nations.
Such unequal contribution is a crucial factor behind Brexit, the result of which brings many more questions to the economic viability of the Union. The EU only survives based on individual contribution and the UK’s economy is equivalent to that of 18 other member states, with this kind of extreme financial loss fracturing finances it only serves to show that those still trapped in this agreement will only suffer as they lose both money and trade opportunity should the current sanctions be enforced. There are also weakened economical protections with Britain as one of the largest proponents of a liberal free trade market leaving, it makes it much more possible to revert to a reductionist, continentally restricted trade policy that will contribute to the already expected job losses, anti-federalism and unstable political environment due to be created as other major EU powers look to take over Britain’s power positions. The UK is also America’s gateway and so the special relationship may not translate over into the EU, causing even greater losses from one of the only non-EU trade agreements.
Eurosceptics have been looking for a time to try and launch their own methods of escape,
and political parties in countries such as Poland and Italy are slowly gaining more power to leverage their own possible referendums and subsequent withdrawals, or as a minimum to change the group in a way that would undermine the principles and basic ideals that it intends to represent. If more and more action is taken, the economic outlook will be so unstable that member nations could find themselves considered too risky to trade with and could result in serious depression like states, which would only fuel a greater power push from the EU as it reacts to keep control.
The EU no longer has the same understood function that it was founded to provide, with it serving now as a bureaucratic and isolationist body that seeks to use its own members to ensure personal success despite obvious detriment. The loss of the UK is a signal of how the promise of free trade and economic prosperity has been replaced with doubts and rebellion against overly controlling policy that causes more harm to a country than good. The longer the EU exists in its current form, and the longer it insists on trying to control and manage the trading and economical position of its members, the much lower opportunities there will be to gain economic success. If prospect and hope is the vision for a nation, then they simply will not find it within the European Union.