domingo, 28 de fevereiro de 2016

Welcome to a two-speed Europe / Brexit would spark decade of ‘economic limbo’, claims top Tory

Brexit would spark decade of ‘economic limbo’, claims top Tory

Europe minister says under EU rules UK would be cut out of single market before it could negotiate new deals

Toby Helm and Daniel Boffey
Saturday 27 February 2016 23.01 GMT

The UK would face a decade of massive economic uncertainty with potentially disastrous consequences for business and the pound if it were to vote to leave the EU, the Europe minister says.

The dramatic warning from David Lidington, a key figure in David Cameron’s renegotiation of EU membership, is part of a frontal assault launched by Downing Street and the Foreign Office aimed at discrediting the campaign for Brexit, now headed by Boris Johnson and Michael Gove.

In an interview with the Observer, Lidington, who has served a record period of six years in his post and has more experience of EU negotiations than most in the cabinet, says the UK would be thrust into economic “limbo” for up to 10 years if the UK were to leave, as it tried to disengage from the EU on favourable terms and then establish a set of highly complex replacement trade deals across the world.

The intervention came as finance ministers of the G20 group of leading industrial nations meeting in China listed “a shock of a potential UK exit from the European Union” as one of the biggest risks to the world economy this year.

David Cameron said: “With so many gaps in the ‘out’ case, the decision is clearly one between the great unknown and a greater Britain.” Writing in the Sunday Telegraph, he said Brexit would create “huge amounts of uncertainty” and added: “It would be our children’s futures on the table if we were to roll the dice.”

Echoing a view shared by the prime minister and George Osborne, Lidington said that, according to the EU rulebook, the UK would be cut adrift from European treaties, and therefore the single market, two years after a vote to leave – before it would have had time to negotiate replacement trade deals.

“Trade deals between the EU and other countries and bilateral trade deals of any type normally take six, seven, eight years and counting,” Lidington said. “Everything we take for granted about access to the single market – trade taking place without customs checks or paperwork at national frontiers, the right of British citizens to go and live in Spain or France – those would all be up in the air. It is massive. It is massive what is at risk.

“You would be in complete limbo and I think what that would do for the pound and for business confidence would be very serious indeed. It could last a decade.”

Boris Johnson performed a sudden U-turn over Brexit, ruling out the possibility of a second referendum after a Leave vote – something he, Gove and other Outers, including former Tory leader Michael Howard, have recently suggested would be possible.

Johnson told the Times he wanted the UK to “get out and then negotiate a series of trade arrangements around the world” and that “out is out”.

As part of a coordinated assault, foreign secretary Philip Hammond accused the Leave camp of confusion and of having no clear idea of what would follow a vote to get out of Europe. He told the Observer: “The Leave campaign has come up with 20 possible options, but they all contain significant risk to the British economy. Leave campaigners now have to answer these key questions: what does leaving look like? How many years would it take to put in place a new deal with the EU? And what will happen to our security cooperation arrangements with the EU?

“Until we have their answers, a vote to leave is a leap into the dark that would put the security of Britain’s future at risk.”

A document published on 28 Februaryby the Britain Stronger in Europe campaign says Brexit campaigners have floated 30 different models of independent statehood from Peru to Iceland, suggested as worthy of replication. The document highlights differences among Out camp leaders over whether the UK would end freedom of movement or continue to make a contribution to the EU budget.

It claims that Matthew Elliott, the chief executive of the campaign group Vote Leave, has said that the UK “would still retain its membership” of the single market but also that “the benefits of the single market are far outweighed by the costs”.

In response, Elliott said: “If we vote to remain, we will keep giving away power and money every year. If we vote to leave, we will take back control and spend our money on our priorities.

“We will be able to kick out those who make our laws. We will be able to have a fairer, more humane and more sensible immigration policy. We will have a new UK-EU partnership based on free trade and friendly cooperation. We will regain our independent voice on international bodies such as the World Trade Organisation, where we have given away our seat to Brussels. We will have more international influence to argue for greater international cooperation.”

In his Observer interview, Lidington said the Out campaign was peddling two contradictory arguments. “Their first belief is that inside the EU we cannot achieve any meaningful change and that too often the other countries are in some sort of nefarious conspiracy against our interests.

“But their second belief – which they hold equally firmly – is that outside the EU these very same countries and government would rush to give us some new deal that had all the benefits of EU membership … I think the Leave campaign is still in a state of confusion about what it actually means by leave.”

At the G20 finance ministers meeting US Treasury secretary Jack Lew expressed clear support for Britain’s continued membership of the EU. “Our view is that it’s in the national security and economic security [interests] of the United Kingdom, of Europe and of the United States for the United Kingdom to stay in the European Union.

“This is an issue that will be decided by the voters of the United Kingdom in June and we certainly hope that [they]reach that conclusion,” he added.

Ukip leader Nigel Farage said the G20 statements were “no surprise” and examples of “mates helping each other out”. “I’m not surprised that big government gets together to support David Cameron. This is big banks, big business, big government all scratching each other’s backs. I don’t think that impresses voters,” he said.

Welcome to a two-speed Europe

Desperate to keep the UK from leaving, Europe is inching towards a dual-track reality.

By MATTHEW KARNITSCHNIG 2/23/16, 5:30 AM CET Updated 2/25/16, 5:47 AM CET

BERLIN — Europe’s leaders emerged from last week’s marathon session with David Cameron hoping they had just avoided a messy divorce.

They may yet discover that staying together can be just as traumatic.

Most of the focus in the wake of the deal has been on whether British voters will endorse the plan hammered out at the Brussels summit. As important as the deal is to the U.K., its impact on the EU may be even greater. Put simply, the agreement effectively rewrites the rules for member states’ dealings with Brussels.

“What it does is set a precedent that everything is up for renegotiation,” one Brussels official said.

Until now, members have generally been compelled to accept the full canon of EU rules and regulations, notwithstanding a few notable exceptions, such as the U.K.’s right to opt out of the euro.

The EU’s agreement with London goes much further, however, creating the political equivalent of an open marriage. While the two sides would retain their legal union, they wouldn’t be chained to one another. Such arrangements may sound good in the abstract. In practice, they can prove tricky.

After the summit, Cameron left no doubt about what the deal would mean: “Britain will be permanently out of ever-closer union, never part of a European superstate … Britain will never join the euro and we’ve secured vital protections for our economy.”

Welcome to a two-speed Europe.

The idea of a closely integrated core Europe surrounded by more loosely linked affiliates isn’t new. Many would argue the dual-track already exists with the eurozone. But nearly all the non-euro countries, including all EU members in Eastern Europe, are obliged to work towards membership in the currency area. So to the degree that the two-speed Europe exists, it has been, at least nominally, temporary.

The EU’s proposed arrangement with the U.K. would go a step further by institutionalizing the so-called à la carte approach to membership.

Instead of a core group of like-minded countries coming together to embrace closer integration, one country is pulling way, opening the door for others to do the same.
With nationalism on the rise across much of Eastern Europe, it’s not inconceivable that countries such as Hungary and Poland will also ask for exemptions from joining the euro or other aspects of the EU.

Over time, such moves could further undermine public confidence in the EU, eroding its legitimacy.

Two speeds, no agreement

Many die-hard Europeans have long-argued a two-speed solution is the only way forward. Influential European politicians from Germany’s Wolfgang Schäuble to Italy’s Romano Prodi have endorsed the idea. The challenge has been in agreeing on what it means.

There’s consensus, for example, that the eurozone needs a finance minister. When it comes to defining the role, however, Berlin, Paris and Rome remain far apart.

So far, steps toward a two-speed Europe have been made under duress, such as when the eurozone created a bailout fund. With the common currency under the threat of collapse during the debt crisis in 2011, the then-17 eurozone countries agreed to pool resources to create the bailout fund. The U.K. refused to participate, however, forcing the euro countries to conclude the agreement outside the European treaty.

Unless the Stay camp wins by a wide margin, Brexit will likely remain on the political agenda in the U.K.
Now, desperate to keep the U.K. from leaving, Europe is again inching toward the two-speed reality.

But this isn’t the model Europe’s idealists had hoped for. Instead of a core group of like-minded countries coming together to embrace closer integration, one country is pulling way, opening the door for others to do the same.

Even if the British voted to remain in the EU, it’s far from certain the agreement would actually work.

One aspect of the deal, for example, would allow London to object to regulatory moves in the eurozone that it believes could place the City at a disadvantage. But the remedy for such disputes is vague, suggesting they could easily escalate, again pushing the relationship to the brink.

More generally, unless the Stay camp wins by a wide margin, Brexit will likely remain on the political agenda in the U.K., especially given the support the Out camp has received from popular establishment politicians.

Time for integration?

In some respects, a positive outcome would be the perfect moment for the core EU to pursue integration. One factor holding countries like Germany back has been the fear of offending the U.K.’s sensibilities. By clearly defining the U.K.’s position, the deal would appear to remove that obstacle.

The question is whether the U.K. would remain sanguine about a more tightly integrated EU once it became a reality or see it as a threat.

For now, that scenario remains remote. Europe, divided by the refugee crisis and its economic travails, is in no position to pursue “ever-closer union.”

Despite those challenges, many Europhiles welcome the deal. The EU has been hobbled for more than a decade by uncertainty over the U.K.’s role and the pace of integration, they argue. Even if more countries follow its example, there is no other way for Europe to move forward.

“There will still be a core. The rest will opt out of certain aspects and won’t have as much influence, but I don’t think it’s that dramatic,” said Thorsten Benner, co-founder and director of the Global Public Policy Institute, a Berlin-based think tank. “That’s sensible and it’s the only way this can work.”

Authors:


Matthew Karnitschnig 

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