Is the

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Is the awkward partner about to leave the EU?
The UKs relationship with the EU

• Mike Walsh
• Economics Academic Course Director
• Coventry University
• Ref UK EU relationship March 2013

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(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

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UK attitudes

• These help explain the UKs relationship with the
  EU. Generally, the UK
• Is pragmatic
• Believes in free markets
• Doesnt 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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(2) UK and Europe The early years
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1945-57 Preparation

• Positions of countries
• UK
• 3 circles
• UK condescending?
• intergovernmental approach ok

Empire
USA
Europe
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• France
• wanted decline in German industrial power
• Germany
• wanted acceptance

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European Coal Steel Community (ECSC)

• Schuman Plan (9th May1950)
• Monnets ideas
• sectoral approach
• Iron steel major sector
• France - Germany
• ECSC
• Treaty of Paris 1951 - est. 1952
• 6 members
• Supranational from beginning
• UK not want to give up sovereignty

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ECSC to EEC

• Messina (1955)
• Extend Benelux model (Spaak)
• Atomic energy cooperation (Monnet)
• UK position dont get involved
• Treaty of Rome 1957 (effective 1958)
• EEC Treaty
• Euratom Treaty
• UK dont get involved

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EEC Take off and early progress (1958-72)

• 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

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(3) UK The EU Budget

• A major issue for 40 years

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Budget 2013
Cohesion
CAP
Rural development
Competitiveness
Admin
Security justice
External Relations
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• 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
  1970s
• Reasons
• CAP
• Common external tariff (CET)
• Conflicts

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

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

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• 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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• Budget issues still exist today
• David Cameron (UK PM) in EU budget talks
• 2011 Opposed large increase in EU budget
• http//www.bbc.co.uk/news/world-europe-11652601
• 2012/13 Opposes real increase in EU budget for
  2014-20 Financial Perspective
• Budget rebate AGAIN

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(4) Economic and Monetary Union (EMU)
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• 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
• http//news.bbc.co.uk/player/nol/newsid_6560000/ne
  wsid_6563000/6563031.stm?bwbbmpwmnews1bbcws
  1

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• 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

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(5) Social Policy
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• 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

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• 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

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

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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?

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(6) What does the UK want from the EU?
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Free Trade

• Access to the SINGLE MARKET
• Very Anglo Saxon

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• 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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(7) UK Even more awkward?

• Exit?

David Camerons Europe Speech January 2013
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• 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?

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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?

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UK in Europe
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(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

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References

• S George, An Awkward Partner Britain in the
  European community
• R Baldwin C Wyplosz, The Economics of European
  Integration
• http//europa.eu/