Those who want to stay in need to base their arguments on more than economicsby Prospect Team / June 22, 2015 / Leave a comment
Read Wolfgang Münchau’s full piece on the economics of Brexit
Those who want Britain to stay in the EU need to look further than the numbers—there is no compelling economic case against Brexit.
Or so Wolfgang Münchau reckons, writing in the latest issue of Prospect. He concedes that leaving would present risks, but none compelling enough to make the case for a vote to stay in.
You’ll need to subscribe to read the full piece, along with most of the issue and our digital archive, but below we’ve run through his treatment of some common economic arguments for staying in. Prospect starts from a strong predisposition that Britain should stay in Europe, but relying on insecure arguments serves nobody—Münchau’s piece, along with Peter Kellner’s exclusive polling, should be a wake up call to those who think we can coast to a Yes vote.
Out of the club
“The really big job the EU will have to accomplish over the next five years is to make the eurozone work,” writes Münchau. That’s going to require some political changes, which may not be in the UK’s interest—even if we stay in, we might end up increasingly distant from our EU partners. “If the current EU is a hybrid between a state and an international treaty organisation, the eurozone will shift the balance in the direction of a state. If the eurozone turns itself into a political and economic union—which it must do to survive in the long run—what would be the UK’s interest in remaining in a union with such a large bloc?” Münchau’s argument runs as follows: the changes to fix the eurozone will require treaty change. The treaty change will also offer Britain a chance to negotiate a deal, based on its status as a permanent outsider. The danger is that the eventual deal is ultimately indistinguishable from the status a British government could negotiate with the EU after a “no” vote. No matter what happens, Britain’s future relationship with the EU is going to be one of semi-detachment.
Going it alone?
“The single market,” writes Münchau, “has a certain ‘motherhood and apple pie’ quality—it is very hard to be against it.” If we leave…