When Ursula von der Leyen, President of the European Commission, gave her annual State of the Union address in September 2022 there was hardly even a ghostly presence of the UK, writes Martin Roche. Not only was the UK absent, it did not even figure much in the minds of the EU-27 leaders.
With every passing year, Britain and the EU grow further apart on economic, industrial, research and foreign policy. Even with all the goodwill in the world, the two entities cannot avoid the fact that they are now entirely different political and economic beasts. It is not solely political philosophy that divides us, but vision, spirit and direction.
Britain has chosen a route touted to its electors as a road to an independence that would see Britannia reborn. Instead, Britannia is adrift, rudderless, tossed by elemental forces, bereft of a captain to chart a course. Rishi Sunak’s government has about it an air of terminal decay.
Support for Brexit has nose-dived. Polling in May recorded only 31% seeing it as the right decision, with 54% believing leaving the EU was wrong. Other polling suggests a far higher figure viewing Brexit as a failed exercise. Scotland, which voted 62% Remain in 2016, looks to be over 70% pro-EU. Europe will be central to the general election battle in Scotland, with Labour’s stance troubling a significant number of its potential voters.
The prospect of a Keir Starmer administration may cheer many for simply seeing the end of the Conservative government. When it comes to Europe, Starmer’s populist position (thought by much of the commentariat to be temporary electoral posturing) moved into full populism with his May 2023 Daily Express article that not only confirmed ruling out rejoining the EU and the Single Market but also went full UKIP:
“Our European friends and competitors aren’t just eating our lunch – they’re nicking our dinner money as well.”
The Labour leader tells us he will make Brexit work. Accusing our friends, neighbours and so recently partners in a great enterprise is surely not a good way of setting out on the rocky road to British recovery.
Solidarity with Ukraine
While the UK has been exercising its democratic right to government by wishful thinking, the EU gives all the appearance of an organisation that knows what it is doing and is setting about doing it.
Von der Leyen’s speech told of a Europe united in its response to Putin’s war with Ukraine and of the member state’s resolution to strengthen the Union economically and politically. She announced that the EU had beaten by two years its aim to connect Europe’s electricity grid to Ukraine. As a result, Ukraine is now exporting energy to Europe, earning that battling country foreign currency that it can spend fighting the war and looking after its people. All import duties on Ukrainian goods coming into the EU have been suspended. Soon, Ukraine will be part of the EU’s free roaming mobile phone area. Work is going on to essentially make Ukraine part of the Single Market, a move that will boost Ukraine’s economic performance and resilience.
Russia’s attack on Ukraine was also an attack on Europe’s energy supply chain. The Union’s response was quick and effective. It has included a massive increase in gas storage, a windfall tax on energy companies that will raise more than €140 billion that is being distributed to member states to help cushion the economic shocks of the war and the pandemic. The EU’s strategic drive is to replace fossil fuels with renewable energy. A new European Hydrogen Bank has been set up. It has an initial €3 billion to invest to help build the future market for hydrogen.
Central to von der Lyden’s presidency is #NextGenerationEU. It encapsulates a range of measures involving billions of Euros that aim to accelerate Europe’s ambition to be the world’s first net zero continent, while creating a green economy that stimulates technological innovation, infrastructure investment and a skilled green workforce. The programme has already seen investment of €100 billion, with another €800bn in the pipeline.
On the small and medium-size business front proposals are being developed to improve the late payments legislation, so that small businesses face less risk of failure because of big customers paying late. Creating a more uniform tax system across the EU will also help reduce bureaucracy for SMEs and make t easier for them access the benefits of the Single Market.
The EU’s drive to secure the Union’s energy supply by building renewables capacity is being replicated in the strategically vital areas of semiconductor chip and battery manufacture. Currently, the world’s biggest chip making nations are, in order of size, Taiwan, South Korea, Japan, USA and China. The rest of the world is beholden to a majority of countries located in an increasingly unstable part of the globe. China not only threatens Taiwan’s sovereignty. It is actively investing in its chip-making industry, while rapidly building its own capacity. The EU has responded with the European Chips Act. Its first fruits have seen the US giant, Intel, invest in a €17bn plant, now under construction in Germany. It is the largest ever inward investment to Europe.
The European Battery Alliance, was launched by the EU in 2017. Soon, two thirds of all Europe’s battery demand will be met by factories inside the EU. Poland, Hungary, Germany, Sweden and France rank, respectively, 2nd, 4th, 5th. 6th and 9th as battery manufacturing nations. For all that, the self-sufficiency challenge is huge for the EU and almost all the rest of the world. China makes 77% of all the planet’s batteries. That means it also effectively controls the flow and price of battery raw materials. The EU has launched an initiative designed to give it more assured access to raw materials. It is also prompting R&D to test new materials and processes and innovate existing technologies.
Toughening up on corruption
A snapshot of recent developments in the EU would not be complete for UK readers without mention of measures in train to toughen up Europe’s legislation on corruption. It aims to “raise standards on offences such as illicit enrichment, trafficking in influence and abuse of power, beyond the more classic offences such as bribery.” In defence of democracy, the EU also proposes to include corruption in its human rights sanctions regime.
Sadly, the UK will enjoy none of the benefits that should accrue from the EU’s actions on energy supply, climate change, small business stability, strategic economic development initiatives or scientific cooperation. To those lost opportunities can be added what has already been lost.
Speaking in May in Bratislava, at a meeting of Balkan EU-candidate countries, von der Leyen said that for the countries that had joined the EU in the past 20 years “access to the Single Market has been the main driver of economic growth.”
The folly of Brexit
No nation was a more enthusiastic champion of the idea of the Single Market than the UK. It saw it as a means of cementing market capitalism across Europe, widening and deepening free markets in goods and services and keeping big government at bay because of the demonstrable success of business in improving the lives of Europeans. Now, we watch from the side lines, marooned by hubris and political posturing.
But there is great hope. The British people, in all their intelligence and common sense, have seen the folly of Brexit. The door is open to those with the case and the energy to campaign for re-joining the EU. Carpe diem.