The Roots of Euroscepticism Amidst a Brexit

Our destiny is in Europe, as part of the community. That is not to say that our future lies only in Europe, but nor does that of France or Spain or, indeed, of any other member. The community is not an end in itself.”

– Margaret Thatcher in The Bruges Speech, 1988.

It was in the ‘Bruges Speech’ that Margaret Thatcher’s views on Europe were brought to attention. Her speech highlighted five guiding principles; the first being an “active cooperation between independent sovereign states” which she said was the best way to build a successful European Community. The speech had celebrated the individualistic traditions, customs and identities of nations in the community. She had further added, ““It would be folly to try to fit them into some sort of identikit European personality.”

Since 1973 Britain has been an integral part of the European Union. But June 23 ended this 43-year long association. Through the EU Referendum, Britons voted to leave the EU (popularly known as Brexit).

The news around Brexit fear already increased market volatility and even resulted in the pound falling to its lowest since 1985.

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 The origin of the EU dates back to 1946, which was initially an attempt by Winston Churchill to reconcile France and Germany. As a result, European Coal and Steel Community was formed with six members in 1951 and eventually, the European Economic Community in 1957 under the Treaty of Rome. Following the ratification of the Maastricht Treaty in February 1992, the EU (formerly known as European Economic Community or EEC until 1993) was created in the aftermath of two tragic world wars. The Union came into force in 1993.

The economic and political partnership currently unifies 28 nations of Austria, Belgium, Bulgaria, Croatia, The Republic of Cyprus, The Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. A single market helps Europeans gain access to a single market, promotes economic prosperity and allows people to move around freely within the nations.

The UK’s role in the EU has been a crucial one but has also been termed as “an awkward” one. The United Kingdom is EU’s second-largest economy after Germany and has a powerful military with great influence in global affairs. But time and again, many member nations including the UK have questioned the benefits of their association with the EU.

The Rise of Euroscepticism

Ever since the formation of EU, the Euroscepticism has been on the rise and with looming uncertainty around a Brexit; many would think Britons initiated the term ‘Euroscepticism’. But according to EuroActiv, Euroscepticism is “more than just a British Phenomenon”. Euroscepticism questions the integration and efficiency of the EU model, raising doubts in the minds of EU members. The reasons for increasing Euroscepticism have been different for each country. From unemployment and unfair economic policies to terrorism and a much recent issue of increased immigration, the issues faced by member countries have differed widely.

The term ‘Euroscepticism’ was first used in 1985 by a British newspaper, The Times to “describe a sceptic opposition towards the European Union and its policies that would be more flexible than ‘euro-phobia ‘or ‘anti-Europeanism’.” But many countries had rejected a full membership of the EU including Norway, Iceland, Liechtenstein and Switzerland. In a 1994 referendum, Norway voted against EU membership and subsequently joined the European Economic Area (EEA), along with Iceland and Liechtenstein. Iceland had a pending request since 2009 to join the EU but in 2015, it chose not to be a part of the EU.

The signs of Euroscepticism are becoming clearly evident with the Eurozone crisis in 2008 and a series of austerity packages in many EU member nations. A paper published by The European Council on Foreign Relations revealed, “everyone in the EU has been losing faith in the project: both creditors and debtors, and euro zone countries, would be members, and ‘op- outs’.”

In 2015, Eurobarometer 83 released by The European Commission, since 2014, optimism in 11 countries had decreased, with steepest being in Poland and Latvia. Cyprus and Greece remain pessimistic about the future of the EU, with majorities of 54% and 57% respectively. But a 2016 survey by Pew Research Center reflects contrasting views with regards to Poland’s stance. Conducted in 10 EU nations, the study further revealed some interesting findings of the rise of Euroscepticism. The survey shows that the strongest supporters of the EU membership are Poland (72%) and the Hungary (61%). But in many other nations, the support had been lukewarm. According to the survey, 44% of the British view the EU favorably, including 53% of the Scottish.

Britain’s EU Referendum

As the date of the UK’s EU referendum draws to a close, a consensus on ‘leave/remain’ is far from clear. The speculations around the UK EU’s referendum through contradicting surveys, speeches, and news have already created uncertainty.

But the reasons of Britain exiting the EU have been brewing for quite some time now. Britain first issued a ‘Common Market Referendum’ in 1975, so as to decide whether Britain should be a part of the union (known as EEC then). By a majority of the vote, Britain chose its membership with EEC. Since then, anti-European officials have often questioned the UK’s inclusion and stance in the EU, gradually increasing doubt of the membership across the nation. In a speech 2013, David Cameron made it clear that it was “time for the British people to have their say.” He felt that there needed to be a more “flexible, adaptable and open” relationship between all members, not just Britain. But Cameron has never favored a Brexit in his speech. “I do not want that to happen,” he said. “I want the European Union to be a success. And I want a relationship between Britain and the EU that keeps us in it.”

Even though Cameron doesn’t support a Brexit; he does want the EU to consider a list of demands. The list includes a restriction on EU migrants in the United Kingdom from claiming work benefits until they have been a resident for four years and also the exclusion of Britain from the EU’s founding ambition of an “ever closer union,” so as not to be drawn into additional political integration.

Many EU member nations have blamed the European Union for the failure of the common currency, the Euro. But of the 28 members in the EU, nine EU member nations including the United Kingdom don’t use the single currency, the euro, which was established by the provisions of the 1992 Maastricht Treaty.

Britain’s need to exit has come in the wake of rising immigration and an ongoing euro zone economic crisis. Rising immigration has been a serious concern for the UK. The EU membership allows EU member nation people to freely come to work and live without visa formalities.

According to MigrationWatch UK, the UK has had a history of immigration, but never at such levels. According to the provided data, the latest net migration statistics in 2015 showed an increase of 88% in net migration from 2012 (‘net migration’ is the number of people immigrating to the UK minus those emigrating from it). Proponents of Britain feel that such alarming numbers in mass migration “will change the country forever”. MigrationWatch UK in its August report in 2015 pointed out that even though mass immigration means, “more people make up for a larger economy”, and it does not necessarily mean it would “make up for a better economy”.

Based on data provided by the Office of National Statistics, a recent analysis by Independent argues against the exaggerated statements about immigration made by Migration Watch. According to the Independent survey, the non-EU countries like India, China and Pakistan have contributed more to the increasing immigration numbers than EU member countries. The report further adds, “net migration from India was more than twice as high as from Poland in 2014.”

The Vote to ‘Leave’ or ‘Remain

Many regulatory authorities have raised concerns over a possible Brexit. Brexit was one of the important uncertainties that the US Federal Reserve considered during its recent two-day FOMC meeting. The chair of the International Monetary Fund, Christine Lagarde, had recently warned that the Brexit consequences might range from “bad to very, very bad.” A study conducted in 2016 showed that 70% of Europeans in the survey believed that Britain exiting the EU would be a bad thing for the EU. An IMF report highlights that Brexit could adversely impact the investment in key areas and affect the country’s current account deficit. The immediate effect of Brexit could be on markets, which have already become volatile around the uncertainty.

Leave campaigners (or the Proponents of Brexit) argued that will give it more control over its economy, since it would be free from the common EU regulations. The country would have more opportunities to establish more favorable and independent trade terms with other developed countries. It would be able to negotiate deals as a neutral nation. Leave campaigners feel that Brexit will create more jobs in their own country. The campaigners believe that with a Brexit, $36 billion would be added to London’s economic output, creating more than 200,000 jobs in financial services by 2020. Advocates of Leave camp say a Brexit would save additional costs that are associated with the EU membership. In 2015, the UK’s net contribution to the EU was estimated at about £8.5 billion.

Remain campaigners had argued that Brexit would prompt other EU members to rethink their individual association with the EU. This could lead to the dissolution of the EU. That will create economic unrest and push the global markets into turmoil. British citizens who have been able to work in EU member countries would lose certain protections and benefits from EU employment laws and social protections. Prime Minister David Cameron and Chancellor of the Exchequer George Osborne said that leaving the EU would put the UK at risk of a “DIY recession” for the first time since the Second World War. The US President Barack Obama, Chancellor Angela Merkel of Germany and President Xi Jinping of China have supported that Britain remains with the EU. According to Financial Times, “since the UK joined the European bloc in 1973, real gross domestic product per head has grown faster than in France, Germany and Italy”.

The economic landscape of the EU as a whole and its position in the global economy has changed a lot since its inception. The decision to  exit from the EU is vital for Britain and needs to be carefully analyzed, especially when this special referendum comes after a gap of 41 years.

Featured Image Credits: Unsplash

© 2016 Deena Zaidi. All rights reserved.

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