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Liberalising the European Union

May 31st, 2013 Posted in Uncategorized by

A recent item at this blog posted by Editor, ‘EU-it really is getting sillier by the day’, refers to the attempt at an EU ban on serving olive oil in restaurants except in packaged bottles, and the reversal of this idea of by the Commission. While I think the item makes a very good point about the persistence of over-regulation by the EU, and proposals which rightly attract public ridicule, the headline at least was a bit harsh. After all the ban was reversed by the Commission. This reality also undermines the image of the EU as driven by out of control bureaucrats in the Commission dreaming up bizarre projects for an over centralised and over regulated Union. The post hints at, but does not quite reveal, the economic interests behind the proposal. It was driven by big olive oil producers in southern Europe, who claim to be ‘maintaining standards’. By extraordinary coincidence ‘maintaining standards’ in this case would have the effect of driving out competition by small scale ‘artisanal’ producers, who would find the cost of the required packaging less easy to bear than big producers.

The point here is not just that the EU often falls prey to this kind of attempted manipulation by sectional economic interests, but that regulation in the nation states of the EU, and nations all over the world, is driven by this kind of distortion of decision making through sectional interests able to undermine the common good, including that central good of depoliticised open competitive markets. The proposed olive oil in restaurants regulation was pushed by national governments in those EY countries which are large scale olive oil producers, and the political process is under the influence of the major producers in that sector. The liberal reform of the EU must include very strong, clear and enforceble measures against these forces which ravage all countries, and which are particularly necessary in the EU because it has failed to create a political system, on the whole that can resist the EU being defined by vulnerability to such forces.

As the original post points out, the Liberal Democrats, have been long term supporters of the EU, leaving open the question of what attitude the Liberal Democrats should have now, and what contribution Liberal Vision should have to make to debate on the matter. I’m sure there are differences of opinion within the Liberal Vision group on this, but we have overall taken the line of supporting a political union of European nations while questioning the form it should take. Some LV people present and past (before passing onto non-party political roles)have been deeply involved in the European Movement, and I did a few very minor things within EM and the Liberal Democrat European Group myself before I became an ex-pat academic in Istanbul.

My proposal is that we should stick to the policy of political union, but separate ourselves very clearly from the administrative centralism which is supported by the mainstream pro-EU groups. Of course the people concerned do not describe themselves in that way, but the reality is that their default attitude is to support any centralising measure, and to dismiss any  and all opposition and criticism, as populism coming from the fringe of the left or the right. The Euro crisis has dampened such attitudes, but they will keep coming back, and we should contest them. What we should aim for is clear but limited political union, a form of federalism but emphasising that federalism limits the power of the centre, We should aim for a limited number of areas of EU legislation and action, which are done well but kept within limits. I will list a series of proposals which I hope will be of interest to those who want a European political union without the drift to regulatory bloat and grandiose projects adopted regardless of the risk and the downside.

1. More of a role for national parliaments. Maybe a minimum number of national parliaments to give assent before legislation is passed.

2. All areas of EU legislation to be jointly legislated by the European Parliament and the Council of Ministers. A very easy to understand procedure to be adopted for how this works.

3. Abolition of the European Council, a deeply absurd addition to the EU institutions.

4. Abolition of the Commission, its best employees to be redeployed as EU civil servants.

5. Formation of a European government (probably with some less provocative name) on a roughly Swiss model, that is ministers from the main political groups in the European Parliament in accordance with representation in the EP. The idea of national style competition between political blocs across the EU has it charms, but is unrealistic for reasons which include linguistic differences and differences between national parties within the European ‘parties’. These considerations should be considered as fatal for any idea of  directly elected president of the EU.

6. Some form or EU basic law, or constitution (maybe with a less provocative name), designed to limit powers. Strong institutional arrangements to enforce limits on powers, and prevent centralist drift. This can be very difficult as US experience shows, but let the EU adopt more and stronger measures to prevent such drift.

7. A completion of the internal market to eliminate all barriers to trade, particularly with regard to contracting out of public services and cross border entry into ‘professional’ and ‘skilled employment’. The least onerous regulations of any nation to be the de facto regulation across all nations.

8. Internal market to be accompanied by equivalent (or near as possible) opening up to non-EU competition. Maybe there should be a law to bring this in within 10 years.

9. Tax competition to be allowed and encouraged.

10. The Euro, if it survives and I presume it will, to be optional for new EU countries, and to be based on a relatively clear set of enforceable restraints on debts and borrowing, and bail out conditions, with a presumption against bail out of private financial institutions, except as a genuine last resort.

10. Other big European projects, to be based on opt ins and coalitions of willing governments, not enforced uniformity.

11. Laws and institutions to be based on restraint of new regulations, with very robust tests regarding economic costs, before formulation, and certainly before enactment.

I do not make any claim to expertise on EU institutions and I recognise that not all the above are easy to combine. However, discussion of the EU has too long been the preserve of a few who understand its structures, and all political associations have some tensions within their institutions and constitutional arrangements. In any case, I offer these proposals as a stimulation to discussion, not as a prediction of where the EU is going.

9 Responses to “Liberalising the European Union”

  1. Richard Says:

    And I thought Liberals favoured decentralising power. Yet here you call for a political union.


  2. Barry Stocker Says:

    Richard the EU is a political union already, and I’m recommending reducing the powers of the centre. Frankly your comment makes no contribution whatsoever to any debate. In any case, it is completely false to say that liberals only recommend decentralisation. If that was the case liberalism would just mean anarchism, i.e. the abolition of all state authority. Clearly liberalism is not the same thing as anarchism, and clearly liberals look for varying mixtures of centralisaitıon and decentralisation, debating the right mix, so again your comment makes no sense and contributes nothing to any debate.


  3. Richard Says:

    Why does the centre have to be at a European level though? I just find it interesting that most libertarians/classical liberals I come across are not very keen on the EU yet Liberal Vision takes the opposite approach.

    The higher up power is centralised, the less control people lower down the chain have. It’s much harder to reduce the power of the centre if the centre is further away from you.


  4. Barry Stocker Says:

    The existence of a political union assists in the enforcement of laws regarding free trade as Adam Smith and other Scottish Enlightenment liberals recognised with regard to union between Scotland and England, the erosion of old local restraints on free trade between localities and in Adam Smith’s case with regard to the free trade benefits of continent wide ‘empires’. It also lessens the risk of violence within that union, which is Germany and France wished to form such a union after WWII, beginning through an iron and steel trade union with a central authority

    The logic you are employing is still that the higher central authority must be bad from a liberal point of view, which still leaves a logic in which still authority should be abolished above the most local. Even from an anarchist point of view there could be a European union, presuming it was purely voluntary for individuals across Europe and did not prevent individuals from belonging to separate parallel law enforcement agencies.


  5. Richard Says:

    Why do there need to be laws to enforce free trade? If nations believe in free trade they simply have to abolish their own tariffs. If they do not wish to then why should they be compelled to? Let them suffer the error of their ways. At the moment the EU compels us to put tariffs on goods from outside the EU. If we were free of the EU we could abolish all tariffs and restrictions on trade. If the EU decided to put tariffs up against British goods they would simply be harming their own consumers.


  6. Barry Stocker Says:

    As a matter of practical reality states implement free trade more readily with countries with which they have other forms of association. Opposing the EU to some fantasy of countries with no tariffs whatsoever is just fantasy, as is the idea that the UK would implement such a policy if it left. The EU does not ‘compel’ countries, or do you think that the British government is compelling Leeds when it implements a policy less popular in Leeds than other places, for example? The EU is a voluntary association, countries are free to leave, if you volunteer to join an association you voluntarily accept its rules. It is complete rubbish to say that Britain would not be harmed by increased protectionism in the EU if we left, protectionism harms both sides and your failure to understand this is not at all encouraging.

    Do you have any answer to the point I have now made three times, that your arguments against the EU are all arguments against the existence of the nation state which freely make it up?


  7. Richard Says:

    “As a matter of practical reality states implement free trade more readily with countries with which they have other forms of association.”

    Didn’t stop Britain in the 19th century.

    “Opposing the EU to some fantasy of countries with no tariffs whatsoever is just fantasy, as is the idea that the UK would implement such a policy if it left.”

    It is even more fantastical to expect the EU to liberalise. At least if Britain left there would be fewer people to convince to introduce a policy of tariff reduction – nationwide rather than continent-wide. And if it turns out that British people don’t want free trade then so be it – that’s democracy.

    “The EU does not ‘compel’ countries, or do you think that the British government is compelling Leeds when it implements a policy less popular in Leeds than other places, for example?”

    Membership of the EU involves us being compelled to adopt the common external tariff. Not exactly a classically liberal idea is it? And yes, if the British government meddles in Leeds against the wishes of the people of Leeds then it is “compelling” Leeds. At least, however, the people of Leeds consider them part of the nation of Britain and are therefore more willing to tolerate policies they didn’t vote for. There is no common European identity no matter how much starry-eyed idealists may attempt to wish it into existence, hence why the British probably resent being outvoted by the French and Germans more than the people of Surrey resent being outvoted by the people of other English counties. That said though I can understand such resentment and believe it should be minimised, hence why I favour decentralising power downwards.

    “It is complete rubbish to say that Britain would not be harmed by increased protectionism in the EU if we left, protectionism harms both sides and your failure to understand this is not at all encouraging.”

    Please point out where in my post I said we would not be harmed by increased protectionism. I am well aware that leaving the EU will have economic downsides. I simply happen to believe that the upsides (including allowing us to deregulate and introduce a classically liberal political economy) would more than make up for the downsides. PS do you have any idea how pompous you sound? “Your failure to understand this is not at all encouraging.”

    “Do you have any answer to the point I have now made three times, that your arguments against the EU are all arguments against the existence of the nation state which freely make it up?”

    I am all in favour of decentralising power down to county level from nation state level or even further if possible. At the moment the nation state, for all its faults, commands a sense of loyalty that a European state does not. Therefore I can understand support for a common British army to defend the nation state. Apart from that though I wouldn’t want the British government doing much else.

    Perhaps you would now be so kind as to explain how it is easier to influence a government that is further away and persuade it to become more liberal, especially if it obtains support from a lot of nations less traditionally liberal than Britain?


  8. Barry Stocker Says:

    It’s a lot easier to influence a government if we belong to the relevant body.
    Britain’s 19th century free trade policies were pursued in the context of Empire and the Concert of Europe, co-operation between European nations which included interventions against the Ottoman Empire and the Kingdom of Naples.

    If you don’t like my tone, I suggest you seek a dialogue elsewhere. This discussion is closed as far as I am concerned. If you wish to have the last word in another diatribe, you are free to do so.


  9. Richard Says:

    “This discussion is closed as far as I am concerned. If you wish to have the last word in another diatribe, you are free to do so.”

    Am not sure why my response is considered a “diatribe” when all I have done is address your points and put forward my views. Granted my one comment about your tone might be considered a diatribe but it was simply one sentence and part of a much larger piece.


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