Can Europe Make It?

What we don't say

Maximilien von Berg
23 May 2014

These European elections have been about saying ‘No’ to Brussels. But first of all, elections are a time to sanction or praise elected politicians – not a system.

There are reasons to be dissatisfied with Brussels: problems associated with the common currency, the costly European bureaucratic monolith and the latest trend, the fear of immigrants snatching jobs and benefits from the indigenous. Yet critics seem to forget peace, free trade, the free movement of labour and capital, myriad university exchanges and the net benefits of immigration in their assessment.

The EU is the world’s largest trading bloc. Just in the UK, one of the most EU-averse these days, membership benefits are estimated between £31Bn and £91Bn, an average in the ballpark of £1200 to £3500 per household annually.

The absence of trade barriers within helps most European businesses and fosters prosperity – no doubt this is why many other regions have now emulated our system. As Adam Smith recoiled, "a rich man is likely to be a better customer to the industrious people in his neighbourhood than a poor, so is likewise a rich nation. Trade restrictions, by aiming at the impoverishment of all our neighbours, tend to render that very commerce insignificant and contemptible."

Some complain that foreign qualified workers from lower income member countries take the jobs of those in the west. But Italian doctors can work in France and Spanish engineers can work in Germany. These benefits are directly derived from the free movement of labour, one of the benefits of the EU.

This allows vacant posts to be filled with available labour, wherever it may be within the Union, as long as workers are interested. Belgian students go study in the Czech Republic and Hungarian students in Scotland thanks to the Erasmus programme that provides cheap (or at least not more expensive than the home university) and very advantageous exchange programmes between universities. This scheme has been greatly facilitated by the cooperation of institutions and governments, even though Europe is not vital to its existence.

Many immigrants are poor; that’s true. But in the UK it is estimated that immigrants who arrived after 1999 are 45% less likely to receive state benefits. Statistically, recent immigrants from the European Economic Area contribute on average more in taxes than they receive as transfers.

Some figures even hint that up to 3.5 million UK jobs could be dependent on EU membership. According to the OECD and the National Institute of Economic and Social Research (NIESR), 0,5% of GDP growth can be accounted for by immigrants in the UK. Finally, if immigrants are truly a burden on welfare states, less than a third of net migration to the UK in recent years has been from the European Union. Immigration is beneficial to London and highly praised by Boris Johnson – London’s Conservative mayor – but UKIP keeps using the analogy of Romanians flooding the country as a panacea against it.

In truth, immigration does not hold the same track record in France and Germany, where it respectively exerts a toll of -0.5% and -1.1% on GDP, according to the European Commission.  Even though Germany is poised to largely outperform France, this figure can come as surprising in Europe’s leading country in levels of contributions. In France, the underlying reason is the legalisation of illegal immigrants and the lax rules on family regrouping protractedly weighing on an ailing economy  - something that the Socialists dogmatically refuse to admit.

This was not always the case, and in 2010 Reuters reported a net profit of 12 billion euros for the French government thanks to taxes paid by immigrants in the country. In the years preceding Hollande’s election, France may have been spared by the fact it was more wisely governed under Sarkozy’s influence ever since he had been Minister of the Interior back in 2002.

Before closing this column and handing over the responsibility to voters today, we must consider Europe’s democratic deficit. Sure, the European Parliament operates behind what are, at least partly, closed doors, and the European Commission is not directly accountable for the decisions and directives it picks – even though they ought to shape the lives of 500 million Europeans!

This scenario contradicts the ideals of democratic principles. Nevertheless, if we want to correct the democratic deficit, the situation will not be found by casting a ballot in favour of anti-EU protest parties. The direct consequence of high scores among protest anti-immigration/anti-EU parties will directly lead to further democratic dilution.

In practice, if centre-right and centre-left European alliances are hardpressed just to retain a majority in the European Parliament, due to the sharp increases in Eurosceptic votes, these moderate parties will have to carve out further compromises – thereby widening the democratic deficit which already plagues the EU – and represent even less the policy preferences of those who voted them in.

Politics is not always a honourable game, and never is it a perfect science. But this election in particular, because it falls at a possible corner in history, deserves attention and requires that votes are not profligately wasted towards the wrong ends.  Yet free trade should not be equated with the absence of borders and nor should the free movement of labour and capital be interpreted as the validation of anarchy in Europe. Many checks and changes must be imposed on the European system and its workings, but the project is at its heart worth fighting to better our old continent. 

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