Former British Prime Minister Tony Blair defended the U.K.’s full participation in the EU from the most recent wave of Euroscepticism in a speech at Chatham House late last month. Conceding up front that the European social model needs reform to remain sustainable, an argument echoed by the moderate left in the U.S., Blair pushed back forcefully against current calls for the U.K. to take its abstention from the Euro one step further and leave the EU altogether. Blair shaped his defense as a rebranding of the EU’s mission away from securing political stability on the continent and toward increasing its leverage in determining the rules governing the global economy.
Europe is in its sixth full decade of relative political stability, and having achieved that original mandate the EU faces pressures to defend the reason for its existence in new ways. “Then it was peace,” Blair said, “Now it is power.” Having united to prevent war, Europe’s nations now must utilize the power of their union to ensure that the continent’s collective voice on trade policy and on regulatory issues like climate change carries a weight commensurate with its share of the global population. “As technology and capital become globally mobile,” Blair argued, “in time there will be a re-alignment of GDP and population i.e. the larger your population, the bigger your economy.” A U.K. that stood fully outside the EU would soon find itself poorer, less competitive, and with a diminished ability to shape its own economic destiny; withdrawal from the EU for reasons of sovereignty and the purpose of greater strength through independence would be self-defeating. Assuming the alignment of GDP and population that Blair envisions, staying within the EU keeps the U.K. within the top ranks of global powers. (According to Eurostat, as of 2010 the percentages of world population broke down like this: China 19.5%, India 17.8%, EU-27 7.3%, U.S. 4.5%).
Blair also discussed the importance of the proposed SSM – the “single supervisory mechanism” that would regulate banks across Europe – to the EU’s future competitiveness. (Nicholas Veron of The Peterson Institute and Bruegel presents a report on the development of the SSM this month, which I will discuss in a future post.) Much like the U.S., the EU is now a wealthy economic power in search of a sustainable budgetary and regulatory framework. Investor fears concerning the future of the U.S. and EU economies stem not from concerns about future economic capacity, but about political will. Can the continent’s leaders agree upon tax and regulatory regimes that will safeguard Europe’s economic prosperity as effectively as the previous generation of leaders guarded its security? Blair is advocating for a new generation of political commitment to the EU as a force for prosperity as strong as its initial commitment to Europe as a force for peace.
The New York Times reported more evidence to back up Blair’s concerns last week. A feature article on the surge in popularity of Nigel Farage’s long-standing efforts to extract Britain from the EU reinforces the concerns the former prime minister articulated. The EU’s future, like its founding, will be determined by the domestic debates in each member nation that balance the opposing forces of multilateralism and nationalism.
