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Is the ‘awkward partner’ about to leave the EU? The UK’s relationship with the EU Mike Walsh Economics Academic Course Director Coventry University Ref:

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Presentation on theme: "Is the ‘awkward partner’ about to leave the EU? The UK’s relationship with the EU Mike Walsh Economics Academic Course Director Coventry University Ref:"— Presentation transcript:

1 Is the ‘awkward partner’ about to leave the EU? The UK’s relationship with the EU Mike Walsh Economics Academic Course Director Coventry University Ref: UK EU relationship March 2013

2 (1) Introduction The UK joined the EEC (EU from 1993) in 1973 Late: over 20 years after the EEC was formed! Within a year the UK had built up a reputation for being the ‘awkward partner’ ( George S, 1998) – opposed many EEC initiatives – took an independent view – was disruptive We will consider why the UK was considered to be the ‘awkward partner’ and why EU exit is on the agenda

3 UK attitudes These help explain the UK’s relationship with the EU. Generally, the UK : – Is pragmatic – Believes in free markets – Doesn’t want to give up sovereignty – Wants widening of EU – Wants less integration. No federalism Relevant today – Gordon BROWN (PM) signing Lisbon Treaty 2007 – EU splits some UK political parties

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5 (2) UK and Europe: The early years

6 : Preparation Positions of countries – UK 3 circles UK condescending? intergovernmental approach ok USA Empire Europe

7 – France wanted decline in German industrial power – Germany wanted acceptance

8 European Coal & Steel Community (ECSC) Schuman Plan (9th May1950) – Monnet’s ideas sectoral approach – Iron & steel major sector – France - Germany ECSC – Treaty of Paris est – 6 members – Supranational from beginning UK not want to give up sovereignty

9 ECSC to EEC Messina (1955) – Extend Benelux model (Spaak) – Atomic energy cooperation (Monnet) – UK position: don’t get involved Treaty of Rome 1957 (effective 1958) – EEC Treaty – Euratom Treaty UK: don’t get involved

10 EEC Take off and early progress ( ) EEC economic success EFTA (1960) – EEC Rival – Included UK France vetoes UK entry to EEC Finally, success – Hague Summit 1969 – Agreement for UK to join the EEC – UK joined 1/1/73

11 (3) UK & The EU Budget A major issue for 40 years

12 Budget 2013 CAP Cohesion Competitiveness Rural development Admin External Relations Security & justice

13 1st EU enlargement 1973 UK rebate: major issue UK disruptive – Veto in Council Of Ministers (pre SEA 1986) UK major contributor but one of poorest states in 1970’s – Reasons CAP Common external tariff (CET) – Conflicts

14 High CAP expenditure (% budget share) when UK joined EEC in 1973

15 Fontainebleu Summit 1984 UK rebate UK rebate issue resurfaced 1998 onwards

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17 2005: Blair wanted CAP reform in return for UK giving up budget rebate UK & France fall out! Outcome: UK gives up some of rebate – With conditions

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20 Budget issues still exist today – David Cameron (UK PM) in EU budget talks – 2011: Opposed large increase in EU budget 2012/13: Opposes real increase in EU budget for Financial Perspective Budget rebate AGAIN

21 (4) Economic and Monetary Union (EMU)

22 Monetary union ‘’launched’' 1979 – European Monetary System EMS EMS - 2 components – European currency unit (Ecu) – Exchange rate mechanism (ERM) 8/9 countries NOT UK UK eventually joined 1990 BUT, UK exit 1992 September 1992 ‘ERM crisis’

23 Maastricht Treaty 1991 – UK & Denmark opt out of Euro – Only countries to do so UK set 5 economic tests for joining – Failed 4 out of 5 (2003) – Political device, not economic

24 (5) Social Policy

25 UK generally believe in free markets, laissez faire – ‘Anglo Saxon’ approach – European interference in labour market – Social Policy raises costs for firms & makes them uncompetitive – E.g. Working Time Directive

26 Approaches by selected countries below – UK, Ireland – free market – Germany, Benelux countries– collective bargaining provides worker protection – France, Spain, Portugal, Greece- statutory framework to protect workers rights as weak collective bargaining

27 Social Charter 1989 – Social policy expanded – not legally binding – opt out by… Maastricht Treaty – Binding on EU States – Opt out by……

28 Answer these questions relating to Spain Is it easy for a firm to make a worker redundant? How much social tax (%) does a firm pay on wages How many days holiday does the average worker receive? Do you think working more than 48 hours / week is ok? If you lose your job what benefits can you receive?

29 (6) What does the UK want from the EU?

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31 Free Trade Access to the SINGLE MARKET Very ‘Anglo Saxon’

32 Single European Act (SEA) 1986 All trade barriers to be eliminated Aims include – Bigger markets for firms – Increase efficiency of firms – Aid integration – Benefit consumers Generally regarded as successful

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34 (7) UK: Even more awkward? Exit? David Cameron’s Europe Speech January 2013

35 UK renegotiate with EU? – ‘cherry pick’ policies – Drop which policies? – UK want which policies? Hold referendum to leave EU in 2018 if renegotiation fails Why?

36 Options if UK leave EU? Renegotiate agreements with EU? – Like Switzerland – About 200 bilateral agreements Join EEA? – Access to single market – Like Norway Be like rest of world? Scotland?

37 UK in Europe

38 (8) Conclusion After 40 years membership Europe still divides UK opinion & splits political parties UKIP is a new anti-EU party UK is still the awkward partner

39 References S George, ‘An Awkward Partner: Britain in the European community’ R Baldwin & C Wyplosz, ‘The Economics of European Integration’


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