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Analysis
Stay or leave: a sovereign choice

Stay or leave: a sovereign choice

Britain, the EU and limits of globalisation

by Kingsley Chiedu Moghalu in Boston

Thu 26 May 2016

At the heart of the debate about Britain leaving or remaining in the European Union lies an argument over the meaning of sovereignty and democratic legitimacy. Everything else is sophistry.

If there is one lesson developing countries and emerging markets should learn from the crisis of the EU, it is that they must be extremely cautious in approaching experiments in multinational integration, despite their faddish but fading appeal.

This advice applies with even greater force to monetary unions, such as the one Africa has fitfully pursued in past years and now shelved. Thankfully for Britain, it has sensibly maintained sterling and has no plans, whatever happens, to jettison it for the euro.

The EU is a political project that has artfully deployed economics to cloak itself with legitimacy. It has sought, ever more stridently, to assume decision-making powers over its member states that are more appropriately reserved for sovereign authority backed up by democratic legitimacy.

The Union wants to transfer such powers to mandarins and potentates in Brussels who lack such legitimacy. In the economic sphere, the euro crisis has exposed the tension inherent in a monetary union not backed by fiscal union.

The historical roots of the EU lie in political jockeying between France and Germany. The two countries are trying to overcome their historical burdens through a political union that would obviate better-forgotten memories. The French sought to retrieve their superpower status from the ashes of Napoleonic defeat. The Germans after the second world war wanted to renounce their previous extreme nationalism, provided everyone else sung along too from the same hymnbook.

Plenty of prospering European countries remain outside the euro (Denmark, Sweden, Poland, the Czech Republic, in addition to the UK), as well as outside the EU (Norway, Switzerland). For all the hype about regional integration, the concept of sovereignty – national populations controlling their national destinies – is alive and well.

Euroscepticism is a strong sentiment in Europe. Bureaucrats and politicians wedded to the European project appear to be clinging to an ideological worldview out of step with the wishes of the populace.

President Barack Obama has weighed in on the side of Britain remaining inside the EU. This makes sense from the standpoint of strategic American interests. But it would be hard to imagine the US or China signing up to anything remotely similar to the Maastricht treaty.

Sceptics in Britain and elsewhere in Europe oppose the idea of political and economic integration because they do not want the restrictions EU law imposes on elected national parliaments' legislative ambit.

As former Greek finance minister Yanis Varoufakis argues in his excellent book And the Weak Suffer What They Must, an alliance of states such as the EU can make many mutually beneficial arrangements of a military or economic nature. But it cannot usurp or overrule the sovereignty of its member states because it lacks the sovereignty and political authority that only the citizens’ democratic action can confer.

For all these reasons, the debate on British membership of the EU is helpful and necessary. Notions such as the end of sovereignty may be beguiling, but they are not true. We see in Britain the contradictions between national sovereignty and cross-border integration: in essence, the limits of globalisation.

Whatever the outcome of the 23 June referendum, the decision will have democratic legitimacy. And we can never take for granted what democracy will bring.

Kingsley Chiedu Moghalu, a Senior Adviser to the OMFIF Advisory Board, is Professor of International Business at The Fletcher School at Tufts University and a former Deputy Governor of the Central Bank of Nigeria. He is the author of Emerging Africa: How the Global Economy's Last Frontier Can Prosper and Matter, published by Penguin.This is No.69 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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