The Bear’s Lair: Britain must detach bits from the USE

Germany’s SPD leader Martin Schulz wants a “United States of Europe” by 2025. While his potential coalition partner Angela Merkel quickly disowned this monstrous idea, it is very probably a genuine ambition that just slipped out. For Britain, the few historically educated citizens of which remember the times when Hitler, the Kaiser, Napoleon and Louis XIV attempted to create a United States of Europe, the prospect was chilling. So what can be done to derail this project, or at least to neuter it?

Preventing Europe from uniting, or lining up allies to battle the resulting evil juggernaut when it did, has been a central feature of British foreign policy for several centuries. While Charles II made friends with Louis XIV, receiving cash and mistresses as rewards for his friendship, once William III took over Britain fought two wars over an entire generation to prevent the domination of Europe by Louis XIV’s France and its Spanish ally. Then, a century later, a similar attempt by Napoleon brought another generation of war, with Britain eventually assembling a coalition of Austria, Russia, Prussia and Sweden to defeat him.

In the twentieth century, Britain had to fight off similar efforts from Kaiser Wilhelm II and Hitler, the second more menacing than the first. You can argue that Britain could have reached a modus vivendi with Louis XIV, still more with Kaiser Wilhelm II, but you cannot rationally argue the same for Napoleon or Hitler.

It was thus historically a highly eccentric decision for Harold Macmillan in 1961 to apply for Britain to join the European Common Market, which became the European Union. Unless he believed his own propaganda, he must have known that the participants’ objective, as set out in the 1957 Treaty of Rome, was an “ever closer union.” The free trading zone that Macmillan assured us he was attempting to join was perfectly in accord with Britain’s historic foreign policy. Indeed, extending free trade on a unilateral basis had been a leading if mistaken objective of the 19th Century Whigs whom Macmillan revered. Nevertheless “ever closer union” should have rung loud warning bells, and to a more perspicacious statesman would doubtless have done so. To be fair, Hugh Gaitskell, Leader of the Labour Party in Macmillan’s time, was never in favor of the idea.

Today, as Britain struggles desperately to free itself from the EU’s stickily ensnaring regulations, while having ever more unjustifiable costs piled upon it, the rational observer must wish Gaitskell had won the 1959 General Election. Britain was due for another decade of dozy Socialism in the 1960s anyway, but at least Gaitskell would have avoided Macmillan’s appalling blunder of Britain’s EU application.

Without that 50-year detour, Britain could have concentrated on reaching regulation-light free trade agreements with the Anglosphere, India (once India ended its own flirtation with dozy socialism) the former Commonwealth – which could have usefully received more attention during the period — Eastern Europe and the emerging markets in Asia and Latin America. That global Britain is what the country must aim for today, but with the disadvantage of an additional 50 years cooped up in a moldering dream of regional hegemony.

In theory, a United States of Europe need not be a threat to Britain, any more than is the United States of America. While a Continental super-state like the U.S., it will have less of a defense capability than the U.S. or China, a very undynamic economy whose entrepreneurs are throttled by mindless environmental and other regulation and an arrogant and corrupt central bureaucracy entirely removed from democratic control. It will be no more amenable to popular wishes than would have been a Europe dominated by Kaiser Wilhelm, and will also lack the Wilhelmine Europe’s baroquely beautiful architecture, economic dynamism and overpoweringly splendid ruling moustache.

In practice, a United States of Europe will generally be motivated at least partly by jealousy of Britain (as of the U.S., but the U.S. is far enough away not to care). Europeans will resent Britain’s relative freedom from regulation, its democratic accountability and its relative economic success (except for the inevitable periods when the half-witted British electorate elects Jeremy Corbyn). They will also resent British tourists (who have to escape the English summer somehow) whether the “milord Anglais” ones in the Dordogne, or the unspeakably non-milord but very English ones on the Spanish and Greek coasts. Thus, a United States of Europe will be a perpetual threat to Britain, as statesmen from William III through William Pitt to Winston Churchill instinctively recognized.

Fortunately, a solution exists. A completely united Europe is an existential threat to Britain, but a fissiparous Europe, where some parts have broken away from the centralizing bureaucracy, is much less of a threat because of the existence of even modest counterweights to the centralized behemoth. Thus, Britain’s principal objective, once it has escaped from the clutches of the EU, should be to detach other countries from it, whether in a looser free-trade grouping or simply in a loose association of like-minded countries.

Britain will not be able to start on this work immediately. It must assure its own survival first. As of April 2019 it will have a gigantic bill to pay the EU, a very unequal trade deal with the EU, full of restrictions on deals it can make elsewhere, and a very tricky relationship with both Ireland and Scotland. Ireland will use its modest trading relationship with Northern Ireland to attempt to detach the North from the United Kingdom, while Scotland will use its citizens’ misplaced love for Brussels to attempt to detach itself from the U.K.

Britain will thus need several years to wind its way out of these difficulties, to cut the remaining restrictions the EU has placed on it, and to make appropriate arrangements with its main potential trading partners, notably the United States, India, Japan and the remaining Anglosphere. During that time it would be good if it could acquire a better government, with a greater commitment to freedoms of all kinds, and disastrous if, as is unfortunately more likely, it acquired a worse one.

Nevertheless, if we are lucky, it is likely that Britain will have worked itself fully free of the EU well before 2025, Schulz’s target date for the USE. Once this has happened, Britain will be an attractive partner for those EU states wishing to choose freedom over enslavement to a bureaucratic super-state. Fortunately, there are a number of potential such partners:

• Poland is already threatening to leave the EU because it doesn’t want Middle Eastern migrants imposed on it – the USE like the USA until 2016 being unwilling to control its borders properly. Poland could easily have an open-borders agreement with Britain, whose borders are defensible, and which already enjoys many Poles in its population.

• Hungary, like Poland has a problem with EU immigration policies. It is certainly detachable from the EU, but may not be a comfortable partner with Britain unless Nigel Farage has been elected prime minister

• Czech Republic and Slovakia – are natural allies of Poland and Hungary and even when as in Slovakia controlled by the left, they are controlled by a nationalist left. Would fit well into a British-organized free trade area.

• Austria. A natural British ally for centuries, the country is increasingly unhappy with Brussels, and not just for immigration reasons. A government that included the Freedom Party might well leave the EU, and possibly partner with Britain and other central European countries in a free trade area thereafter.

• Slovenia and Croatia are increasingly skeptical of the EU (Croatia now opposes Euro adoption 2 to 1) and might leave if an attractive alternative was presented to them.

Other countries are less likely to leave the EU. Benelux and France are so bound up in the EU structure that they will not want to leave. Economic basket cases, such as Bulgaria, Romania and Greece, receive such large subsidies from the EU that they will not want to leave. The Baltic States probably still regard the EU as the best protection against Russian re-annexation. Spain, Portugal and Italy are philosophically a long way from Britain, although Portugal has historic attachments that might have an effect. As for Scandinavia, its countries will leave the EU (and possibly form a trading relationship with Britain) only if they elect nationalist governments rather than, as for most of the last century, politically correct socialist ones.

Even after it has survived the inevitably difficult transition, it will not be easy for Britain to dislodge more than a few countries from the emerging super-state. But it will not need to; the continuing existence of a freer, richer group of countries within Europe and outside the USE will prevent any tendency the USE may have to assert continental or world domination.

And if the worst comes to the worst, there’s always Vladimir Putin’s Russia to lend a hand. But he would be an unpleasant ally, so it would be greatly preferable for Mr. Schulz’s megalomaniac ambition to be strangled at birth.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)