Boris’ latest scare tactic: EU superstate

by Hugo Dixon | 07.03.2016

Boris Johnson delights in accusing the Remain camp of “Project Fear”. But in his latest column for the Telegraph, the Mayor of London engages in his own bit of scaremongering: that Britain will be dragged “willy-nilly” into a European superstate if we stay in the EU.

Boris, who is one of my oldest and closest friends, points to the so-called Five Presidents’ Report – published last year by the European Commission President and the heads of four other EU bodies – as evidence for his prediction. He has misunderstood it.

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

The Mayor says we won’t be able to avoid a superstate because the Five Presidents are also calling for a “deepening of the [EU’s] 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.”

Boris 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 Boris, as recently as last month, 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 Boris’ 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. It’s odd that the Mayor of London doesn’t appreciate this.

Meanwhile, Boris’ 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.

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 impacted, but we’d sure as hell benefit indirectly.

What Boris 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 have different views about what that means. 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 languishing on the back burner. 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. Boris 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 eurozone may propose.

But the Mayor doesn’t mention that, 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 Boris’ bogeyman of an EU superstate.

This piece is being published simultaneously in The Telegraph.

Edited by Sam Ashworth-Hayes

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)

One Response to “Boris’ latest scare tactic: EU superstate”

  • I run a business and I can set up aa company in 5 minutes online for very little cost. If I’m in many European companies his costs 100s Euros and can take weeks or months.

    If I employ somebody here and hey don’t perform, I can remove them, by following a careful process, This can be very difficult in other EU countries.

    These are the sort of things were the EU could work to make trade easier and we should have not closer Union but an equally easy and common rules and ways of doing business. There is a common currency but software can easily handle this, the trickier things are not even being made simple in many countries.