31 January 2020

A farewell from Europe – now take your chance outside the EU

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As a European who likes free markets and is wary of Brussels’ mission of an “ever closer union” I was disappointed when Britain voted to leave the EU. I understood why the majority of Brits wanted to leave, but also lamented that the most realistic country in the union would now be departing. Without the naysayers across the Channel, centralisation can proceed apace, with all the negative implications it has for the continent’s economic freedom and – paramount in the Brexit debate itself – democracy.

For a while, there was a sense that after the UK’s decision to leave, Brussels would dial down its federalist instincts and engage in some reflection on the EU’s original purpose of promoting free trade, cooperation, and peace between independent sovereign member states. Indeed, that would not have been far off David Cameron’s sensible pre-referendum demands for an EU that does not endlessly accrue power in Brussels, but hands it back to national governments – where a degree of scepticism, including the option not to adopt the euro, would be possible.

Instead, within months, the ‘more Europe’ juggernaut was back in full flight. Just a year after Brexit, then-Commission President Jean-Claude Juncker was talking about the greatness of the European project and the need for more will by member states to come together and hand over their sovereignty to a supranational organisation. And all this when member states were singly failing to find common solutions to the big questions over the future of the Euro and the migration crisis.

Nor has this push for ever more federalism abated over time. If anything it has got stronger with the new Commission headed by the former German defence minister, Ursula von der Leyen.

Guy Verhofstadt, Europe’s federalist-in-chief, summed up the mood quite well again on Wednesday, saying that “Brexit is a failure of the Union. There is a lesson to learn from it: to deeply reform the Union. To make it into a real Union, a Union without opt-in, without opt-outs, without rebates, without exceptions. Only then we can defend our interests and defend our values.”

Or to put it another way, instead of looking at the actual reasons why the UK opted to leave, why Brits handed a pro-Brexit party a resounding victory in December, and why the likes of Viktor Orbán, Jaroslaw Kaczynski, and Matteo Salvini are as popular as ever in their respective countries, the EU should just hammer home the same old story, clamp down on dissent and continue its one-size-fits-all approach.

For the UK, however, Brexit means a unique opportunity to show how things can be done differently This was the promise of Brexit, after all: that with the newly gained freedom of being outside of the EU, Britain could chart its own course, and become Europe’s “shining city upon a hill”.

Concretely, this means rejecting the EU’s plans to implement a protectionist and centrally planned agenda of industrial policy, trade defence mechanisms, subsidy programs, and massive spending sprees under the Green Deal. Instead of implementing a British version of these plans, the UK could set itself up for success with a different vision.

This vision would be based on free trade and free markets, i.e. the vision of a Global Britain that many Brexiteers have advocated for years. Under Ursula von der Leyen, the EU is planning to develop further trade defence tools with which to unilaterally slap tariffs on other countries, most directly China and the U.S. This protectionist posturing is also visible in the plans to implement a digital tax which would almost exclusively target U.S. tech companies. Rather than following that same path, Britain could become the world’s leading advocate of free trade, signing comprehensive deals with the EU and other partners – and, instead of attacking the U.S., the UK could welcome innovative businesses and strengthen transatlantic ties.

On economic policy in particular, Britain could show how free markets can trigger innovation and foster economic growth. After all, the EU plans for an industrial policy and a massive European Green Deal are based on the conviction that the government should use its power – and taxpayers’ money – to direct the economy centrally and fund projects that it finds useful. It would be, in fact, a clear case of Brussels picking winners and losers in an ever more heavy-handed economy.

Britain could liberate its economy, now freed from the highly damaging Common Agricultural Policy  and the redistributional programs of the Cohesion Funds. Instead of an industrial policy, instead of new taxes, and instead of nationalisations, the UK could use its newly available resources for a comprehensive tax reform and could use its newly found freedom to deregulate the economy and spur innovation. This is especially true when it comes to environmentalism and the fight against global warming, where the UK could become a trendsetter with green policies that are based on the market economy instead of government activism.

The UK will profit immediately upon leaving the EU by taking power back from Brussels and being able to revitalise its democratic institutions, including Parliament. But for ‘take back control’ to be truly meaningful, government must not horde their repatriated power, but rather share it with businesses, entrepreneurs, local communities and Britons in general in a more decentralised way. Leaving the EU to implement Britain’s own version of top-down and centralised planning would defeat the purpose of Brexit.

Three decades ago, Margaret Thatcher warned that “we have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level with a European super-state exercising a new dominance from Brussels.” Today, she might say that “we have not successfully left the European Union, only to see the same dominance from Brussels imposed in London.”

As an outsider looking in, my words can – and should – only have limited influence. But, indeed, the UK outside the EU could follow the Iron Lady’s mantra of “action to free markets, action to widen choice, action to reduce government intervention.” By doing so, Britain can become a beacon for freedom, markets and democracy outside of the EU. This is my hope, as a European, as we say goodbye from Brussels to our great friend Britain.

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Kai Weiss is a Research and Outreach Officer at the Austrian Economics Center and a board member at the Hayek Institute