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Europe - is it stay or is it go?

David Brooks  02.06.2016

Not long to the UK Referendum to remain in the EU or leave. Our essay looks at the back story.

Whichever route the voters choose could have an impact on marketing along with a lot of other things. In recent blogs we have looked at some key issues such as product specifications with regard to standards compliance, price models from inside or outside tariff barriers and what customers actually want from your product.

This blog takes a quick look at why Britain is often at odds with the EU and why our history and culture has taken us down another path. So are the politicians trying to fit a square peg into a round hole? Is Britain suited to the rather different aims and ambitions and attitudes of our continental neighbours in Europe, or should Britain return to what has worked so well in the past?

The UK is the world's 9th largest exporting economy  with the top destinations for UK  exports being, the USA ($51 billion), Germany ($46.5b), The Netherlands ($34.2b), Switzerland ($33.6 b) and France ($27 b). Interestingly the USA  is not a member of the EU  single market and the UK  does not have a trade agreement with the USA either.  Switzerland is not in the EU either  but ranks highly in global indexes of top performing economies, especially in terms of freedom and economic innovation. Arguably the Netherlands is over stated due to the way the EU counts goods forwarded via Rotterdam port as exports from the UK and other European countries, whereas much is exported to the rest of the world. So although  the 'in' or 'out' decision might cause some re-arrangements of how the UK trades with other countries,  it unlikely to result in the total disaster the campaigners predict. The UK is 3rd biggest of Germany's export markets, selling more than twice as much to us as we sell to them. Not surprisingly Germany, France and the UK  are not only the EU's biggest economies, but the paymasters for the other 25 EU countries too. The EU's importance to UK trade is in decline and shrinking all the time, from 55% in 1999 to 44% last year and allowing for the Rotterdam figures probably under 40% and according to some studies less than before Britain joined in 1973.

Worryingly we see signs of civil unrest in both Germany, protesting about immigration and in France, protesting about some modest changes to labour laws. The violent street protests are disturbing to us, because by and large this is not the British way. The real issue for Europe now, is not how the UK will survive outside the EU, or more likely prosper, but what happens to the EU itself? And what if voters in Germany and France call a halt to supporting the rest of the member states and choose to exit as well? Without doubt there remain big cultural differences between our island race and the continentals. Britain's long existence as a maritime nation put us on a different path centuries ago. A direction that  promoted freedom, empowered merchant adventurers and the founding of colonies where trade followed the flag. By 1922 the 'Empire on which the sun never sets' ruled over one fifth of the world's population at that time and controlled around a quarter of the earth's total land mass. Although the Empire was largely dismantled by peaceful transition to local populations, the British had created and left a viable infra structure that included a democratic form of government, a professional civil service, legal systems, cities,  railways and ports and established English as the global language of business, not just in the legacy Commonwealth nations, but globally.

While Britain looked outwards to the world where trade flourished, the continent was going through often turbulent times. In England enterprising innovators and entrepreneurs had created the Industrial Revolution [between 1760 to 1840] which provided new forms of employment and churned out mass produced products to sell to a global, English speaking world. While England developed industry and trade, France embarked on bloody revolution, leading eventually to Napoleon and a military bid for domination of the continent. Dismissing the English as 'a nation of shop keepers', his ill fated bid for domination of the continent was to lead to his Waterloo. An ambition to somehow recreate the Holy Roman Empire was also taken up by the Kaiser and Hitler in due course. Britain largely took the line of helping maintain the balance of power on the continent, leaving Britain to rule and influence the rest of the world. The two world wars of the 20th Century seriously damaged both British and European economies, rebuilt with significant aid to Europe by the Americans after WW2. Britain too needed help to rebuild with much of its infra structure worn out from 6 intensive years of global war but the socialist government made things worse - even requiring food rationing. For the British people WW2  might have ended the long pre-war economic slump of the 1930's, the war itself and then the austerity of the early 1950's. With the 1960's came the dismantling of the British Empire.  Meanwhile  Germany boosted by Marshall Aid and with a new open approach to freedom and enterprise was enjoying an 'economic miracle'. The Suez Campaign of 1956 was a low point with Britain forced to concede to the American super power it had now become. The EEC suddenly began to look more interesting as a counter to the USA and USSR super powers, a replacement for the Empire and to hope some of the German economic miracle might rebuild Britain too.

At that time it was still rare for the average British citizen to travel to what was still known as the continent. Office worker and labourer alike opted for either a brash seaside resort such as Blackpool or the genteel pleasures of Eastbourne. Foreigners started across the English Channel, their water was apparently undrinkable, there were toilets in the streets and worst of all they spoke funny. General De Gaulle was the highest ranking French officer to escape the German invasion of France in May 1940 and while in London, Churchill kind of invented him and his trademark pillbox cap straight out of the Foreign Legion, as the Leader of the Free French, quite an elevation for a tank commander. But it was De Gaulle who went on to become President of France and in that role vetoed the British application to join the Common Market. His short tenure in London had given him sufficient insight into the British way of things to figure membership would not sit easily with the continental countries. The British who had ventured abroad were more likely to be on tour with a British Expeditionary Force to participate in the latest continental war. A war that gave rise to the term - 'Dunkirk Spirit'. So what's that all about then? Well, in the dark days of May to June 1940 the remnants of the once best equipped ever British Expeditionary Force was in retreat via the otherwise unremarkable channel port of Dunkirk. Most of the British Army and some French over 338,226 in all, were somehow spirited away by a flotilla of Navy vessels and best of all pleasure boats and cabin cruisers from the River Thames! All the while German Stuka dive bombers attacked and trashed Dunkirk. What was a massive defeat was somehow turned into victory by the British news services, survivors were welcomed home as heroes. And in almost the darkest hour the average Briton celebrated, not just the deliverance of our men, but the exit of the French from WW2.That was the origin of the 'Dunkirk Spirit.'

By the 1950's and into the 60's and 70's  trade unions run by old communists paralysed British industry with wave after wave of strikes, low productivity, under investment, over staffing and general industrial malaise. Eventually Ted Heath the UK  negotiator who carried on negotiating when everyone else had lost interest, signed the UK up to the Common Market. Stripped of major natural assets  such as the fish rich North Sea [oil and gas too it turned out later] , compelled to support inefficient European farmers, to introduce decimal money and adopt a huge raft of largely needless legislation it soon became apparent that this was a club we should never have joined. But around this time, cheap package holidays to Spain began to replace the dubious delights of Blackpool in August for the typical British worker. Cheap booze and fags, all day and all night drinking and better still - sunshine - proved more of a lure than the decaying former grandness of Britain's victorian resorts. Even better you could get a British Visitors Passport from the Post Office for a mere seven shillings and sixpence and collect 200 fags and a couple of bottles of spirits as you passed 'go' in the duty free shops. The Spanish resorts quickly adapted to the British preference for all day fried breakfasts, tea like mother makes and four ale bars. Sod the piers and Punch and Judy and the half built hotels when you could get drunk and sun burned for a few a Pesatas.

But by the time Margaret Thatcher swept into power, Britain had become the 'basket case' of Europe. Being members of what was becoming the EU, or European Project seemed to have done nothing to improve the decline. It took another war, this time in the remote Falkland Islands miles away in the South Atlantic which had been invaded by another soldier in fancy uniform, this time an Argentine. On the back of this offshore and even unlikely military success, the unions were taken on and defeated on the home front, lack lustre state businesses were privatised, restrictions were swept away, the economy turned round and the 'Iron Lady' turned her sights next on Brussels and the bureaucratic EU. She simply banged her handbag on a desk and demanded 'her money back' - well the British people's actually. It was probably the last good deal anyone from Britain ever did.

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