IF THE UK GETS AN ACCEPTABLE EU DEAL, WILL IT STILL KEEP COMING BACK FOR MORE, EVERY TIME AN EU TREATY HAS TO BE REVISED IN FUTURE?

A “Daily Mail” poll,  last week, showed that, in a sudden change, 51% of UK voters now want to leave the EU, whereas 49% want to stay in.

This big change in opinion seems to be related to the refugee crisis, because the poll also shows voters strongly favour David Cameron’s unwillingness to accommodate large numbers of refugees as against Angela Merkel’s support for all EU countries accommodating a substantial quota.

This dramatic change in opinion shows how a referendum result on a particular day can turn on unexpected events, and how a permanent decision can be influenced by what may prove to be temporary phenomena

The UK already had a referendum on whether to stay in the EU in 1975.  Now it is to have another in 2017. But will this 2017 referendum settle the question?

Eurosceptics, like Nigel Farage, have welcomed the decision of David Cameron to change the wording of the question UK voters will be asked to decide on, from a “Yes” or “No” to UK membership, to one which asks whether UK voters want to “remain” in, or “leave”, the Union. 

This change was recommended to David Cameron by the Electoral Commission who felt the earlier formulation favoured those who wanted the UK to stay in the EU.

“Leave” implies action, “remain “could be construed as endorsing passivity.  “Yes” would have implied positivity, “No” negativity. Generally people prefer to be positive. So perhaps Nigel Farage is right to be happy.

The bigger risk here is not in the wording of the question. It is in the political reality  that, in a referendum, temporary considerations, like anger at some current government policy on an unrelated matter, may induce people to make a permanent decision that they would not make in normal circumstances.

That is why I prefer parliamentary democracy to referendum democracy. 

In a referendum, the issue has to be reduced to a single question decided on a single day. 

In the parliamentary system the decision is usually taken over many months, in a process which allows greater flexibility, and opportunities to change direction in light of what is learned. 

But a referendum is what we are going to have, so it behoves everyone in all the 28 EU countries to do what they can to ensure, if they want the UK to stay in the EU, that the negotiation is concluded in a way that presents the EU in the best possible light to the UK electorate.

The UK’s negotiating approach, and the frame of mind in which the UK people approach the negotiations, are important here too. If the UK gets a good deal, that is endorsed in a referendum, will UK citizens then fully commit to the EU, or will they retain an attitude of conditional and skeptical membership, waiting for the next opportunity to find fault?

In 2003, I was chairman of the committee of the Convention on the Future of Europe which dealt with Justice and Home Affairs.  Our task was to redraft the provisions of the EU Treaties dealing with cross border crimes. The UK had long been suspicious of continental courts having jurisdiction over UK citizens and wanted to limit EU activity in this field.

At each stage in the negotiation, the other parties to the negotiation went as far as they thought they could to accommodate UK concerns, only to find that once that was settled, the UK came back looking for more concessions on the same points.

The Convention’s “final” draft of the proposed EU Constitution, was not final. The UK looked for, and got, more concessions in the draft approved by the Heads of Government. 

Then, when the Constitution failed in referenda in France and the Netherlands, and was replaced by a slightly slimmed down “Treaty” in Lisbon, the UK looked for, and got, even more concessions on their concerns, including a complete opt out, with a right to opt in at will.

Will the other states go all the way to their bottom lines, in the negotiation of the “improved” terms of UK membership if they think the UK will adopt a similar tactic and keep coming back for more? They will ask themselves how an EU of 28 members would work, if every country that UK approach.

Suppose the final deal is one that satisfies UK voters by a narrow margin, will future UK governments then be likely to go on looking for further concessions afterwards, on the same issues, every time there have to be any further revisions of the EU Treaties? 

If the answer to these questions is yes, and there are many in the UK who will never be satisfied with what the EU offers, then the other 27 members may hold back from their maximum concession. 

David Cameron may then find he has raised expectations in the UK unduly, and may fail to convince UK voters to remain in the EU.

Or he may find that his electorate wants to “experiment” with leaving the EU, just as many US voters want to experiment with Donald Trump, or some UK voters seem to want to experiment with Jeremy Corbyn.

There also is the related risk that UK voters may see the referendum as an opportunity to “make a statement” about their sense of who they are, rather than make a final, fully considered, decision about the future of Europe. 

So we must prepare for the possibility of an EU without the UK.

WILL CHINA BE ABLE TO MANAGE THE NECESSARY ECONOMIC CHANGES?

The Chinese stock market has fallen 40% from its 2015 peak. By comparison the US market is only 10% down from its 2015 peak, and the Euro zone only 15%.

House prices in major Chinese cities are out of reach of most employees. 

Air quality in the same cities is poor because China relies disproportionately on coal as a source of energy. 

Meanwhile China does not have a comprehensive welfare state, so Chinese families have to rely on savings, sometimes in the form of stocks and shares, and house property, to provide for their retirement. The fall in the stock market will thus have a direct effect on many Chinese families.

I have visited China a number of times in the last few years. 

On one of those visits, in 2013, I drew the attention of my Chinese audience to the then latest IMF report on the country.

It contained warnings that will sound familiar to those who have studied recent Irish economic history.

The IMF talked, even then, of the risks in China of 

• “a steady build up of leverage eroding the strength of the financial sector”,
• “a boom in non traditional sources of credit”, and of the need to take
• “steps to reduce moral hazard to ensure that banks do not engage in potentially destabilizing competition” .

On the other hand, The IMF recognised that China has very well capitalised banks.

Most commentators believed that the Chinese Communist party, with its immense concentration of talented people in key positions, would be able to manage the huge structural changes required in the Chinese economy. It was believed they could impose technocratic solutions more easily than would be possible in a democracy.

The changes required include

• a  managed  dissipation of the stock market and housing bubbles, 
• a shift China away from reliance on investment in physical infrastructure to support the economy, to a  western style reliance on consumer spending.At one stage China was pouring up to 40% of its GDP into physical investment. When one is investing to that extent, one is bound to be putting some of the money into projects that will never yield a return.
• a shift away from coal to cleaner energy sources and
• the inauguration of a welfare state which would facilitate the development of a consumer led economy and less speculative investment by savers trying to provide for their old age

The fact that the Chinese authorities have now had to revert to a policy of currency devaluation is worrying.

It suggests that the authorities are not as firmly in control of the situation as one might have thought, and may not be able after all to manage the structural changes required, without the sort of political turbulence we have seen in democratic countries.

WHAT ARE EUROPE AND AMERICA DOING TO HELP CHRISTIANS FLEEING THE MIDDLE EAST?

This article from the Wall Street Journal highlights a huge moral and political question for our times....the extermination of long established Christian communities in the Middle East. Some of the refugees, described so graciously by David Cameron as a "swarm", are Christian refugees from Syria and Iraq.

While not the primary cause, Western interventions, like the invasion of Iraq, contributed  to the plight of Christians there. Western support for rebels in Syria is also worsening the position of religious minorities in that country.

People fear the arrival of refugees in the West, and suggest they will become a burden. But experience shows that previous refugee flows, like the East European Jews, the Ugandan Asians, and the Lebanese Christians have quickly become self supporting and active contributors to economic development in their host countries.

People look back and ask themselves why their governments failed to provide refuge for Jews fleeing the Nazis in the 1930's and assume smugly that, knowing what we now know, this generation would do better.

The present response to the Middle Eastern refugee crisis throws that into doubt. In fact there is less excuse now, because many Western societies are ageing, and actually need an influx of younger people.