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We have been here before!

There are more than a few echoes in the present Brexit debate from the earlier campaign to join the euro. As that campaign began, the UK political elite who favoured entry discovered that they had to win support for membership before they could begin to persuade the electorate about the merits of the euro.

That campaign, for both euro and for membership, had a cross-party elite profile, much like the current Remain campaign, and indeed with some of the same figures leading the media presentation of the case: Tony Blair, Kenneth Clarke and Michael Heseltine. Multinational corporations bankrolled a pressure group called Britain In Europe.[1] It found distinguished academic support from LSE.[2] It commissioned a report from a Berkeley professor whose adapted gravity trade model had predicted prodigious growth of UK exports and GDP after the UK joined the new currency. Fifteen years later, he published a mea culpa, saying that if anything ‘EMU has a smaller trade effect than other currency unions and is often estimated to be negligible or negative.’[3]  Or negative? Ouch!

Britain in Europe’s contemporary equivalent, Business for New Europe, has not revealed its financial support though it has listed the executives and officers who ‘participate in a personal capacity’[4] amongst which one may see some of the same companies that supported in Britain in Europe fifteen years ago. Alongside this lobby, there is a research-oriented think tank called Centre for European Reform with a still longer list of corporate backers, a number of whom have publicly entered the debate to urge continued membership. CER claims to be working to improve the quality of the debate on the European Union which seems to mean research to ignore eurosceptic voices. In 2014 it organized a ‘commission’ to examine the merits of EU membership, and presented its own adapted gravity trade model, which happily found that the membership had increased UK trade by an astonishing 53 per cent. Strange how obliging these models are.

As this article from The Independent in 2000 demonstrates, there was also a resemblance to the contemporary scaremongering. This story was carried by the BBC and other papers. For The Independent, eight million unemployed was evidently not quite scary enough, so it sketched a scenario in which ‘exports would halve… and as the effects of lower demand feed through… 30 per cent of the workforce would be unemployed which is more than the total number of people working in manufacturing, retailing or the entire public sector.’[5]

The Independent report was totally bogus. The NIESR report, which it quotes, had in fact found that British withdrawal would have no long-term impact on employment. On seeing this and NIESR’s director said ‘It’s pure Goebbels …a wilful distortion of the facts.’[6] His response led to scaling down the figure, and the story continued as it does to this day, as three and half million jobs that ‘depend’ on Europe.

Brexit campaigners seem to have a more difficult task on their hands, since a new scare story appears almost every other day. Last time around, however, there was a verbal assault on those who opposed the new currency as some columnists competed to see who could abuse them in the cleverest manner. They were ‘loony tunes’ (Andrew Rawnsley in The Observer), ‘assorted maniacs’ and ‘buffoons’ (David Aaronovitch in The Independent) and (men ‘weighed down by the baggage of phobia, sentiment and illusion’ (Hugo Young in The Guardian).[7] Brexit supporters seem to be spared this kind of treatment, though Niall Ferguson is trying.[8]

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[1] Britain in Europe

[2] Richard Layard, William Buiter, Christopher Huhne, Will Hutton, Peter Kenen and Adair Turner with a forward by Paul Volcker Why Britain should join the euro, Britain in Europe, London, 2002 Christopher Huhne and Nick Canning, Crystal Balls: false prophecies from anti-European economists, Britain in Europe, nd, 2002ca

[3] The original paper was A.K. Rose ‘One money, one market: The effect of currency unions on trade’, Economic Policy, 15 (30) (2000), pp. 7–46.  The apology was Reuven Glick and Andrew K. Rose, Currency Unions and Trade: A Post‐EMU Mea Culpa * Revised Draft: June 16, 2015 Comments welcome


[5] Andrew Grice, Eight million jobs would be lost if Britain quit EU, The Independent, 18th February 2000.

[6] Andrew Pierce, Pro-euro group acted like Goebbels to distort figures, The Times, 19th February 2000.

[7] Documented in detail in Peter Oborne and Frances Weaver, Guilty Men, Centre for Policy Studies, 2011.

[8] Niall Ferguson, Brexit’s happy morons don’t give a damn about the costs of leaving, The Sunday Times April 17 2016

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