RexN Euroblog

RexN Euroblog

RexN's euroblog

This has been set up with a view to the EU referendum.

My own interest derives from teaching Economics, making lessons relevant by using the various treaties to add relevance to theory.

Views expressed are my own and hopefully contribute to debate.

Oompah oompah .... Juncker

EuroblogPosted by RexN Fri, March 31, 2017 12:21:17

As Theresa May has finally triggered Article 50, Juncker and others have made their thoughts known. Are they worth listening to?

He is quoted in various media outlets as saying: “Britain's example will make everyone realise that it's not worth leaving … On the contrary, the remaining member states will fall in love with each other again and renew their vows with the European Union…. Half memberships and cherry-picking aren't possible. In Europe you eat what's on the table or you don't sit at the table.”

His remarks are widely interpreted as intending to punish Britain for daring to leave.

On the other hand, one of his fellow EU presidents, Donald Tusk started off by taking a different approach, saying: “Therefore we must to do everything we can to make the process of divorce the least painful for the EU”. He has since apparently retrenched into the Juncker bunker.

To add fuel to the fire, one of the EU’s chief negotiators, Michel Barnier is also reported as suggesting “complete uncertainty about their rights and their future, the reintroduction of binding customs controls on trade from day one of the UK’s withdrawal, which will inevitably slow down trade and lead to queues of trucks at Dover, serious disruption to air traffic”. He has also suggested that negotiations on substance will not start until Britain meets a “divorce bill” of around £50billion.


Juncker may for a moment wish to remove his blinkers. There has been a lot of falling out in the EU already. Greece has already fallen foul of austerity measures as a result of a system that favours the industrial North as compared to the Mediterranean fringes.

Elections, both in the Netherlands and France have already highlighted a groundswell of unrest among European peoples.

It should not be forgotten what the European Union really is. It is a collection of 27 member states with a nominal parliament. The parliament can not actually put forward legislative programmes. It is the unelected EU Commission that does.

Some states have benefitted, notably Germany whose manufacturing output is effectively underpriced by being part of a euro currency zone comprised of underperforming nations. Estimates suggest that German goods are 15% cheaper in international markets than they would be had Germany not aligned itself in system of stagnant and uncompetitive economies.

Juncker may suffer from disillusionment that the rest of the EU, suffering through austerity, will fall back in love with the supranational body that has caused individual nations’ citizens to suffer considerably.

When it comes to diet, we can sit at our own table. Nowhere else in Europe seems to have a penchant such a hearty start to the day as a full British breakfast. Our table might just be better stocked.


As for Barnier, what he seems to be suggesting is of questionable legality and certainly not in keeping with the EU international treaty obligations agreed in Lisbon, specifically Article 8 which reads:

“The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation”.

Is Barnier really suggesting that the EU can not be trusted to keep its own word? Can the EU be trusted in any other international negotiations such as CETA and TTIP?

It is also worth reflecting on the “worst case scenario”, that of falling back on WTO rules. This is a phrase which can be used with different emphasis. In practice, Theresa May has suggested that no deal is better than a bad deal for Britain. It is the “worst case scenario” in international law, not the worst case in the worst of all possible worlds.

For the EU, firstly, to place artificial border controls might be interpreted as a possible breach of those WTO rules. Secondly, this would reveal the true nature of the EU as a protectionist, inward looking and totalitarian regime.

There is a third element too. In order to cause queues at Dover, then the nations who host cross channel arrivals, specifically France and Belgium, would have to be complicit in those breaches of international law. If speaking figuratively, then the same applies to other countries with sea ports such as Spain and the Netherlands. Each individual country would have to authorise illegal acts in international law.

As for the airport threat, this covers every country in the EU. With competition in international markets for inward investment, any artificial barriers to trade will hardly be encouraging to those companies who seek as a basic minimum the rule of law as a criterion for investment.

Barnier seems to implicitly accept that by putting up such artificial barriers, stating the authority of the EU is akin to accepting that Rotterdam may be a sacrificial lamb. Britain’s exports, 56% are outside the EU, might no longer be routed via the Netherlands.

If the EU wants to start a trade war, then so be it. The EU can demonstrate to the world what an unreliable partner it can be. EU citizens, all of who live in democracies, can express their own discontent when British people decide to drink wine from Australia or the American continent in preference to French, Spanish or Italian varieties.


This brings us back to other political considerations. Theresa May has already hinted that it has been Frau Merkel who has delayed discussion on reciprocal residential rights. There are further suggestions that it is Frau Merkel who has been holding out for the “divorce settlement”.

On the settlement, there are still several issues to be discussed. We do not know how the £50billion figure was arrived at. As a top three contributor to EU funds over the years, the UK has been a significant investor.

Yes, there may be a claim for pension entitlements but let us not forget that the contracts for the likes of Lords Mandelson, Kinnock and Hill have been contracted to the EU, not to the UK. The EU might just be highlighting their own irresponsibility in not funding pension obligations.

There may also be scope for counter claims, notably returns on our input into the European Investment Bank where the clue is in the word Investment. The initial input should be refunded plus any return. If there is no return, then the EU shows itself up once again as incompetent.

There are also returns to investments in science and intellectual property which is held by the EU. Has the EU wasted funds or are we due a return?

There is also the matter of our investment in the institutions of the EU. Perhaps we should expect a few floors of the EU buildings which we can convert into flats, hotels and retail premises in the heart of Europe? We could make a profit out of EU officials and MEPs’ expenses.

Can we even trust the EU figures? It will not have escaped the attention of anyone that EU accounts have not been signed off for decades. Financial accuracy, prudence and diligence are not EU traits.

Let us also suppose for a moment that the media are correct in assuming that Merkel is behind the threatened impasse. If the rest of the EU were to suffer from reciprocal barriers to trade, the rest of the EU would surely become aware. Merkel would face the prospect of being regarded across Europe as a worthy successor to Kaiser Wilhelm II and his Germany’s pariah in the 1930s-40s.

Thankfully, the Germany of today is a strong democratic nation, aware of its industrial strength and with an electorate that can remove Merkel herself.

The German people will be aware that Germany’s biggest trade surplus in 2016 was with the UK. German output is higher value than French cheese or wine. Around 80% of UK car purchases support hundreds of thousands of jobs in the German car and components industries.


There is an alternative route. The EU can respect the people rather than the German autocrat and Brussels bureaucrats. Whether or not Merkel is removed in her forthcoming election, people still need jobs, whether Polish shoemakers, Mediterranean farmers, vintners and cheese makers, car workers from VW, BMW, Mercedes, Dacia and Skoda.

There is a constructive way forward as proposed by Theresa May.

Europe’s citizens deserve better than the so called leaders. They have the opportunity to direct their politicians to stick it up their Juncker. Barnier can and should be persuaded by the Council of Ministers to put the interests of EU citizens and economies before self preservation of a EU Commission. The ivory tower is no place for a Tusk!

Come on EU, Tusk was right first time. Make the process painless. You have a vibrant market and a gateway to the world on your doorstep. Listen to Theresa. If you want to prosper with us, you just May.