Last week I had the pleasure of going to Blenheim Palace to watch Poland’s Foreign Minister Radek Sikorski deliver a powerful speech about Europe – and the UK’s increasingly unhappy role in it.
Here is the full text.
Some extracts:
While you are an important market for the rest of the EU, accounting for about 11% of the rest of the EU’s trade, your trade with the EU is 50% of your total trade. No prizes for guessing who would have the upper hand in such a negotiation…
So think hard: the EU is a market of 500 million people who enjoy the highest average standard of living in the world. According to the IMF and the World Bank, Europe’s GDP is about 2.5 times than that of China and nine times that of India. Do you want to lose your privileged access to that market?
… Yes, the UK outside the EU would have more freedom of manoeuvre, in a number of significant respects. But the UK would be less powerful and less free.Certainly Britain would lose its influence in many international forums. By negotiating as one bloc in world trade talks, the European Union gives all of us, the UK included, a powerful and united voice to use when speaking to China and the USA. If you leave, you lose that…
Britain standing alone would suffer not only on multilateral level. Are you sure that you will command the same kind of attention in, say, Kuala Lumpur, Lagos and Bogota? What about Washington? At the moment, your hosts know that you speak on behalf of London and have an influence to shape decisions taken in Brussels on behalf of the whole continent as well. Alone, you won’t be so interesting…
You could, if only you wished, lead Europe’s defence policy. But if you refuse, please don’t expect us to help you wreck or paralyze the EU.
Do not underestimate our determination not to return to the politics of the 20 century. You were not occupied. Most of us on the continent were. We will do almost anything to prevent that from happening again.
It’s not difficult to see why. Poland wants to be with Germany and France as partners, leading a strong, democratic European political-economic space. We do not want to be a buffer between Western Europe and a less democratic Eurasian political-economic space dominated by Russia.
More importantly, we believe the Eurozone will survive, because it is its members interest for it to survive. The leaders of Europe will step up operational integration at the European level. The new institutional arrangements within the EU will be different. But eventually they’ll be strong. They’ll work because Europe’s leaders want them to work…
All of which is fine as far as it goes. But the speech seemed to me to steer wide of the key issues:
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is the Eurozone sustainable even though European leaders insist it is?
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Are EU voters going to put up with the increasingly desperate manoeuvres being made to keep things afloat?
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And if heavily new centralised arrangements can be devised to keep the Eurozone going, will they be democratic in any sense that we understand the word?
Look at this piece describing Roger Bootle’s firm view that the Eurozone is not viable:
Bootle is not shy about championing his highly unpopular view. "The euro is a depression-making machine," he tells Fortune. "The politicians keep throwing money to support the weaker nations’ debt problem. They never talk about restoring growth. Far from a disaster, a breakup of the euro is the only way to bring back growth and get Europe out of this mess. It can’t happen soon enough."
… But the continued bailouts are just buying time. Even economists who dread a euro breakup admit that it will probably happen eventually unless Germany and other healthy nations provide far greater support to their weak neighbors. "Europe needs to create federal-style debt shared by all the eurozone members," says Greek economist Yanis Varoufakis. "If that doesn’t happen, the eurozone will probably dissolve."
The bet here is that Bootle is right and that the euro will fracture in the next few years. The result will be extremely messy in the immediate aftermath, bringing severe hardship to the exiting countries — a rash of bankruptcies, giant defaults on sovereign debt, and temporary panic in world stock markets.
But the pain that a breakup compresses into a one-time shock will happen anyway if weak nations remain in the euro. It will simply stretch over a number of years and turn out far worse. As Bootle argues, Europe must choose growth, and a split in the euro will bring it back with surprising speed.
So the answer to the eloquent Sikorski argument is that it misses the point. Yes, there are plenty of good reasons for the UK to stay within a formal EU framework much as it is now (just as there are some good reasons for some sharp-edged changes to that framework).
But what is increasingly on offer is very different. A radically centralised Eurozone that puts democracy very much in a post-modern mysterious subservient place and under the control of mainly unelected European officials and central bankers. A Eurozone in which huge transfers of wealth occur from richer Europeans to less richer Europeans without any clear-cut political legitimacy.
So the drama is not the UK drifting away from the European Union – it is the EU drifting away from us.
Oh, and by the way – will Poland itself be joining the Eurozone any time soon?
For 19 k PLN per piece (ca. 4 k EUR), Charles?