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Analysis
Britain can manage its own affairs

Britain can manage its own affairs

Rest of world forging ahead of introverted EU

by Daniel Hannan in Brussels

Thu 14 Apr 2016

Over the past decade, countries such as China, India and Ethiopia have doubled the size of their economies. But the euro area, incredibly, is the same size now as it was in 2006. Just as the 18th century saw a gravitational shift from the Mediterranean to the Atlantic, so our age is witnessing a shift from the Atlantic to the Pacific. As recently as 1980, according to the International Monetary Fund, the 28 states that now make up the EU accounted for 30% of world GDP. In 2015 that figure was 17% and falling.

Developing economies should grow faster than developed ones, just as sunflowers should grow faster than oak trees. But it’s worth noting that the euro area is being outperformed by Canada, the US, New Zealand – and, indeed, everywhere else. I recently made a jocular remark to the effect that every continent was growing except Antarctica and Europe. A Spanish friend sent me a list of statistics showing that the chief economic activity in Antarctica, cruise ships, is in fact booming. Britain, he pointed out, is trapped in the world’s only stagnant trade bloc.

The UK is a merchant and maritime nation with few natural resources. Our prosperity depends on buying and selling. Yet as long as we are in the EU we can’t sign a bilateral free trade agreement with the parts of the world that are growing. The EU won’t talk to China. It shelved its talks with India after nine years of stalling. Its negotiations with Australia are blocked because of a dispute involving Italian tomato-growers.

When the EU was established, freight costs were high, refrigeration was expensive and travel rare. Regional trade blocs looked like the future. But in an age of Skype and cheap flights, distance has never mattered less. Why should Britain allow an accident of geography to trump ties of language and law, habit and history, culture and kinship?

British Remain campaigners like to stress that Britain wisely stayed out of both the euro and the Schengen area. By refusing to join the two initiatives that Jean-Claude Juncker, the European Commission president, calls the EU’s ‘greatest achievements’, Britain has indeed insulated itself against the worst of the financial and migration crises. For the rest of the EU, the priority is to keep the euro and Schengen in place as the pillars on which political integration rests. While the rest of the world forges ahead, the EU will remain introverted – obsessed with preserving its antiquated structures.

Because Britain kept its borders and its currency, it is lucky enough to have a choice. Should the UK make the euro and migration problems its own? Or should it strike a different deal with the EU, retaining the benefits of free trade, intergovernmental collaboration and a military alliance – but removing the UK from Brussels’ political structures, thus allowing euro area states the freedom to pursue their own vision of further integration?

As recently as 2006, the EU was taking 55% of British exports. Last year, that figure had fallen to 45%. Where will it be in 2030 – or 2050? How low must it go before we stop hearing the bizarre argument that we should merge our political institutions with those of nearby states so as to have a minority voice in the setting of standards over a declining portion of our commerce?

There are 193 states in the world; 165 of them are not in the EU. I do not believe that Britain is unable to manage its own affairs in the same way as, say, New Zealand or Switzerland. Surely Britain is not so diminished as to have lost our global vision, our confidence in our own democracy. That’s why I shall be voting to leave on 23 June – and I hope the majority of the electorate joins me.

Daniel Hannan is a Conservative MEP and author of Why Vote Leave, published by Head of Zeus. This is No.33 in the series.

OMFIF’s series on the UK EU referendum presents a wide variety of perspectives from Britain and around the world ahead of the 23 June poll. We are assuring a balance between many different points of view, in line with OMFIF’s overall neutral stance on the issue.

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