EU Referendum


EU Referendum: damnation by proxy


14/01/2016




In what seems a contradiction of recent claims – that the European Commission is gearing up to take an active part in the referendum campaign - we learn from Reuters that economists employed by the Commission have been banned from researching the impact of Britain leaving the EU, or even talking about it, for fear of getting embroiled in the debate.

Reuters says it has been told that: "There is an internal order not to discuss or study the impact of Brexit", with information that the instruction had come from the office of the Commission president, Jean-Claude Juncker.

A result of this, we are told, will be that the Commission's economic forecasts for the eurozone and the wider EU will take account of political and financial risks in China, the Middle East and the United States but not the glaringly obvious risk that Britain may vote to leave.

This diffidence, according to a senior EU official, arises from the Greek experience, when the Commission had denied it had a "Plan B" to manage a possible Grexit, only the for the press to discover that it had, causing "upset" in Athens and the money markets.

"We learned from the Grexit thing," says an official. "If we do it [produce a contingency plan], the press will find out about it. So this time we're not doing it".

On the face of it though, this would hardly seem to matter. The Commission has plenty of willing proxies, such as the Centre for European Reform., willing to churn out tales of the dire consequences of Britain leaving the EU. The latest offering from this organisation came only yesterday, under the title: "If the UK votes to leave: The seven alternatives to EU membership".

This was written by Jean-Claude Piris, Consultant for EU Law and international public law, and former Legal Counsel of the European Council and Director General of the EU Council Legal Services. This is also the man who so glibly lied to Carolyn Quinn about the fate of British expats when we leave the EU.

Under the directorship of former Economist journalist Charles Grant, CER likes to think itself a cut above the rest, yet Grant himself is not averse to a bit of creative fiction, having also told Quinn all the trade agreements negotiated by the EU would have to be renegotiated by the UK when we leave – something which is manifestly not true.

Given the choice by me on Twitter, of being ignorant or a liar, Grant decided that I was "rude" and blocked my account, even though he feels it perfectly legitimate to brand journalists as liars, without in any way being considered rude.

This is the measure of an organisation that offers no less than seven alternatives for leaving the EU yet fails to mention Flexcit or even discuss the concept of a staged withdrawal – which transforms the dynamics of a British exit.

More careful with his phrasing that Mr Cameron, Mr Piris confines his comments on the EEA (Norway) option to claiming that EFTA states "have to apply the EU legislation concerning the internal market … without having the chance to influence their content significantly". Says Prisis, "They are given the opportunity to express their views on legislation, but cannot vote on what is decided".

Nothing of course is mentioned of the globalisation of regulation and the fact that Norway has significant influence over technical laws, long before they reach Brussels. But then, candid analysis is evidently not part of Mr Piris's brief. He does not refer to globalisation anywhere in his document.

Instead, the partisan Mr Piris concludes that "none of the options available to the UK, in case it were to decide to withdraw from the EU are attractive". And with that, he tells us that any option would take the UK in one of two directions.

Either the UK would become a kind of satellite of the EU, with the obligation to transpose into its domestic law EU regulations and directives for the single market., or it would suffer from higher barriers between its economy and its main market, obliging the government to start trade negotiations from scratch, both with the EU and with the rest of the world, without having much bargaining power.

In short, says Piris, "if the UK chooses to leave the EU, it will be left between a rock and a hard place".

Sadly for the CER, though, the legacy media does not seem to have expressed any interest in Mr Piris's work. For the likes of the Telegraph, they are more interested in the offering of Cabinet Minister Chris Grayling, who is telling us that he "backs David Cameron's plan to renegotiate Britain's membership".

Together with Boris Johnson's declaration that he is not an "outer" and therefore will not be assuming the leadership of the "leave" campaign, these are statements of such banality that one wonders why anyone is bothered with them.

Far more interesting would have been an analysis of the paper by Andrew Duff, published on 12 January and of more than passing interest. A member of the Spinelli Group which produced the Fundamental Law as a proposal for a new treaty, Duff seems to have abandoned his brainchild in favour of what he calls: "The Protocol of Frankfurt: a new treaty for the eurozone".

Whether this reflects a lack of confidence in the ability of the "colleagues" to forge ahead with a new treaty isn't clear. But one gets the impression that Duff is presenting a "protocol" as an alternative to a full-blown treaty, possibly as a means of expediting proceedings.

However, given that there is no difference in substance between a treaty and a protocol, and that the latter – as proposed by Duff – will require the full treaty amendment process as set out in Article 48(2) – which Duff acknowledges – there seems no merit whatsoever in attempting what might be a shortcut. A full-blown convention will still be needed, followed by an IGC.

The implications of Duff's publication should have attracted the attention of the media though – although since the Fundamental Law has been scarcely mentioned, it is unsurprising that it has been given no attention. Nevertheless, readers would have been entertained by his observation that:
European integration has reduced the capacity of national governments to act effectively in many circumstances, but has yet to put in place an alternative government of a federal type at the supranational level. The EU institutions are in the invidious position of being significant enough to take the blame but not important enough to take the credit.
This, as much as anything, is a cri de Coeur for a new treaty, and if Duff – the insider's insider - is signalling that plans for a new treaty are on the rocks, then this is very significant indeed. This is possibly the one instance where David Cameron could be tempted to cut and run, and risk the wrath of the Electoral Commission, and go for an early referendum.

Such nuances, though, are way beyond the ken of the legacy media, which is besotted with local politics and unable to see anything beyond the Channel. But, if there is the slight chance that we are looking at an early referendum, then what really matters is the preparedness of the "leave" groups and their ability to produce credible exit plans.

It really is bizarre that we are so far reliant on the likes of the eurohphile CER to produce details of exit options, which they use as a means of damnation by proxy, while there is no official offering (as yet) from the two largest groups.

Things, however, are changing. We are beginning to see the re-emergence of Ukip "moderates". Flexcit is attracting some support from surprising quarters, and re-energising what has become a tired, stale debate. With that in mind, we're publishing online the short version of Flexcit, running to 33 pages, including the title page. If we are to be damned, let us at least have a suitable counter in place.