If the EU is determined to turn in on itself, that could work to the advantage of Britain. If overseas businesses are to be deterred from investing in the EU, they are likely to be attracted to Britain instead — so long, that is, as they are made to feel welcome here. Britain can become what many in the EU fear most: an open, opportunity economy sitting just 20 miles off the French coast...
Coffee House
Britain has no need to fear Fortress Europe
The Spectator
The Spectator
17 May 2017
It’s now a tradition for an incoming French president to make his first foreign trip a visit to Berlin. Yet even by past standards, Emmanuel Macron’s dash to meet Angela Merkel on the day after he was inaugurated seemed indecently quick. The lightning meeting at the German Chancellery was a statement of intent by the pair that the European Union is not only far from finished but that they intend to carry on with an even deeper union.
Macron says he wants no less than a ‘historic reconstruction’ of Europe, with a single finance minister to cover the eurozone. Contrary to his reputation as an internationalist, he called for a ‘Buy European Act’, which would freeze non-EU companies out of public contracts across the EU, and for rules to prevent strategic companies falling into the hands of non-EU owners. While less forthcoming with big ideas, Merkel spoke of the harmonisation of company taxes across Europe. It’s Europe First for her.
Since the vote for Brexit last June, the future of the EU has seemed to hang in the balance. There was a possibility, even probability, that other countries would be inspired to hold their own in-out referendums. But with the defeat of Marine Le Pen the threat seems to be receding.
The victory of Angela Merkel’s Christian Democrats in a regional election in North Rhine Westphalia has consolidated her position. She is likely to win re-election in September, not because Germans are impressed by her record, but because the Social Democratic opposition has collapsed in Germany, as elsewhere in Europe. The EU will go on, at least for now, and along its existing trajectory. Its leaders seem intent on carrying on as they have always done, in defiance of their growing number of critics, searching for new ways to effect the ‘ever-closer union’ that was laid down in its foundation treaty.
Emmanuel Macron’s statements also entrench the concept of Fortress Europe. He wants an EU whose internal doors are left hanging open but whose drawbridge is ready to be raised at any moment, with a pot of boiling oil on the ramparts at the ready. To him, free trade means doing business with other members of the club while erecting protectionist barriers against non-members.
The EU has long dragged its heels on promoting free trade outside its borders and still has no trade deals with the world’s three largest economies: the USA, China and Japan. Under Macron’s influence this is likely to continue.
For Britain, the revival of the EU’s integrationist ambitions offers opportunities as well as dangers. Angela Merkel has already suggested, to the dismay of German businessmen, that she considers the principle of being seen to grant Britain a poor deal more important than the commercial interests of her own industries. Trade being very much a two-way process, it will be impossible for the EU to punish Britain without punishing itself.
But if the EU is determined to turn in on itself, that could work to the advantage of Britain. If overseas businesses are to be deterred from investing in the EU, they are likely to be attracted to Britain instead — so long, that is, as they are made to feel welcome here. Britain can become what many in the EU fear most: an open, opportunity economy sitting just 20 miles off the French coast.
Many Remainers in Britain, too, seem to be afraid of this prospect. Jeremy Corbyn has complained that Theresa May wants to turn Britain into a ‘low-wage tax haven’. But that is an oxymoron. It would be an odd tax haven that ended up with low wages. On the contrary, whether it is Monaco, Jersey or the Bahamas, locals enjoy higher wages than comparable places which are not tax havens, as incoming money boosts the economy to the benefit of all. In Jersey’s case, full-time employees enjoy median weekly earnings of £560. On the Isle of Wight it is £492 — and with higher taxes too.
Emulating a Jersey or Monaco-style tax haven is not a viable model for a country of 65 million people. Still, there is no reason why Britain should not attract investment by creating a low-tax and business-friendly environment. This is not something that could be achieved through a Labour General Election victory – the party’s manifesto proposes raising corporation tax from 19 per cent to 26 per cent without seeming to realise how that would drive away highly mobile international businesses.
Otherwise, it is a policy which could be pursued unashamedly to attract investment away from EU countries. If the EU is going to do as Merkel wants and harmonise company tax rates across the union, it is going to make it very easy for a Chancellor of the Exchequer to undercut them.
In spite of this week’s show of strength in Berlin, the EU could yet meet its Waterloo. Euroscepticism still abounds in Denmark, Sweden and even the previously staunchly pro-EU Netherlands. The debt crisis in Greece has yet to be solved and Athens is due to settle more of its loans in July, with bailout money dependent on pension reforms which have already brought Greeks out on to the streets. The euro could yet collapse.
Britain has no need to fear an EU which is determined to close ranks against it. On the contrary, the regulatory reforms proposed by Merkel and Macron ought to play into our hands.
https://blogs.spectator.co.uk/2017/05/britain-no-need-fear-fortress-europe/
Coffee House
Britain has no need to fear Fortress Europe
The Spectator
The Spectator
17 May 2017
It’s now a tradition for an incoming French president to make his first foreign trip a visit to Berlin. Yet even by past standards, Emmanuel Macron’s dash to meet Angela Merkel on the day after he was inaugurated seemed indecently quick. The lightning meeting at the German Chancellery was a statement of intent by the pair that the European Union is not only far from finished but that they intend to carry on with an even deeper union.
Macron says he wants no less than a ‘historic reconstruction’ of Europe, with a single finance minister to cover the eurozone. Contrary to his reputation as an internationalist, he called for a ‘Buy European Act’, which would freeze non-EU companies out of public contracts across the EU, and for rules to prevent strategic companies falling into the hands of non-EU owners. While less forthcoming with big ideas, Merkel spoke of the harmonisation of company taxes across Europe. It’s Europe First for her.
Since the vote for Brexit last June, the future of the EU has seemed to hang in the balance. There was a possibility, even probability, that other countries would be inspired to hold their own in-out referendums. But with the defeat of Marine Le Pen the threat seems to be receding.
The victory of Angela Merkel’s Christian Democrats in a regional election in North Rhine Westphalia has consolidated her position. She is likely to win re-election in September, not because Germans are impressed by her record, but because the Social Democratic opposition has collapsed in Germany, as elsewhere in Europe. The EU will go on, at least for now, and along its existing trajectory. Its leaders seem intent on carrying on as they have always done, in defiance of their growing number of critics, searching for new ways to effect the ‘ever-closer union’ that was laid down in its foundation treaty.
Emmanuel Macron’s statements also entrench the concept of Fortress Europe. He wants an EU whose internal doors are left hanging open but whose drawbridge is ready to be raised at any moment, with a pot of boiling oil on the ramparts at the ready. To him, free trade means doing business with other members of the club while erecting protectionist barriers against non-members.
The EU has long dragged its heels on promoting free trade outside its borders and still has no trade deals with the world’s three largest economies: the USA, China and Japan. Under Macron’s influence this is likely to continue.
For Britain, the revival of the EU’s integrationist ambitions offers opportunities as well as dangers. Angela Merkel has already suggested, to the dismay of German businessmen, that she considers the principle of being seen to grant Britain a poor deal more important than the commercial interests of her own industries. Trade being very much a two-way process, it will be impossible for the EU to punish Britain without punishing itself.
But if the EU is determined to turn in on itself, that could work to the advantage of Britain. If overseas businesses are to be deterred from investing in the EU, they are likely to be attracted to Britain instead — so long, that is, as they are made to feel welcome here. Britain can become what many in the EU fear most: an open, opportunity economy sitting just 20 miles off the French coast.
Many Remainers in Britain, too, seem to be afraid of this prospect. Jeremy Corbyn has complained that Theresa May wants to turn Britain into a ‘low-wage tax haven’. But that is an oxymoron. It would be an odd tax haven that ended up with low wages. On the contrary, whether it is Monaco, Jersey or the Bahamas, locals enjoy higher wages than comparable places which are not tax havens, as incoming money boosts the economy to the benefit of all. In Jersey’s case, full-time employees enjoy median weekly earnings of £560. On the Isle of Wight it is £492 — and with higher taxes too.
Emulating a Jersey or Monaco-style tax haven is not a viable model for a country of 65 million people. Still, there is no reason why Britain should not attract investment by creating a low-tax and business-friendly environment. This is not something that could be achieved through a Labour General Election victory – the party’s manifesto proposes raising corporation tax from 19 per cent to 26 per cent without seeming to realise how that would drive away highly mobile international businesses.
Otherwise, it is a policy which could be pursued unashamedly to attract investment away from EU countries. If the EU is going to do as Merkel wants and harmonise company tax rates across the union, it is going to make it very easy for a Chancellor of the Exchequer to undercut them.
In spite of this week’s show of strength in Berlin, the EU could yet meet its Waterloo. Euroscepticism still abounds in Denmark, Sweden and even the previously staunchly pro-EU Netherlands. The debt crisis in Greece has yet to be solved and Athens is due to settle more of its loans in July, with bailout money dependent on pension reforms which have already brought Greeks out on to the streets. The euro could yet collapse.
Britain has no need to fear an EU which is determined to close ranks against it. On the contrary, the regulatory reforms proposed by Merkel and Macron ought to play into our hands.
https://blogs.spectator.co.uk/2017/05/britain-no-need-fear-fortress-europe/
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