The Financial Times Makes A Worryingly Stupid Cheerleader For The EU

A company logo hangs on the headquarters of the Financial Times newspaper in London

The slavishly pro-EU Financial Times often displays a childlike level of understanding of how the European Union – and global regulation – actually works

Apparently the arguments for Brexit “do not add up”.

We have this from the most scrupulous and unbiased of sources, the Financial Times, so of course it must be true. Millions of Brexiteers, The Leave Alliance and little old me can pack up our things and go home, because Martin Wolf of the Financial Times has spoken.

Except that when Martin Wolf speaks on the topic of the European Union, he sounds like an idiot. This is his opening gambit:

If the UK voted to leave the EU, it would almost certainly be outside the arrangement organising the life of our neighbours and principal economic partners forever. Given this, the question is whether the option to leave should be exercised now. My answer is: absolutely not. To see why, let us examine popular arguments in favour of departure.

Oh dear. In his first sentence, Wolf inadvertently describes the overwhelming case for Brexit, before he can even launch in to his promised list of ten rebuttals. For he says that the EU is an organisation which seeks to “organis[e] the life of our neighbours and principal economic partners” – and indeed ourselves, since we are part of the union, too.

This is refreshingly honest, albeit unwittingly so. The EU does indeed seek to organise not only the lives of our neighbours and trading partners at the nation state level, but crucially (and most offensively) at the level of the private citizen too. Why? Because the EU does not see itself as some kind of a trading club. It sees itself as a government of Europe, sitting above national governments but gradually rendering them obsolete and irrelevant. The EU makes no secret of this fact – it is enshrined in the treaties, quotes from senior EU officials and even emblazoned on the wall of the European Parliament Visitors’ Centre, for those who care to look. It is only here in Britain where politicians and assorted EU apologists bury their heads in the sand and lie to themselves (and to us) about the real purpose of the European Union.

So Martin Wolf is quite correct – if Britain leaves the EU, we will absolutely be outside the arrangement which seeks to organise the lives of 500 million European citizens from every single member state. Power will be brought one step closer back to the individual citizen. And the fact that Martin Wolf and the Financial Times see this as a bad thing – that they visibly recoil from the idea that Britain should shed a superfluous layer of supranational government and seek to return power to the people – really tells you everything you need to know about whose side they are on. Hint: it is not the side of we the people.

The article then lurches from bad to worse, with a series of “rebuttals” of the Brexit case each one less supportable than the next. We are assured, for example, that a politically integrated eurozone is unlikely, despite the European Union doing everything but spell out in fireworks their intention to do exactly that.

Some of Wolf’s later points – particularly around immigration and trade agreements – are slightly more accurate. But this is only because he is creating straw man arguments to demolish, aided in his efforts by the hapless official Vote Leave campaign. The various spokespeople and figureheads of Vote Leave say enough stupid things between them to enable Martin Wolf to publish a ten point anti-Brexit rebuttal every day from now until polling day, but that is very different from Wolf managing to disprove or discredit the core arguments in favour of Brexit, most of which he pointedly skirts around.

Specifically, Martin Wolf never appears more out of his depth than when he attempts to show that there is no natural positive alternative to EU membership, and when he attempts to discredit the Norway (EFTA/EEA) option as an interim step. Thus we get utter bilge like this:

Seventh, it would be easy to agree on alternatives to EU membership. Yet those recommending leaving have no agreed position. There are three plausible alternatives: full departure with trade regulated by the World Trade Organisation, which would cost the UK its preferential market access to the EU; Swiss-style membership of a trade arrangement in goods, with bilateral deals in other areas, which is complex and would require the UK to retain free movement of people; and Norwegian-style membership of the European Economic Area, giving full access (except for having to abide by rules of origin in trade in goods) but would deprive the UK of a say on regulations. In all, the more sovereignty the UK wishes to regain, the less preferential access it retains. This trade-off cannot be fudged.

Enter Pete North, with a forensic and merciless dissection of Wolf’s position that genuinely make one wonder how it can be that North is the amateur blogger and Wolf the supposedly prestigious journalist.

North responds:

Wolf says that “There are three plausible alternatives”. This is where we are in straw man territory. He cites the WTO option which does not in any way address the multiple cooperation agreements or issues surrounding non-tariff barriers and in fact would likely cause asymmetric tariffs in the EU’s favour. If Wolf was a halfway credible analyst he would know that much. It’s a non-starter and would in fact case the very chaos that remainers have been talking up. So we are back to the age old question. Ignorance, dishonesty or both?

This means of exit is commonly associated with unilateral withdrawal, which no government intends to do nor would even consider it when faced with the practical ramifications. And so we can say with absolute certainty that we are looking at a negotiated exit.

With regard to the Swiss Option, comprising of membership of a trade arrangement in goods, with bilateral deals in other areas, Wolf is right to say it is “complex” and given that we have only two years under Article 50 to negotiate a settlement, we can safely assume that a bespoke deal is not on the cards. Talks may be extended but the tolerance for uncertainty will be short. Any UK government entering negotiations would rapidly be disabused of any fanciful notions of recreating the relationship from the ground up.

So actually, an off the shelf agreement based on the EEA is looking the most probable exit means and since it is the least disruptive for both parties and the most achievable, that is most likely what will be asked for and the only thing on offer. Having done a scoping exercise in advance of submitting our Article 50 notification, we can say with some confidence that a transitional deal could be arranged inside the mandated two years. To ensure it does not drag on, we will in all likelihood adopt most of the existing cooperation agreements as they are without opening them up fro scrutiny. We will swallow the lot. Wolf has it that the UK would have to retain free movement of people membership of the European Economic Area, which is true, but actually irrelevant.

At the end of negotiations what we end up with is more or less the same access to the single market and no real changes in the business environment. Cooperation agreements continue as before and nothing looks that much different on day one. This renders much of the speculation about Brexit entirely redundant. Wolf as much admits this.

Having taken Wolf to school on the fundamental about the most likely future model for UK-EU relations, North goes on to destroy Wolf’s fatuous but oft-repeated claim that an interim EEA/EFTA solution somehow means having no “say in regulations”:

In any area of regulation you care to look, the EU is a recipient of rules as much as anybody else. Its rules are subordinate to global standards and such standards from the basis of nearly all new EU technical regulation. Brexit not only gives us a right of opt out at the WTO/UNECE level, we would also enjoy EU consultation before any rules went as far as the EU parliament for what they laughingly call scrutiny. What that means is we will never again see the EU abusing its power to foist rules on us that we do not want.

Wolf is right however when he says that there are trade-offs. Asserting sovereignty in regulatory areas does have trade-offs. Because Norway has heavy protections on its own aquaculture and agriculture it is subject to tariffs. It remains that way because that is what Norway chooses to do. Their parliament examined the balance of issues and decided on a case by case basis whether the trade off was worth it. In more areas than one, Norway has concluded that sovereignty matters more. This would be that democracy thing. And the whole point of Brexit as it happens.

And while the regulatory regime doesn’t change that much, it does mean that we are free to change it where we deem change is appropriate. It categorically does not mean a huge administrative undertaking to establish a separate regulatory system. All it means is we can change it as and when we want to – and when we want regulatory reform, we have a direct line to the global bodies that make the rules rather than having the EU speak on our behalf. The clout we have in that regard in on the basis of what we bring to the table in terms of soft power and expertise which is considerable when you consider the UK’s many assets.

[..] The dinosaur hacks of the FT are fixated on “free trade deals”, many of which are not actually that useful to UK industry and we would benefit more from independent participation on global forums to remove technical barriers to trade. In that respect the traditional bilateral trade deal (or FTA as they insist on calling them) is obsolete. The future is the development of common regulatory frameworks that extend far beyond the confines of little Europe. Being independent of the EU ensures that we put the brake on the EU’s gold plating tendency while having first dibs in the global arena.

In so many ways, Brexit gives us the best of both worlds. The continuity of single market access along with trading agility, free association with global alliances and a functioning veto. All we get from the europhiles is that we can’t have our cake and eat it. It turns out we can eat the cake and ask for seconds if we so choose.

I cannot repeat this often enough: if you want sound analysis of the EU referendum question and an informed understanding what Brexit might look like, it is absolutely no good turning to the legacy media. They simply do not know what they are talking about because they have not invested the time to think through the issues clearly or to update their 1990s-era understanding of global trade and regulation. Worse still, they lack the humility to learn from those who have invested time and do know.

Martin Wolf airily tries to dismiss Brexit as a leap into the unknown, claiming that leaving the EU would entail moving toward one of three unpalatable future relationships, when it actually turns out that there is only one likely future model Brexit state given the political and economic constraints faced by both parties, and that one model preserves the single market access about which the FT and others rightly fret while extricating us from the unwanted political union.

Worse still, Wolf compounds his error by lazily asserting that this “cake and second helpings option” (as North puts it) would mean Britain having no say when it comes to shaping regulations, when in fact it is only by leaving the European Union that we are able to restore our voice at the real “top tables” where the rules are made.

We are now presented with a rather difficult set of possibilities. Either:

1. Martin Wolf and the Financial Times are so thoroughly incompetent and lacking in knowledge about one of the very subjects for which readers pay them for their expertise, or

2. Martin Wolf and the Financial Times do understand how global trade works and the true nature of the European Union, but deliberately keep this information from their own readers for some other sinister purpose (most likely because their corporate readership balks at the increased economic risk which inevitably accompanies any great enterprise worth undertaking – like Brexit)

Incompetence or malevolence. Pick your poison, but the Financial Times is undoubtedly guilty of at least one of these offences, if not both.


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2 thoughts on “The Financial Times Makes A Worryingly Stupid Cheerleader For The EU

  1. Gail Vickery April 28, 2016 / 6:18 AM

    Another great article Sam! I do wish we could get these articles out in the public domain! I am trying by speaking to literally everybody I meet, friends family and strangers alike. It is frightening how little actual knowledge is out there. People are at last beginning to ask questions, which is a good thing, but there is also so much ignorance! My rather elderly neighbour actually said recently when we were discussing the problems that imigration is bringing to every aspect of our ordinary lives, in schools, hospitals, doctors waiting rooms, low paid jobs etc! that at least David Cameron has now stopped immigrants receiving tax credits for four years after their arrival!! I’m afraid that Mr and Mrs average man in the street do actually believe his lies!!.
    Sorry I haven’t replied to your articles lately, but I have been rather busy for the last 10 days! I am now on holiday in Amalfi Italy! (so plenty of time to read up on all the latest articles, news etc, and well away from the biased BBC – except I do like Laura Kuhnsberg – sorry about the spelling Laura!)If people really want to see what the EU is doing to its members, you only have to look at poor Italy! This is my first visit for 10 years, and the deterioration in their infrastructure is very sad! Even in areas like Amalfi Coast which you might expect to be better than most, the poor living conditions, houses, shops etc are crumbling!! Can’t be much better than Greece!!


  2. Ukoto April 28, 2016 / 1:58 AM

    It’s quite simple really – Wolf is a socialist who passionately believes in a nanny state and is mistrustful of democracy – he is also an economist, nearly all of whom treat the complicated human beings as completely fungible in the same way as widgets or IC chips and who have a cloth ear for different languages, culture, shared history and stage of economic development. In sum, he’s a Useful Idiot. Unfortunately, most institutions in the UK have been infiltrated by them and they’re harder to get rid of than barnacles off a careened yacht.


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