The Berry | Whatever your political colours

[Gabriel Byng]
The EU, to the average right-wing Europhobe, is a communist plot: a last, sneaky, Stalinist attempt to force Europe into a left-wing economic strait-jacket and liberal economics into a Siberian gulag. A trawl through the Telegraph comment pages or a scan through CU Conservative Association’s blog displays a deep set belief that, in addition to flooding our borders with every Eastern European Tom, Dick or Hans who wants a “British” job and using tax payers’ money to line the pockets of Catalan millionaires, the EU will plunge us all into a centrally planned bureaucratic hell hole.

Read a little further into the convoluted history of Europe’s supranational institutions and it becomes clear that the dominant struggle over the 51 years since its creation has been for trade liberalisation, combating the kind of legal and economic barriers that continue to plague international development. It was for this reason that Thatcher was such an important motor behind the Single European Market (SEM), the EU’s biggest success in the 1980s, and the logical end point of a quest for economic union that started with the recovery from WWII.

The body was created to give the French greater access to German resources, to give the Germans greater access to their own and to give both a kick start in revitalising their industrial infrastructure. It was the project of a few nationally interested bureaucrats willing to break down the strict economic controls imposed on Germany after the war and able to abandon the nationalist protectionism that was the rule in pre-war Europe. The countries that joined were in pursuit of mutual enrichment, which only international agreements could provide: for example, the first two points in Article 3 of the EEC, which sets out the union’s purpose, concern a common commitment to opening national markets. Britain’s comparatively sluggish post-war recovery (it did not join until much later) can be at least partly explained by this.

Since then the EU has slowly flexed its muscles to drive economic integration and, with it, liberalisation. In the last two decades some of the greatest achievements for the EU have been the creation of the SEM, free movement of goods, services and capital, and European Monetary Union: all good capitalist projects. Probably the most famous ruling by the European Court of Justice is on “mutual recognition”: that countries must allow imports of any product recognised as legal in any other EU countries, a critical component of the free movement of goods. The European Commission has been the principal driver across the continent for liberalisation, often against staunch opposition, especially from the French. Its predominant executive function is as a competition watchdog – preventing monopolies and ensuring the health of Europe’s capitalism – most recently with regards to Microsoft.

The Common Agricultural Policy represents just one way in which (French) national self interest has been bought off with a one-off project to pave the way for large scale liberalisation. As well as moving closer to a Smithian utopia, the free movement of people has allowed British firms increased access to cheap labour in the UK – making exports more competitive and encouraging industry at home. Research shows that immigrant labour creates jobs, opens technology and knowledge channels between countries and is the only possible corrective to Britain’s aging population and burdening pension costs.

The EU does have a strong redistributive element but this does not operate like a national welfare state – rather it absorbs a minimal quantity of money (the entire budget is just 1.27% of Europe’s GDP) and redistributes a small proportion of this to poorer countries to help with building infrastructure, compliance with EU laws and the maintenance of democracy. All of these encourage free trade, create safe environments for investment and give greater access for big countries, like ours, to extend abroad. Germany has gained a flourishing manufacturing sector by moving many domestically owned factories eastward to countries which now have legal infrastructure guaranteed by the EU.

Minimal redistribution is a precursor to free markets within the EU. Even more depressing than this low level of international redistribution is the EU’s unwillingness to help the eastern European countries which joined in 2004. Unlike Spain, say, which is a net recipient of EU aid and was able to recover from the years of Franco’s rule thanks to this help, the emerging democracies in the east will have much smaller aid budgets. Many commentators are worried that the EU has forced itself to expand so quickly that it has been unable to ensure these countries have really met the conditions for entry. Nevertheless, the faster the accession procedure, the cheaper.

The EU’s supranational tendencies have been one of the saddest losses since the creation of the European Economic Community in 1957. There will probably never be a federal Europe and we are likely not to see any extension on the competencies of the EU beyond what the Conservatives agreed to in the Maastricht Treaty. It has long been protested that we joined up to an economic union and got a political one.

In truth neither assertion is the case – the EU was never a purely economic force and nor is it now a purely “political” one. In the context of post-war suspicion and the danger of conflict, the organisation was always intended as a political measure to improve international relations, if secondarily to economic concerns. Although the EU is more “political” than ever the most important changes of the last thirty years remain economic – common policies are relatively rare and the apparently micro-level directives that Mail readers like to get so upset over are merely a postscript.