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Analysis
Pain of losing a brother at arms

Pain of losing a brother at arms

UK can play France's role at Europe's heart

by Vladimír Dlouhý in Prague

Tue 10 May 2016

The European Union has become a fragile colossus, tormented by a combination of bureaucracy, failed social engineering, the premature introduction of a common currency, an excessive welfare system and naïve multiculturalism.

Despair over how to cope with migration flows has confirmed Europe is almost always behind the curve, failing to provide solutions on the issues that matter. No wonder Britain is voting on EU membership. No wonder nationalist and right-wing politicians enjoy increasing support.

This is the dark side of European integration. But there are achievements too, albeit hackneyed, forgotten or taken for granted: peace in Europe, the post-second world war economic miracle, the EU’s internal market and the Schengen agreement.

These achievements are more fresh in the memory in central and eastern Europe. Access to the EU internal market after the fall of the Berlin Wall fostered economic growth, as did the gradual liberalisation of labour markets. This was true before the global financial crisis. It is true now, and will be in the near future when growth in central and eastern Europe resumes.

During those years, many of us in central and eastern Europe considered Britain a brother in arms. This might be surprising at first glance. From all possible aspects, central and eastern Europe – historically, socially, politically, and from a business point of view – should lean towards the German (or continental) model. But this was never entirely true, and it is here where British membership of the EU matters.

Central and eastern European countries were always less inclined towards excessive intervention, red tape and a welfare state mentality. There is already too much regulation, but average tax rates, both personal income and corporate, are still lower than in most of western Europe. Labour markets are more flexible and business conditions are relatively benign, despite strong vested interests and persistent corruption in some countries.

As to future growth, productivity and competitiveness, Europe must not stifle business in the straitjacket of high taxation, hidden subsidies and protectionism. Politicians, business and the general public are aware of the importance for our wellbeing of the internal market, including free flow of capital and labour.

For all this, the rest of Europe needs Britain in the EU. We need a large, strong partner country, with a leadership determined to preserve the accomplishments of post-war integration – and at the same time able to stand up against this European foolishness that has brought us to the point of true disintegration. To stand up against politicians who swear on Europe but who are driven by the short-term logic of the political cycle, too cowardly to accept past mistakes and provide a real strategy. To stand up against new messiahs, who are noisy and skilful critics but unable to provide solutions.

Post-war European peace and stability was based on Franco-German co-operation and balance of power. Given French weakness and German strength, this ceases to be true. Britain, despite the Channel and its previous splendid isolation, should be ready to take on this French role, at least to some extent.

Is Britain ready to play this part? Can Europe, be it at the level of member states or in pan-European institutions, admit the time has come for rethinking the entire integration process? Can such reforms be successful? Or shall we let the genie of chaos out of the bottle, leading to disintegration?

These are difficult questions. Now we have probably the last chance to find out the answers.

Vladimír Dlouhý is President of the Czech Chamber of Commerce and was a member of Czechoslovak and Czech governments after 1989. This is No.52 in the series – the 100th article will appear on 23 June.

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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