5 Presidents won’t drag UK into EU superstate

by Hugo Dixon | 07.04.2016

Myth: Five Presidents’ report means UK will be dragged into an EU superstate if we vote Remain.

InFact: Not only is it doubtful that the euro zone will create a superstate – even if it did, the UK wouldn’t be part of it. It is true that the Five Presidents want to deepen the single market, but this is a prospect that Britain should welcome.

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A favourite bogeyman of the Leave camp is the so-called Five Presidents’ Report – published last year by the European Commission president and the heads of four other EU bodies. Boris Johnson and Michael Gove say this shows Britain will be dragged “willy-nilly” into a European superstate if we stay in the EU. They have distorted the report.

The Five Presidents’ focus is on shoring up the troubled euro zone. But Britain is not in the single currency and so would not be directly affected by their most eye-catching proposal, a euro zone treasury. It will not lead to control of our taxes, as Gove alleges. It is also far-fetched to imply that this would amount to even a euro zone superstate given that, in the same breath, the presidents say “this would not mean centralisation of all aspects of revenue and expenditure policy”.

Johnson says we won’t be able to avoid a superstate because the Five Presidents are also calling for a “deepening of the single market”. He says: “They want to harmonise insolvency law, company law, property rights, social security systems – and there is no way the UK can be unaffected by this process.”

Johnson is correct that the Five Presidents want a deeper single market. But this is something we should celebrate, not fear. British governments have been pushing for this for decades. Even Johnson, as recently as February, was singing the single market’s praises.

The current single market is optimised for goods, where Germany excels. Deepening the single market would optimise it also for services, capital markets and the internet – where we excel. If we quit the EU, we will miss out on these opportunities.

Indeed, three of Johnson’s four specific bugbears – insolvency law, company law and property rights – are mentioned by the Five Presidents as part of the creation of a capital markets union, which is being pushed by our own commissioner, Jonathan Hill. To the extent that the EU embraces capital markets, the City – and by extension, London and the UK as a whole – will be the big winner.

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    Meanwhile, Johnson’s other bugbear – better coordination of social security systems – relates explicitly to the euro zone. Since we are not in it, we wouldn’t be affected by this proposal.

    Johnson should be more confident in the UK’s ability to swim against what he sees as a federalist tide. The UK has already demonstrated that it can stay out of aspects of the EU it dislikes. It is not party to the euro or the Schengen passport-free travel area and has opted out of parts of the EU’s Working Time Directive.

    The Five Presidents also advocate more efficient labour markets and greater competitiveness in order to help the euro zone flourish. We wouldn’t be directly affected, but we would definitely benefit indirectly.

    What Johnson doesn’t say is that there is no guarantee that the Five Presidents will get their way. While lots of euro countries do want fiscal union, they differ on what form it would take. For the Germans, it means more discipline. For the Italians, it means less austerity and more job creation.

    It’s because of these wildly divergent views that the Five Presidents’ Report is now gathering dust. It merited just two non-committal paragraphs in the communique at last December’s summit of EU leaders.

    Of course, it is possible that the leaders will eventually overcome their differences and push ahead with some form of fiscal union. Johnson is right, too, that David Cameron has promised not to create obstacles to such a move as part of his renegotiation of Britain’s relationship with the EU. This was a mistake, as he gave this assurance without knowing precisely what, if anything, the euro zone may propose.

    But, in return, we got commitments that the euro zone will not discriminate against the UK and a pledge that the EU treaty clause calling for “ever closer union among the peoples of Europe” will not apply to us. These provisions – along with our existing opt-out from the single currency – protect us from the bogeyman of an EU superstate.

    This article is adapted from a piece that previously appeared on InFacts

    This article was updated on April 25, with a new headline and mention of Michael Gove’s position.

    Hugo Dixon is the author of The In/Out Question: Why Britain should stay in the EU and fight to make it better. Available here for £5 (paperback), £2.50 (e-book)

    Edited by Sam Ashworth-Hayes

    3 Responses to “5 Presidents won’t drag UK into EU superstate”

    • I seem to recall that those in favour of joining a common market said that a European union wasn’t going to happen.
      Fool me once, shame on you. Fool me twice shame on me.

    • Dear InFacts team, I admire and appreciate your work, and I hope it will pay off in the end.

      There is another myth that’s being advanced by the Brexit campaign, however, which needs to be debunked quickly, namely that of a cabal of the “five (unelected) presidents” of the EU.

      The EU doesn’t have a presidency and certainly not five presidents (comparable to the French or US presidents).

      The “Five presidents” are:

      1) The “president” of the European Commission, who is directly and indirectly elected, with term limits in place. The UK equivalent is the Cabinet Secretary (appointed, not elected).

      2) The “president” of the EU parliament. UK equivalent: The Speaker of the Commons. Both are elected by their respective parliaments.

      3) The “president” of the ECB. UK equivalent: The Governor of the “Bank of England” (not the “Bank of the United Kingdom”!). The ECB president is being appointed following a vote in the European Council. The Governor of the Bank of England is an appointed civil servant and takes orders from the government, whereas the ECB president is independent, because the ECB is independent from governments or the EU’s political bodies (for good reasons).

      4) The “president” of the Euro group. This is simply the chairman of the FinMins of the Euro group, without any significant power. Elected by the FinMins and without any significance to the UK.

      5) The “President of the European Council”. This is a fairly new office with no clearly outlined competences or powers. Whatever this “president” does, he’s accountable to the European Council (elected), and there are term limits in place.

    • What was also missed off was the 4 new countries poised to join the EU – Montenegro, Kosova, Bosnia HG and Serbia.
      The average unemployment rate in those countries varies from 26.5 to 33.5%
      TTIP was also not mentioned
      Neither was the EU defence force or UN Security Council seats (at the probable expense of France and UK)
      There is so much information / dis-information – it almost seems to be done on purpose by both sides.
      Too late now and too far gone – going back in – they would walk all over us as they have done in the ‘deal’ that the UK Govt has.
      Reluctantly – we are out but this is the only option I think.