The Common Market dream, has it turned into a Nightmare?

By Ismail Veli……..

The aftermath of the butchery of 2 world wars starting from European rivalry in 1914 and 1939 convinced many European powers that something had to be done to work together in order to avoid another war. The devastation of two world wars at a cost of an estimated 70 million lives, and countless tens of millions of people left homeless, led to the final collapse of the Colonial powers, led to the cold war between what was described as the Western democracies and the Communist east.

The vision of the Common Market was aimed at bringing together the old protagonists to trade and work together. Inter-reliance would reduce the risks of war and would they hoped bring about a diverse and dynamic economic stability and prosperity that would create a new Europe.

The common marklet is born

This vision gave birth to a new Europe with the treaty of Rome on 25th March 1957. The treaty became effective on 1st January 1958. The original signatories to the treaty were Germany, France, Italy, Belgium, the Netherlands and Luxembourg. This was originally referred to as ‘little Europe.’ The Nato Secretary General, Paul Henri Spaak of the time announced that ”Communist countries have launched a colossal challenge to the economies of the West, a challenge to which no single country in Europe could hope to reply.” A united ‘Little Europe’ represents a population of 160 million people. America has 154 million and Russia over 200 million.” It’s ironic that the aim of bringing together in order to avoid conflict in Western Europe was also a defence mechanism against Eastern Europe. In effect old rivalries were buried in order to face the new challenge of the Communist East.

When Great Britain finally joined amidst some reluctance in 1973 it was called the ‘European Economic Community.’ (EEC) Ireland and Denmark joined bringing its membership to nine countries. In order to gain support from the people, the UK held a referendum on 5 June 1975. The 65% turnout voted by 67% in favour to remain a part of the EEC. It was the first time a referendum was ever held in the UK and in addition to making history added legitimacy to UK membership. The next referendum in the UK took place in 2011 when the people were asked if they wanted an alternative voting system to the one in place. The turnout of just over 42% was low but the vote to keep the system in place was won by an overwhelming 68%.

Britian joins the EEC

The expansion of the EEC led to the now European Union. Greece joined in 1981 with Spain and Portugal following in 1986. The expansion on May 1st 2004 added 10 countries with an additional 2 countries in 2007. The latest member, Croatia, joined in 2013 bringing total membership to 28 countries. This was the largest in term of countries but in terms of population it was not so high as many countries had small populations. This last wave of members however comprised a population which was much poorer than the rest of its members. The massive growth of what looked like an unstoppable EU after 2004 however may have also led to its potential downfall. In addition to bringing a massive diversity of people, the voting mechanism, in particular the system of one country can veto all the rest meant that a little country like Malta with a population of no more than 415.000 had the ability to veto countries like Germany’s 80 million and most important the rest of its half billion or so people.

European Union Parliament image

In effect it became unwieldy and many people became sceptical about the viability of such an undemocratic system which was in theory based on the principle of equal nations. The resulting world recession and influx of Eastern European immigrants to the more prosperous Western countries, exacerbated by the immense turmoil of North  Africa and the Middle east led to an influx of immigrants which helped the more nationalist elements argue the viability of an EU which seemed to change beyond what the people were prepared to accept.

Though the UK immigration figures show that the immigrants from outside the EU were in almost equal numbers to those from within, an outcry that the UK needed to take control and reverse this tide led to a massive growth of the United Kingdom Independence Party (UKIP). The pressure of the growth of UKIP forced the Conservatives to promise a referendum to the British so the people could decide their future of ‘IN’ or ‘OUT’.

It was clear that the campaign on both sides was rather poor. The ‘IN’ made it clear that an exit would have economic consequences, while the ‘OUT’s’ dismissed this as ‘Project fear’ The OUT’s were of course using their ‘OWN BRAND OF FEAR’ by telling the people that the UK would be flooded beyond its capacity and that migrants in particular Muslim refugees from the Middle east conflict and Turkey joining the group would bring millions of new migrants. On 23rd June the people finally decided by just under 52% to vote for ‘Brexit’. For those who never thought this would happen it came as a bombshell. Cameron the Prime Minister announced his resignation, Jeremy Corbyn’s half hearted efforts in his support for the EU ‘IN’ supporters has led to a political meltdown.

One does not need to be an economist to realize that there will be an economic price. The ‘EXIT’ supporters rubbished the ‘Project fear’ campaign that claimed the fall of stock market and sterling losing its value, with investors putting on hold any new investment on hold as just scaremongering.

The chickens have now come home to roost. What now? Stocks are in fact falling, the sterling has seen a dramatic fall. Prices of imports will hit people’s pockets, holidays will cost more and the HSBC has already announced that 1000 jobs may be transferred to Paris from London. Royal Bank of Scotland and Barclays shares were down by 10-13  on Monday morning (27th June).

Brexit in or out and at what price

The irony may be that immigration will still continue to grow and the UK may turn out to have a lot less influence than the ‘EXIT’ supporters believe. The world in 2016 is not that of the period of British Colonial might, the dream of past glory is nothing but an illusion based on nostalgia and wishful thinking. Private pensions saved by ordinary people over decades will shrink, investment will be put on hold which may result in reversing the fragile economic forecast downwards. The EU will have its own problems. Its credibility has been shaken and its future looks unstable.

The European project is at a crossroads and only time will show whether Britain and the EU can recover in any economically meaningful way. No doubt after 10-15 years the UK may recover from what can be described as an explosion equivalent to an atomic bomb. The next decade or so however will not be an easy ride. Britain may yet rue the day they embarked on this rocky unknown, while contributing to the potential collapse of the EU dream of bringing everyone together.

One way or another the world will never be the same.