EU Referendum: What is the European Union?

(Title Image: BT)

Before getting into the detail of the EU referendum campaign, it’s worth going over what the EU actually is and how we got to the referendum.

A Brief History of the European Union

Following the Second World War, many nations on mainland Europe saw the need to prevent future conflicts through some measure of economic integration – wars generally don’t occur between countries that are reliant on each other for trade. The first step was the founding of the European Coal and Steel Community in 1952, which created a free market for coal and steel between its member states.

The 1957 Treaty of Rome expanded it into a full customs union/free trade area which created the European Economic Community (aka. EEC, “Common Market”). The then Common Assembly was reformatted as a European Parliament, though some EEC members – notably France under Charles de Gaulle – saw the parliament as a threat to national sovereignty and vetoed EEC expansion as well as vetoing expansion of  the parliament’s powers.

The UK joined the EEC in 1973, with membership publicly endorsed by referendum in 1975 – I return to that later. In 1979, members of the European Parliament were publicly-elected for the first time.

Through the 1980s, the EEC increased its membership to cover pretty much all of US-aligned western Europe, and the 1985 Schengen agreement saw signatory states gradually reduce or eliminate border controls – the UK opted out. The EEC role expanded: it was given its own flag (still used today) and nearly all trade barriers in goods between member states were eliminated.

With trade barriers down, some senior figures wanted currency barriers to be eliminated too. In 1992, the Maastricht Treaty outlined steps towards a single European currency and re-branded the organisation as the European Union (EU). The European Parliament was given a much greater role in decision-making and powers to pass legislation (EU directives and regulations) which harmonised the rules of trade within the EU, but gave member states freedom to meet the requirements however they saw fit.

Following the introduction of the euro in 1999, in 2004 the many different “pillars” of the EU were wrapped up into a single European Union via the Lisbon Treaty, which could be considered a European constitution. The EU expanded again to include many former USSR-aligned Warsaw Pact states in eastern Europe and has largely remained the same since (until the UK’s renegotiation on membership).

What is the EU at heart?

A free trade area – Also known as the European Economic Area (EEA) – which includes non-EU member states like Norway. It’s a way for member states to trade goods and move money across borders without restrictions as long as all members agree to apply the same rules (the rules being EU directives and regulations). This means similar products in all EU member states are legally guaranteed to meet the same standards so there’s no unfair advantage or disadvantage to any particular state or producer….but it also means the rules can be very pedantic.

A currency union (for eurozone members) – 19 EU member states share the euro currency, which is administered by the European Central Bank (ECB) in Frankfurt. The ECB sets the monetary policy for eurozone members, controlling things like interest rates, inflation, money supply and it also carries out reviews of eurozone budgets. As the monetary policies of eurozone members are so interlinked, trade between them has increased – though not as much as anticipated when the euro was dreamt up. The UK isn’t a member as it has an opt-out, as does Denmark.

A free movement area – Citizens of EU member states can move freely between member states to live, work or visit without the need for visas or work permits. EU citizens are also entitled to certain health and welfare benefits, though there are still some restrictions (some public sector and national security jobs can be reserved for full nationals, for example).

A supra-national political union – All EU member states remain politically independent, though the EU had some exclusive control over certain policy areas like customs and the management of the single market. The EU parliament is a democratically-elected body entrusted to represent national as well as pan-European interests and helps pass new directives. The EU Council is made up of the heads of government of each EU member state, while member states nominate a person to the EU Commission (which acts as the EU’s “government”). This ceding and sharing of sovereign power is unique in the world.

A social union – The EU has enabled what were once rivals to put their differences aside (somewhat) to co-operate for mutual benefit, without significantly losing much of their own sovereignty and whilst maintaining distinct cultures. The populations have mixed together and become family and friends, while there are guarantees on things like human rights as well as extra social and employment protections for all citizens.

Road to the Referendum

1973 – The UK joins the European Economic Community/“Common Market”alongside Denmark and the Republic of Ireland.

1975 – The UK holds a referendum on “common market membership”, which the remain side won by 67% to 33%. Support to remain was stronger in England than Wales and Scotland, with membership opposed by both the hard-left and hard-right for different reasons.

1984 – UK Prime Minister, Margaret Thatcher, negotiates a rebate on the UK’s contribution towards the EEC budget, particularly the Common Agricultural Policy (CAP), which was said to benefit other EEC members at British expense.

1988 – Under the leadership of Jacques Delors, the EEC begins a push towards a “social Europe”with greater social and worker protections. Labour starts to ditch its own euroscepticism in favour of closer economic union with the rest of the EEC, including a single European currency.

1990 – Some senior Conservative cabinet members were also supportive of a single currency, with the UK taking part in the system which pegged European currency exchange and interest rates to each other in anticipation of a single currence (ERM). Margaret Thatcher was vehemently opposed to the idea – seeing it as the first step towards a federal Europe, undermining British sovereignty. An outburst against the single currency was one part in a series of events that led to her eventual resignation as Prime Minister.

1992 – The Maastricht Treaty was signed, which would eventually lead to the creation of the euro. Later that year, the UK crashed out of the ERM after a sudden plunge in the value of the pound (Black Wednesday). This secured a UK opt-out of the Maastricht Treaty.

1994-1997 – The Referendum Party was established, campaigning for a referendum on membership. They sent a VHS to every home in the UK, though polled just 2.6% of the vote in the 1997 UK General Election which the cosmopolitan, pro-EU “New” Labour won in a landslide.

1999-2004 – The euro was formally introduced in 14 EU member states. Prime Minister Tony Blair proposed that if the euro met five key economic tests, UK adoption of the euro would be put to a referendum. UK Chancellor, Gordon Brown, consistently rules it out as the criteria on things like government deficits were too stringent for the UK to meet.

A rival to the Referendum Party – the UK Independence Party (UKIP) – grows in visibility as the tabloid press continuously mock “jobsworth” EU regulations (often untrue and dubbed “euromyths”) on things like banana shapes, seeing them as an attack on “traditional” British institutions like the imperial system. Nigel Farage takes UKIP in an increasingly populist, libertarian direction.

2004-2009 – The Lisbon Treaty is signed. The Treaty gives the EU exclusive competence in some policy areas like the customs union, competition rules and external free trade. The EU also expands to include former Warsaw Pact states. The UK Labour government decided not to place any restrictions on migration, and in 2015 it was estimated 3 million people resident in the UK were born in other EU member states. Many migrants settled in eastern and southern England – this being tied to EU free movement rules. UKIP increased their number of MEPs in the 2009 European Parliament elections, including one MEP from Wales.

2009-2014 – High debts in some eurozone members, particularly Portugal, Italy, Ireland, Greece and Spain (aka. PIIGS) leads to a sovereign debt crisis and emergency measures by the European Central Bank (ECB) – mostly underwritten by Germany. The euro survives, but the crisis results in serious political turmoil in Greece.

2014 – UKIP tops the polls in the European elections and becomes the largest party representing the UK in the EU Parliament. Two Conservative MPs – Douglas Carswell and Mark Reckless – resign and win by-elections to become UKIP’s first MPs.

2015 – The Conservatives win the UK General Election, upholding a manifesto pledge to hold a referendum on a renegotiated UK EU membership by the end of 2017. UKIP received almost 4 million votes but lost an MP due to the first-past-the-post system. An Act on the EU referendum is passed by the end of 2015 amidst a refugee crisis in Europe as a result of the Syrian Civil War – to which the EU’s response is widely criticised.

2016 – David Cameron announces a provisional agreement on renegotiated EU membership and sets the date for the referendum on 23rdJune 2016. The renegotiated membership terms (EU Referendum : The Deal) include :

  • A British opt-out from “ever closer union”.
  • The EU Council will be forced to re-discuss proposed directives if 55% of EU member state parliaments reject them.
  • A right to suspend certain benefits for EU migrants if they are placing too great a burden on a member state.
  • Protection for the UK’s financial service sector against “favouritism” toward the eurozone.
  • Citizens of new EU member states won’t have an automatic right to free-movement, with blocks on free movement for people outside the EU if they marry an EU citizen.

In addition, UKIP win seven seats in the 2016 National Assembly election.

What are we voting for on June 23rd 2016?

It’s a simple choice – to tell the UK Government whether the UK should Remain a member of the EU under a renegotiated membership (as outlined above), or Leave the EU and no longer be a member state.

It’s up to you how to make your own minds up. I’m an unenthusiastic supporter of Remain. My mind could be changed if the Leave side produced a convincing argument between now and polling day, but based on what they’ve come up with to date I don’t believe they’ll be able to. That’s not to say the Remain campaign have covered themselves in glory either.

I don’t think the UK would be seriously harmed if it left (but would take a hit), while the EU is in desperate need of reform; but for the time being it’s in the broader Welsh national interest to stay in the EU.

I’m not going to push you in any particular direction. It seems I’ve developed a reputation of being somewhat impartial (for a political blogger) and I’ll give equal coverage to both sides. It’s the strength of the arguments that matter and, in what’s become the leading cliche of this campaign, facts are critical. It won’t be like the 2014 Scottish independence referendum as there are very few emotional arguments and it’s quite a technical subject dealing with things that the vast majority of people simply don’t understand.