This is a fascinating tweet from the European Parliament’s Chief Brexit Negotiator:
The @Europarl_EN will never accept the UK can have all the advantage of free trade, and not aligning with our ecological, health & social standards. We are not stupid! We will not kill our own companies, economy, single market. We will never accept ‘Singapore by the North Sea’!
— Guy Verhofstadt (@guyverhofstadt) September 18, 2019
The first thing to note here is that Verhofstadt is very clearly stating that there is a risk to the European Union that, far from being a disaster, Brexit might actually work out relatively successfully for the British.
The “Singapore by the North Sea” reference refers to the ambitions of some Brexiteers, mainly on the right, to implement a low-tax, low-regulation economy post Brexit, while using access to the EU market via a trade deal to attract investment into the UK. Sort of like Ireland on steroids, and without pesky things like EU regulations. The idea is modelled, as the name suggests, on Singapore, which has a per capita GDP of $57,000, compared to the European Union’s $37,000.
Of course, Singapore is also a de-facto dictatorship, with a single party state and a relatively repressive set of laws on human rights.
What’s most interesting I think is that this is the first time we have seen a major EU figure acknowledge that there is, actually, some logic to, and benefit to be gained from, Brexit. Indeed, the risk that the UK might do reasonably well outside the EU is probably the biggest threat the EU faces from Brexit. Inside the Union, the Brits are a nuisance. Outside of it, for good or ill, they are an example.
Of course there’s another point here too – Verhofstadt’s statement is also an acknowledgement that at present, European Union law makes it a relatively unattractive place to do business. The idea that a UK free from those laws would do better economically than countries subject to them is an implicit admission that a good chunk of EU regulations, whatever benefits they may bring, serve to hold back the European economy.
For Ireland, of course, the EU remains the only show in town. Even if you’re a rabid eurosceptic like me, departure from the EU makes no sense for Ireland, because of the massive economic disturbance it would cause just from changing our currency alone.
But Ireland inside the EU should also heed the lessons of Brexit – a successful Europe must be a Europe that can provide jobs and opportunities for its people. At present, youth unemployment is a scourge across the continent, and very few of the world’s top companies are European. Can you think of a European tech giant? Or a European telecoms innovator? Or a European pharmaceutical giant? The leading companies in these fields are American, or Chinese. European companies still dominate only in legacy areas that long pre-dated the EU, like banking and car manufacturing.
Verhofstadt is right – outside the EU, there is a risk that after the initial disturbance, the UK could be very successful indeed.
But a proper answer to that isn’t to try to hobble the UK – it’s to try and reform the EU to make it more competitive than it currently is.
The EU has to have a better answer to Brexit than “we won’t let you succeed”. This isn’t it.