“The EU needs us more than we need them!” No, not even close

March 12, 2018

by Martin Odoni

Brexiteers, as I pointed out at the weekend, are still reciting a lot of empty old myths about the United Kingdom’s relationship with the European Union. Perhaps the most intractable of these ideas is that, when the UK leaves the EU next year, the EU will be the body that suffers the most from it. “They need us more than we need them!” is the routine chorus of people whose patriotic arrogance is obviously far greater than their actual knowledge.

We need to put a stop to this unthinking slogan, not just because it is mechanically recited without analysis, but because it is simply untrue. It seems to be founded on the benighted near-lie on the ‘Brexit bus’ about the UK sending £350 million per week to Brussels. The naivety of people who continue pointing to this membership fee is maddeningly narrow-sighted. They speak of it with great anger, not only ignoring the very large rebate the UK receives, but also seemingly assuming that it is the only monetary transaction that passes between the country and the Union. It is a nonsense assumption, missing far more than it sees.

£350 million diverted from the EU to the NHS is even more of a horlicks than you might think.

When we leave the EU, we will not get £350 million more, or even £190 million more. The money only reaches us because we are in the EU in the first place.

The EU’s putative ‘greater need’ than the UK’s is not merely untrue, it is obviously untrue due to the relative sizes of the two markets – 65 million in the UK, completely dwarfed by about 443 million in the rest of the EU. Now, there is a modest possibility that the EU will break up at some point in the relatively near future, but if it does, it will be for reasons of political instability, not due to financial damage caused by the loss of the UK.

The UK accounts for about seventeen per cent of the EU’s market activity. Much of it will go on ‘Brexit Day’ next year. That will certainly be a very significant loss, and it will be painful for the Union when it happens. But to suggest that it will harm the EU more than it harms the UK is to ignore realities of the benefits going the other way.

EU manufacturers account for about fifty-four percent of British imports. If the UK fails to get a favourable new trade deal out of the EU by October – and the hopes of a deal look increasingly forlorn in the current chaos of the negotiation process – there will be World Trade Organisation tariffs and barriers put in the way, which are bound to make such imports far more expensive and significantly less plentiful. Moreover, the UK’s exports will be brutally injured in the same way, as up to forty-three percent of them go to the EU (probably rather less in practice, taking into account the so-called ‘Rotterdam effect‘).

Further, the tightened rules on many extra-EU trading treaties, should there be attempts to emulate them, will make it a lot more difficult for the UK to continue some of its long-running manufacturing false pretenses. In particular, while in the EU, the UK currently massages its export statistics by including many goods that are not really made here. It is unlikely to get away with that nearly as much in one-to-one trading arrangements with other countries. Balance-of-trade will suffer as a consequence.

To summarise, more than half of British imports will become harder and more expensive to procure, while nearly half of British exports will become more expensive to sell and therefore less attractive to customers abroad. That loss compares most unfavourably with less than one-fifth of EU market activity being negatively-affected.

Once again, it brings me no pleasure to say it, but realities must be faced; while it will probably break a bone in the EU skeleton, Brexit will shear a limb or two off of the UK’s economic body.

The British boast that “the EU needs us more than we need it” is an outrageous fantasy, a macho, jingoistic pretense. It is also tragically ironic. Many of the people saying it – implying that the UK will simply walk all over the EU and force it to hand over everything that Westminster wants – are the same people complaining that the EU is ‘bullying’ the British in negotiations (when all Michel Barnier is really doing is refusing to co-operate with unreasonable demands or lily-livered time-wasting). Neither side is bullying the other in reality, despite British attempts to do so, but it is amazing that the people peddling these fictions manage to believe that both are true simultaneously while failing to see the absurd contradiction.

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Once again, the country needs people who think with their heads, not with their hearts, if it is to come through Brexit in reasonable health.

Where are they?

One Response to ““The EU needs us more than we need them!” No, not even close”

  1. jaynel62 Says:

    In response to your closing query – I’m sure we both agree NOT in Government (or perhaps even in Parliament). Sadly says even more about UK


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