Nadhim Zahawi is a member of the Foreign Affairs Select Committee and MP for Stratford On Avon.
It is often said by those who wish to remain a member of the European Union that some of the current problems plaguing the organisation are temporary. There is a belief that the refugee crisis, immigration and eye-wateringly high unemployment on the continent will, at some point, come to an end. The idea is that we just need to tough out these difficult few years, but when these problems are solved, the balance of positives and negatives of our membership of the European Union will shift.
Perhaps this would be true, if these problems were to be fixed – but I do not share the optimism that they will be. In reality, I believe that this organisation is incapable of providing a swift or lasting solution to problems.
The Euro has been an almost continuous disaster since the financial crisis struck. Almost a decade on from the start of the financial crisis, the Eurozone has only ever been able to achieve momentary recovery before a new disaster is created. The Italian economy has barely grown in years and there are renewed concerns about their banking system. May saw the fourth month in a row of deflation across the Eurozone. Meanwhile, Greece continues to limp along, with a debt mountain that the IMF has described as ‘highly unsustainable’.
Our Government took difficult decisions and made efforts to fix the roof while the sun was shining: we have seen good growth in GDP and outstanding growth in employment. But other economies of Europe, constrained by a failing currency, remain extremely vulnerable to further shocks. There is a recognition that the European Union needs to take urgent steps to tackle these problems, but what faith can we have that it will? Fast-paced, decisive action is difficult, when you have 28 countries with their different priorities and domestic political requirements. Again and again ,this has led to a half-hearted proposal that will gives momentary relief, but no long term solution.
This difficulty of reaching agreement amongst these 28 countries only looks like getting harder, when you consider the various political movements shaking up democracy around Europe, that either have a chance of gaining power, or of influencing those already in position. Look at the rise of the Front National in France. If Marine Le Pen were President, would her government be more likely reach common agreement with other European leaders? Would governments influenced by Podemos, Alternative fur Deutschland or the Five Star Movement? Political polarisation is increasing in Europe, and as countries diverge from the centre agreement will surely become more difficult. This will lead to the EU, and the Eurozone struggling to reform in the way that will be required, whether or not Britain decides to leave on the 23rd.
This matters for two reasons. Firstly, because the economic failure on the continent has kept unemployment staggeringly high. Almost one in four people is out of work in Greece, one in five is out of work in Spain. The unemployment rate is 12.6 per cent in Portugal, almost 12 per cent in Italy, and over 10 per cent in France. With free movement strongly defended during the renegotiation period, this means that every unemployed person on a continent of half a billion people are able to search for work in the UK. And this is not some parochial arrogance about the attractiveness of our country; in the last Parliament we created more jobs than the rest of the European Union combined. We were truly the jobs factory of Europe.
While the continent faces stingy growth and high unemployment, immigration will remain impossibly high. The Government cannot plan to deliver services according to need, both because we cannot know exactly what number will arrive, and schools, hospitals and houses cannot be built overnight – large influxes can only create scarcity. The argument put forward by Jeremy Corbyn that it is the Government’s responsibility to provide enough for everyone, without knowing how many will come, is either not fully thought through, or signifies an individual entirely departed from reality in favour of an idealistic fantasy world.
The second issue that an ailing Europe hurts our economy. Purely due to geography, it will always be rational for a lot of our trade to be done with Europe, even though digital services will always be global. So whether or not we leave the EU, we will be affected if they fail to reform and rejuvenate their economies.
The concern comes if we are locked into a relationship with them that puts barriers between us and diversifying our trade with the rest of the world. We cannot have independent trade deals with the faster growing, world leading economies of the future, because this is an EU responsibility. And the problem is that the EU is spectacularly bad at it; again because all 28 countries have different priorities.
France has led a rebellion against the potential free trade deal with Latin American bloc Mercosur, because of concerns about the impact it will have on their farmers. Spain described this position as a ‘great error’, but can’t do anything about it. France is also leading opposition within Europe to the free trade deal with the USA. The arduous process of resolving competing priorities delays some deals and scuppers most. You don’t even have to take a view of whether the content of these deals is good or bad to agree that it would be better if it were our government, accountable to the British voters, who decides whether or not they go ahead, rather than another country’s interest group. The arduous process of resolving competing priorities delays some deals and scuppers most.
If we were set free to conduct our own trade negotiations, then we will surely be much better at sealing deals. Our negotiators will only be working in the interests of the British people, rather than trying to negotiate in the interests of 28 countries, with economies and industries that vastly differ from our own. Arguments that we can only negotiate as Europe, when you look at the success Switzerland has had, with an economy and a population a fraction of the size of ours.
I cannot see a realistic scenario where these problems are going to be solved, with lasting solutions put in place. In a globalised world we will never be able to fully insulate ourselves from problems our near neighbours experience, but that does not mean we must then be in a group that forbids us from reducing immigration or diversifying our trade with fast growing areas of the world. Our democratically elected Government, accountable to the voters of the United Kingdom must be able to do this, and must be in control. The only way for that to happen is to vote to leave next week.