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Who is better at predicting: the expert or the novice or someone else?  Intuitively people believe experts. But science tells us a very different story.  And Brexit provides some startling evidence in support.

Experts have been busy predicting what will happen if and when the UK leaves the European Union. And Remainers, including of course politicians who oppose Brexit and many in the media have been wheeling out the experts to tell us all what a disaster it is going to be unless we remain.

So we need to look to what the science tells us about the reliability of expert predictions.

As the 2001 Nobel Laureate for Economics Professor Daniel Kahnemann tells us about analysis of 80,000 expert forecasts:

The experts performed worse than ….. dart-throwing monkeys …”

[“Thinking, fast and slow” [pps 218-221]]

Science tells us that:

specialists are not significantly more reliable than non-specialists in guessing what is going to happen ….. Knowing a little might make someone a more reliable forecaster, but .. knowing a lot can actually make a person less reliable.”

“Everybody’s an Expert – Putting predictions to the test.” A review by Louis Menand of the Professor Philip Tetlock’s Book “Expert Political Judgment: How Good Is It? How Can We Know?”

If experts know better how does science explain this howler by HM Treasury under former Chancellor George Osborne, which became a major part of “Project Fear” in the days and weeks leading to the 23rd June 2016 Brexit Referendum.

The predicted disaster to follow a leave vote did not happen and in over three years since it has still not happened:

May 2016 HM Treasury analysis: the immediate economic impact of leaving the EU

This paper focuses on the immediate economic impact of a vote to leave and the two years that follow. ….The Treasury analysis in this document uses a widely-accepted modelling approach …. one of our country’s foremost economists and a former Deputy Governor of the Bank of England, …… says that it “provides reasonable estimates of the likely size of the short-term impact of a vote to leave on the UK economy”.

The analysis …. comes to a clear central conclusion: a vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain.”

Part of the explanation is the illusion created by experts who provide credible explanations of past events.  Experts gain credibility with the public from such explanations.  We believe them when we should be highly skeptical.

Nobel Laurate Professor Daniel Kahnemann explains:

The illusion that we understand the past fosters overconfidence in our ability to predict the future.”

And experts provide the public with their analyses and explanations of past events. Kahnemann expands on this:

The idea that the future is unpredictable is undermined every day by the ease with which the past is explained. … our tendency to construct and believe coherent narratives of the past makes it difficult for us to accept the limits of our forecasting ability.  Everything makes sense in hindsight, a fact that financial pundits exploit every evening as they offer convincing accounts of the day’s events. And we cannot suppress the powerful intuition that what makes sense in hindsight today was predictable yesterday.

Another part of the explanation is the experts themselves.  Kahnemann explains:

Tetlock interviewed 284 people who made-their living “commenting or offering advice on political and economic trends:’ He asked them to assess the probabilities that certain events would occur in the not too distant future, both in areas of the world in which they specialized and in regions about which they had less knowledge. Would Gorbachev be ousted in a coup? Would the United States go to war in the Persian Gulf? Which country would become the next big emerging market? In all, Tetlock gathered more than 80,000 predictions. He also asked the experts how they reached their conclusions, how they reacted when proved wrong, and how they evaluated evidence that did not support their positions. Respondents were asked to rate the probabilities of three alternative outcomes in every case: the persistence of the status quo, more of something such as political freedom or economic growth, or less of that thing.

The results were devastating. The experts performed worse than they would have if they had simply assigned equal probabilities to each of the three potential outcomes. In other words, people who spend their time, and earn their living, studying a particular topic produce poorer predictions than dart-throwing monkeys who would have distributed their choices evenly over the options. Even in the region they knew best, experts were not significantly better than nonspecialists.

Prediction” is in-apposite when dealing with complex circumstances. “Forecasting” is more appropriate. Weather forecasts are a typical example. The ability to forecast the weather reliably beyond a few days is highly limited. This is a consequence of complexity. The further into the future we look the less reliable the forecasts become.​ Reliable prediction is impossible when confronted by complexity.​

Kahnemann further describes what during over three years of Brexit we see practically every day and sometimes several times a day and covering many broadcast hours:

Television and radio stations and newspapers have their panels of experts whose job it is to comment on the recent past and foretell the future. Viewers and readers have the impression that they are receiving information that is somehow privileged, or at least extremely insightful. And there is no doubt that the pundits and their promoters genuinely believe they are offering such information. Philip Tetlock, a psychologist at the University of Pennsylvania, explained these so-called expert predictions in a landmark twenty-year study, which he published in his 2005 book Expert Political Judgment: How Good Is It? How Can We Know? Tetlock has set the terms for any future discussion of this topic.

And what can we say about Brexit?  The state of the UK’s economy today is far far better than the expert predictions over three years ago were claiming with such certainty.

In summary:

1) experts gain credibility by explaining past events cogently and coherently;

2) when it comes to the future, experts are no better at forecasting than non-experts and can be worse than “dart-throwing monkeys“.

Have we in the UK been getting steadily poorer year-on-year over 46 years in the “European Project” [the EEC and then the EU] than if the UK had been out?

What is the evidence?

Remainers claim “We’re better off in”. But is it true? And if “We’re better off out” people should know.

The UK is tipped to overtake Germany and become the largest economy in Europe. Will the UK’s Gross Domestic Product [GDP] increase faster if we are out of the EU and make us in the UK all wealthier? And could that be sooner than later if we are out?

By 2021, if the UK remains stuck in the EU, assuming we would have had 0.3% higher annual GDP growth out, we could be US$470 Billion worse off just in that one year – let alone any others.   Or to put it another way for every 0.1% lower annual GDP growth in the EU, we will be worse off by US$137 billion by 2021 just in that one year. This ignores cumulation – the compounding of year-on-year lower GDP on each later year.

And what has been the cost to the UK over the entire 46 years in the European Project? First estimate the total annual loss each year over 46 years the UK has been in the European Project and add the amount every year over all 46 years.

Over 30% goes to government, so that is a huge amount of lost tax revenue every year to fund education, the NHS, social services and tax cuts.

GETTING ANSWERS

Comparing historic annual economic growth with other world regions can help provide answers to such questions. It must be over the long term and not just a couple of years. But with all the claims and counter-claims of each side, Leavers and Remainers accusing the other of [putting it politely] being “economical with the truth” or “gilding the lily“, whom are we to believe? On this issue in the run up to the 23rd June 2016 Brexit Referendum you cannot even believe Full Fact, disporting themselves then and now as “The UK’s Independent Factchecking Charity”.

THE EU-ANTARCTICA ALIGNMENT

Boris Johnson’s 29th May 2016 Telegraph newspaper article was headlined “The only continent with weaker economic growth than Europe is Antarctica”. All in all, notwithstanding the trend to attacks on the reliability of the pronouncements and promises of the UK’s current Prime Minister, it appears reliable and sound overall making useful points. Johnson included that:

Since 2008 the US has seen gross domestic product go up by about 13 per cent; the EU’s has gone up by 3 per cent. The EU is a graveyard of low growth; the only continent with lower growth is currently Antarctica. That is partly because of the sclerotic one-size-fits-all Brussels approach to regulation; but, worse, in the last decade the EU has been suffering from a self-inflicted economic disaster – the euro.”

The Antarctic alignment with the EU’s economic prospects was a lyrical poetic picture making a point. Antarctica, the fifth largest continent is the most desolate and cold place world-wide. Over 97% of its 5.5 million square miles are frozen assets – ice-covered all year. Populated by an estimated 8 million penguins: their main domestic product [aside from chicks] is gross – penguin poo. The remainder of the continent’s economy is considered to include fishing, tourism [around 60,000 tourists per annum] and scientific research [about 4000 researchers during the warmer months].

The stark contrast with world growth was implicit and exposed the weakness of the EU’s historic growth record. This spawned a rash of repetitions and responses.

THE REMAINER RESPONSES – “SUNNY DAY ECONOMICS”

Remainers tried to dampen the impact. The real comparison was the EU’s poor economic growth compared to the rest of the world, so defending against the Antarctic comparison was a hopeless cause. But could the EU-Antarctica comparison have distracted from the real issue: is the UK historically poorer in the EU than it would have been and so wealthier in future if out? That is the ball. Keep your eyes on it.

In 2016 Full Fact presented themselves as checking claims made in the run-up to the 23rd June 2016 Referendum. Full Fact did not in fact fact-check adequately the information they claimed to have fact-checked. They published information which was unreliable and misleading. An example is a Full Fact 16th June 2016 website entry claiming to have fact checked Michael Gove’s 15th June 2016 BBC Question Time special. Full Fact tweeted “EU recently had the lowest growth of every continent but has now overtaken S America”.

That is Sunny Day Economics – sticking your head out of the window on a sunny day when it is raining in France and claiming the UK has the more pleasant sunnier climate, whilst ignoring decades of statistics.

So much for charity “Full Fact” [Major funder Google]. ITN re-published their claims in more detail including that:

But from 2014 until now, South America and Europe as a whole have grown more slowly than the EU. It has also been declining as a share of the world economy for several decades, though this mainly reflects fast growth in other regions.”

Whilst admitting the overall problem, ITN’s version of the Full Fact fact-check repeated two points which are misleading. This was still also Sunny Day Economics – in this case the Sunny Day is a period of at most 2.5 years. The UK has been in the “European Project” for about 46 years. EU economic growth historically has been for long periods the worst in the world – not 2.5 years. It would be the same if they relied on 2.5 seconds, minutes, hours, days or weeks or months. It is all Sunny Day Economics. And the “growth in other regions” excuse just will not do, as will be seen, reading on here.

Also on 16th June 2016, Justin Haque, a Devon businessman, published a political commentary in the South Hams Gazette “The case for Leave also covered by other local Devon Papers. Haque included briefly Boris Johnson’s amusing and colourful claim that “the only continent with weaker economic growth than Europe is Antarctica!”. The idea appeared on Vote Leave’s Twitter feed the same day.

Two days before the 23rd June 2016 Referendum, a politically active academic economist [declared interest: Labour Party member], wrote a response to the Vote Leave tweet: “Fact Check: does only the economy of Antarctica grow slower than the EU’s?”. The response was published alongside what was meant to appear as a peer review of the response written by a University of London Professor of economics. The response included the following comment about Antarctic economic growth:

Antarctica, …. has virtually no economic output. … the claim is simply false: the Latin American continent has lower growth than the European Union, ….”

That was misleading. Johnson cited an historic period 2008 to 2016, which at around eight years is a more reliable and more scientific approach. The academic cherry-picked and his reviewer allowed that without comment. He qualified his claim about Latin America with [emphasis added] “according to the latest figures from the International Monetary Fund’s World Economic Outlook”.

The figures were just for one year, 2016, and were so not comparable or representative of historic economic growth to Johnson’s 8 years – more Sunny Day Economics – more heads sticking out of windows.

The academic economist did make some better points such as “comparing continents’ performance is not particularly illuminating. Continents are geographical rather than economic areas”. However, the comment that “Comparing Britain’s relative growth to the other leading G7 economies shows that it has been doing relatively well recently.” was less than illuminating. Yet again, one year, a Sunny Day Economics year, 2015, was cherry-picked by the author. Additionally four of the G7 are EU member states: UK, France, Germany and Italy. So not much of a comparison. The other three are Japan, the United States and Canada. Japan’s economic growth has been historically poor for many years and the US, long the economic powerhouse of the world, has led all the other G7 historically for economic growth with the UK second only to the US.

The author of another response challenging Johnson’s Antarctica economic growth article claimed EU economic growth had improved, citing just one year, 2016: “the EU expanded faster than the US for the first time since 2008”. Not only was that Sunny Day Economics, that was [for these purposes] by a relatively inconsequential 0.1% [according to MarketWatch: 1.7%, compared to 1.6% for the US].

That writer went on to admit “It is true that the EU economy was sluggish” but blamed this on “recovering from the recession and eurozone crisis”. That crisis was a result of the EU’s own creation – the Eurozone – contrarian economically, it was and remains an EU politically driven self-inflicted wound. Relying on one year also ignored the continuing historic problem over decades – more Sunny Day Economics.

The author also compared what is not comparable to advanced European economies: “Africa’s growth slowed, Asia was steady and Latin America contracted. Antarctic’s economic growth is unrecorded.”

THE QUESTION & THE DATA – IMF WORLD ECONOMIC OUTLOOK DATABASE

Would UK economic growth have been better if the UK had historically not been part of the EU? Can the Leave confidence in the UK’s ability to trade outside the EU bloc be justified with evidence?

Let us look a little more scientifically at empirical evidence of the performance of the EU using historic economic data. Historic data makes it more difficult to make excuses. It evens out temporary disparities over time. Where there is a world economic downturn, that ispo facto affects the world. Figures covering the world economy over such a period provides fewer hiding places for those with something to hide [eg. the EU and especially the failing Eurozone].

In 2017 Global Finance Magazine [GFM] published comparative world economic growth figures. The magazine is not polemical. It aims to help corporate leaders chart the course of global business and finance, so it needs to publish reliable information. GFM chose particular regions and country groups to make economic growth comparisons.

The original data came from the International Monetary Fund [IMF]. The regions and country groups which GFM used for comparisons are the IMF regions and country groups. In two sets of figures, the totality of the figures covered a twelve year period – the more relevant figures covered 10 years – 2008-2017 – that is less likely to be considered Sunny Day Economic data.

One might like to see figures over a longer period – specifically the entire 46 years of UK membership of the “European Project“. Convenient data for that entire period does not appear to be readily available. The risk in using data over such a long period lies in its reliability: who produces those figures, how they do it, what adjustments they make and how reliable their interpretations might be in the light of world events and events affecting specific countries and regions over such a period, such as the Gulf Wars, the dissolution of the former Soviet Union, the fall of the Berlin Wall and reunification of Germany. And more importantly there is also author bias – by accident or by design.

ITS STARTS BAD AND GETS WORSE

IMF world data starts in 1980, so comparisons over longer periods are possible. However, assuming one can take the GFM 10 year average figures on face value, sourced from original IMF data, one can see that over a 10-year period from 2008 to 2017 the EU’s Eurozone had the lowest average economic growth over that 10-year period in the world at a seemingly dismal 0.4%. The wider EU’s economic growth over that 10-year period was second worst at 0.7%.

By comparison the 10-year average GDP growth world-wide was 3.2% or 8 times that of the Eurozone and 4.5 times better than the EU. In effect the overall world economic growth sits in the middle providing a benchmark to compare the best and worst performers in the world.

THE EU/ARTARCTICA ALIGNMENT SEEMS TO HOLD TRUE

So, shocking but true, Boris Johnson’s 29th May 2016 Telegraph published analysis of the EU-Antarctica economic alignment holds, despite the valiant but [one hopes] misguided efforts of charity “Full Fact“, ITN, economic academics and others. Sure, its eye-catching and sure, Antartica is the antithesis of an advanced economy, but that makes the comparison of the EU being second worst to Antartica stark and difficult to fault.

It is still likely to be misleading to compare developing economies with the EU. Economies of developing nations can experience greater annual GDP growth and faster historical economic growth than the more mature advanced economies of developed nations over the same periods. This seems to be reflected in the GFM figures for regions experiencing the greatest historic economic growth over 10 years.

GFM ECONOMIC GROWTH FIGURES – EU v THE WORLD

  • Emerging and developing Asia was top over 10 years with 7.2% average annual GDP growth;

  • Emerging markets and developing economies were joint second at 5% with the ASEAN-5;

  • surprisingly, Sub-Saharan Africa was fourth at 4.7%.

  • Middle East, North Africa, Afghanistan, and Pakistan were fifth at 3.5%;

  • Middle East and North Africa taken alone next at 3.4%;

  • Emerging and developing Europe was seventh at 3.9%.

However, when we compare Advanced Economies [but excluding the G7 and Eurozone], at 2.4% average 10 year economic growth the performance of the EU and Eurozone are substantially worse [0.7 and 0.4% respectively].

  • Latin America and the Caribbean are also still better coming in at 2.2%;

  • the Commonwealth of Independent States [ie. former Soviet Union aligned states] is at 1.2%;

Advanced economies” at 1.10% is still substantially better despite that figure being dragged down by the inclusion of the average economic growth of the ailing EU and Eurozone in that economic grouping.

The better comparison with the EU and Eurozone is probably with the “Advanced economies excluding the EU and Eurozone” – which is still six times better growth than the Eurozone and 3.5 times that of the EU.

THE LONGER TERM BIGGER PICTURE – IMF DATA 1980 TO 2018

During 1980 to 2018 the worst performers for average annual world economic growth were:

  • the Eurozone – bottom at 1.49%,

  • the former Soviet Union aligned states [Commonwealth of Independent States] next at 1.81%

  • third worst is the EU at 1.89%.

Obviously, attempting to cover such a long period since the end of 1979 one needs to consider relevant world events, but the figures still provide a comparison to world economic growth performance. And it is going to source and not relying just on the GFM figures [even though in turn also sourced from the IMF].

The dissolution of the Soviet Union in 1991 left the economies of those states in a dire condition. Extremely poor economic growth dragged down their average economic growth figure over the period since 1992. For example 1993 to 1996 the economies contracted dramatically instead of growing. There were large annual contractions in GDP of -9.57%, -13.86%, -5.34% and -3.57% respectively. That has changed substantially as the GFM figures indicate with that grouping having a 1.2% 10 year average economic growth to 2017 compared to the Eurozone of 0.4%.

The Eurozone started with the euro’s launch on 1 January 1999. It was then an ‘invisible’ currency, only used for accounting purposes and electronic payments for the first three years. The big change came on 1 January 2002 in 12 EU countries with the biggest cash changeover in history. The Eurozone grew over time as other EU states joined that currency system. So one must bear in mind the world has been changing when looking at the figures.

WHERE-EVER YOU STAND THE VIEW IS SIMILAR

No doubt Remainers will endeavour to criticise and undermine the figures presented here. However, by keeping faithful to the original data and avoiding “adjustments” it is likely to be more difficult to argue with. They will of course try no doubt. At least Sunny Day Economics and cherry-picking can be shown up for what it is.

Whatever one’s perspective and whatever counter-arguments might be deployed, the plain and stark fact, whichever way one looks at this is, the EU [which includes the Eurozone] on these IMF sourced figures has the worst 10 year average historic economic growth in the world and the Eurozone is worst of all at 0.4%. That is far from the world benchmark of a 3.2% ten year average growth, which sits in the middle of the best and the worst economic growth regions in the world. It is 8 times that of the Eurozone and 4.5 times better than the EU.

And the EU and Eurozone have consistently been bottom on average annual economic growth since 1980 with the temporary exception of the Commonweath of Independent States on their sudden emergence following the dissolution of the Soviet Union.

OTHER LESSONS?

What can we say about the top performing countries for growth in the world even if we cannot fairly compare their impressive growth figures as fast developing economies with more mature developed nations?

We can say this: those countries’ economies have been growing in many cases over decades with a cumulative growth record which tells us something. The people in those nations have more money to spend now than they had twenty or thirty years ago. A country like Bangladesh with annual growth in the region of 5-6% over many years will be far wealthier now than 30 years ago.

And we should also consider the IMF “Other Advanced economies” which can be more easily compared to the EU and Eurozone and which have had substantially better historic economic growth. They will also have more money to spend: countries like Australia, New Zealand, Singapore, Israel and Korea. To those one must add the G7 powerhouse of the USA and also Canada.

And when people in other countries have more money to spend, does the UK have products and services they could need or want? Are there greater opportunities for trade now world-wide than 10, 20, 30 and 40 years ago? And if so, are we better off out of the EU?

An in-depth analysis of these questions is for another article. The Leave answer we know is in the affirmative, but is it justified?

THE LEAVE ARGUMENT MAKES SENSE – EU TRADE OR WORLD TRADE?

When put in a perspective as done in this article, backed by empirical evidence, one can start to see the sense of it. This fills in some of the detail providing more clarity for what many Leavers know intuitively.

We can summarise the EU’s economic growth record as the worst in the world. It is not even keeping up anywhere near other advanced economies. There are 500 million people in the EU and many member states are not wealthy and net recipients of the EU budget contributions.[eg. like Bulgaria]

The Rest of the World is estimated to comprise just over 7 billion people and many more countries than the EU including many developed economies. The opportunities for trade must logically be far greater than those presented by the vastly smaller EU trading block. Perhaps this might be behind the recent claims that Angela Merkel allegedly expressed concerns about Brexit making the UK a competitor. And if that is what the EU is about, suppressing competition from the UK, is that alone reason to be out? What does Merkel know that others do not about the potential economic consequences for Germany of the UK leaving the EU?

One might ask whether the EU is the kind of anchor which instead of stabilising the economies of member states, destabilises by dragging their economies down? What view should citizens of the PIIGS take? Portugal, Ireland, Italy, Greece and Spain are the economic basket cases of Europe needing bailouts with invented EU money conjured up like a magic trick literally overnight to stave off a collapse of the Euro, as Donald Tusk described in an interview about the crisis and the EU’s management of it. Tusk seems to be genuine honourable committed passionate and sound, so no personal criticism of the man is intended here.

And when one looks further one thing is noticeable about the EU debate. That is how Europhiles become very quiet and do not engage in discussion to argue about the wider economic, social and political instability across the EU member states which has followed the unhelpful EU policy of austerity. To avoid discussion they keep silent, hoping to push or provoking debate onto other issues.

THE REAL BREXIT QUESTION

And we come to the real question about Brexit. It is not “are we better off in than out” or vice versa.

The real Brexit question is not being debated nor has it been, nor are the public being informed. Europhiles and Remainers alike also tend not to engage in the debate about all the things that are wrong with the EU – pushing the subject onto other issues instead.

What is wrong with the EU goes beyond economic growth and the destabilising effect the EU has had across Europe since its formation nearly thirty years ago.

And what looms large in any picture of peace in Europe is not how the EEC nor how the EU has helped maintain peace. There has been an exponential rise in prosperity since the end of World War II. That rise in prosperity would have happened with or without the EEC and EU. It has been seen across the entire world. Simply put, people in the developed EU economies have been too busy making money since 1945 to want to go to war with each other.

But once we see economic, political and social instability, especially if there is recession and economic decline, then there could be instability which might see a return to conflict between nations in Europe. The relatively recent Balkan wars are a demonstration of what can happen – that was war in Europe – whether anyone likes to see it as that or not – and there were war crimes trials – which we have known before then.

Never forget that some of the ordinary people walking down the street in your town in your road where your live are capable of doing what was done in the Balkan war and before. We are all fallible and subject to the same psychological pressures whether we like to admit that or not. Some are more fallible and more subject than others. The message is not to blame people but to recognise the reality. The ultimate question is whether the “European Project” is ever capable of ensuring peace in Europe. Frankly, it is creating instability socially, politically and economically. And in this writer’s view it is not the driver of peace – peace since 1945 is built on prosperity and enjoying all that brings.

Is economic growth – or at least political and social stability – more important than the EU? And regardless of what happens to the world in the coming decades.

It is all well and good speaking of our friends and partners, but historically Europe has been mired in conflicts over centuries. Those conflicts have not gone away. What social, political or economic changes might return the continent to greater or wider conflict? One cannot pretend it is impossible. Indeed we see it happening now – albeit and inappropriately not all is reported in our newspapers or on our television screens, including it seems events in the UK.

And are France and Germany and other EU states friends? Do not be misled by the mellowing of rhetoric over the past three years since the Referendum. The EU has mellowed most likely because of what some might interpret as posturing and statements aimed at the UK were counterproductive, persuading former Remainers to want to support leaving. And they need the UK’s money. Voting to veto extensions to the Article 50 period is like Turkeys voting for Christmas. There is little doubt that whilst the prospect of keeping money coming into the EU Commission and Council’s coffers from the UK remains, they will extend the period. Where the breaking point is and when an EU member state might veto an extension is moot.

And if the EU becomes the centre of the EU “Empire” as some claim it has been described by its proponents, and if it then has military forces under its control, what use might be made of them in dealing with dissent and conflicts internal to or between the EU states and the EU?

How easy would it be to suspend the rule of law in the EU in the event of a widespread collapse of social order or dissent against the ruling class?

These are merely questions. They are not predictions but they are issues any sovereign state concerned for the prosperity and security of its nation should contemplate, no matter how remote the concerns might be thought.

So economic growth is one small part of the picture – but it is an integrated picture. Growth and prosperity would have happened regardless of the EEC and EU and they are what have held the European project together – despite the questionable competence of the EU institutions and politicians. A diminishing of growth and prosperity is today seeing a less stable cohesive union of European states. Gilet Jaune in France were being reported but what else is happening in the EU which is not?

Any analysis of the problems of the EU would fill several volumes. Do you want to spend the time reading them if anyone wrote them? Or should the UK leave the EU in every sense and make its own way in the world unrestrained by the negative ambitions of France and Germany to capture and control a potential future competitor?

AFTER 46 YEARS HOW MUCH POORER IS THE UK IN THAN OUT

So far this article is based on examining historic annual percentage growth. There is a further aspect to consider.

How much poorer has the UK become year-on-year in cash terms? And how much poorer is the UK today as a consequence of the cumulative effect on the nation’s wealth over 46 years of lower annual growth? What would UK GDP be today?

Is there were a way to estimate reliably what UK annual growth might have been if the UK had never joined the European Project?

To put this into terms we all can understand – in hard cash terms what is the potential scale of how much poorer the UK has been getting year-on-year as a member of the European project? And how much in cash terms over 46 years has the UK lost through membership of the European Project?

Also bear in mind the hypothesis in the above article [for which there is evidence] that the EEC and EU have always been irrelevant to maintaining peace in Europe: that the main driver of peace in Europe has been near exponential economic growth post World War II. In other words, an unparalled period of growth and prosperity has meant people are too busy making money to go to war and certainly may lack the motivation in periods of great economic stability.

If that is correct then the main intellectual justification for the existence of EEC and later the EU and the driver for even greater political and economic union is wholly and entirely misconceived. That would mean the whole of Europe has been paying a heavy price to Brussels and in lost GDP over decades for nothing. It also takes away the rationale for increased European social, political, economic and military union.

There is a better rationale for such union but it is not the one seemingly driving the EU and its foundations are also structurally constitutionally and politically inappropriate for such a role.

AN ESTIMATE OF HOW MUCH POORER THE UK IS FROM MEMBERSHIP OF THE EUROPEAN PROJECT

The following figures are solely for illustration and are not and cannot be considered a reliable estimate of what the UK has been losing by being part of the European Project. The underlying assumption, based on empirical evidence, is the UK has had lower annual GDP growth during its membership of the European Project than it would have had out of it.

The calculations here are purely to indicate a potential scale of loss each year to the overall wealth of the UK over the 46 years membership of the European Project.

Let us get out our crystal ball. Assume the UK would have had 0.3% higher annual average GDP growth over last 46 years if it had never joined the European Project. And let us make this very very simple. A most naive calculation would place the UK with 13.8% higher GDP today – [ignoring the compounding effect each year of average annual growth on all the prior increments of average annual growth. Compounding growth on growth would produce a higher figure.]

So let us put that into a naive cash figure from the IMF data.

UK GDP in 2015 according to the IMF data was the US dollar equivalent of US$2.7 trillion. [The IMF figures are Gross domestic product based on purchasing-power-parity (PPP)].

UK GDP is projected by the IMF to rise in 2021 to approaching US$3.4 Trillion.

For the 2015 figure 13.8% is US$370 Billion extra GDP.

And on the basis of the projection for 2021, that is an addition to GDP of US$470 Billion.

How much that might mean in either total tax generating revenue for Government or for tax cuts is an interesting question. So how much extra would there have been for the NHS? Higher or lower than £350 Million pasted on the side of a big red bus? Was that figure far too low when the loss of cumulative and annual losses to GDP are taken into account?

And if the UK was generating an extra 0.3% GDP each year that [crudely analysed for simplicity of illustration] is crudely equivalent to something extra being added every year to the nation’s wealth – so there is a compound effect of the extra each year contributing to the overall wealth of the nation – in other words there is a potental capital accumulation over time in addition to the potential extra revenue generated annually.

LOST TAX REVENUE FOR EDUCATION, THE NHS, SOCIAL SERVICES AND/OR TAX CUTS

What is the Government revenue for every £1 generated in GDP? And so how much extra tax revenue from higher GDP would be available for HMG to spend on the UK if we were not part of the EU? How much more for schools, the NHS, social services or for tax cuts?

It is possible to make a very simple rough estimate in ball park figures [and it is possible to make a less rough estimate also with a bit more work – which I will leave to someone else to do if they want to].

This is thanks to the 2018 OECD Revenue Statistics for the United Kingdom – which are available online. These confirm that the UK Tax-to-GDP ratio has always been higher that 30% in the period 2000-2017.

So a reasonable assumption is that average UK GDP growth in the EU year-on-year for the past 46 years would have been higher not being in the EU/EEC [as the IMF figures already suggest strongly might be the case].

Assuming average annual GDP growth would have been 0.3% higher if the UK were not part of the EU/EEC for the past 46 years additional tax revenue at a conservative 30% of an estimated US$370 Billion extra GDP in 2015 = US$111 Billion for the year.

But for a weekly figure we arrive at = US$2.1 Billion per week in lost tax revenue attributable to lower UK growth as part of the EU.

Obviously that has to be converted to GBP Sterling from US$.

And on the basis of the IMF projection for 2021 UK GDP, that is an addition to GDP of US$470 Billion.

And lost tax revenue to the HMG at 30% of that = US$141 Billion.

Or per week HMG could be worse off by US$2.7 Billion per week in 2021.

If these figures are a good enough rough guide to get an idea of the scale of what EU membership costs in lost GDP, then £350 million on the side of a red bus is understating the weekly cost to the UK a tad.

And sadly this is just one of a number of ways in which EU membership has been making the UK poorer. So the final scale of this when all is taken into account could be somewhat even more concerning.

[This post was last updated 16th March 2019 with some new points/explanation].

The UK and EU could drop off the cliff edge together without realising it just by completing the current Withdrawal Treaty.

The Treaty seems incapable of ever being valid or enforceable. This is because of illegal conduct by the EU.

All involved appear to have assumed Brexit is to be agreed and treated as if just an ordinary commercial negotiation and whoever has the greatest negotiating leverage gets the better end of the bargain. That does not appear to be correct. EU law dictates how the EU must act. If tested in the Courts the result could be the Withdrawal Treaty is not legally binding or enforceable.

An underlying theme for the laws and constitution of the EU is the circumscription and control of exercises of the powers of State. EU law is intended to operate to reign in abuses of State power.

The irony is that here we see the very abuses by the EU which have driven many to want to leave and which illustrate the need for dramatic reform for those who wish to remain. 

The illegality by the EU and potential consequences are explained in my email to a number of London Members of the European Parliament today [see full text below].

If any reply I may also publish details on this blog.

SUMMARY

The illegal conduct of the EU is captured in a brief quote from Michel Barnier in French newspaper Le Point International.

In English: “I’ll have done my job if, in the end, the deal is so tough on the British that they’d prefer to stay in the EU”.

This breaches manifold provisions of EU law:

1) the Withdrawal Treaty seems to be made without lawful authority in breach of fundamental provisions of EU law;

2) and/or because any unnecessarily onerous provisions could be found to be illegal and unenforceable.

There may be a high degree of probability that the UK/EU Withdrawal Treaty approved by the Council in November last and relating to the UK’s exercise of its right under Article 50 is invalid, has never had and can never have legal effect and can be annulled under EU law at any time by any person with an interest.

This is argued primarily on the grounds of sufficiently serious breaches of Article 50 and of proportionality. There seem to be other breaches also.

  • Article 50 has been breached – specifically interference with the right to leave the union. That is a right all Member States have agreed all other Member States have. The principle of proportionality has been breached with respect to the terms imposed in the context of an inequality of bargaining power. This also breaches the exercise of the Art 50 right to leave by trying to make it a practical impossibility.
  • Breach of a Treaty provision puts the onus on the EU to prove the Treaty is the minimum necessary. [See eg. Craig 2nd Ed p604 on Proportionality I – The ECJ will tend to construe limits to such rights strictly, with the consequence that there will be a searching inquiry into the suitability and necessity elements of proportionality as exemplified by Hautala].
  • The Treaty is not the minimum necessary. EU Commission Chief Negotiator Michel Barnier has also been quoted publicly admitting he deliberately made it as hard as he could to deter the British from leaving the Union.
  • For serious breaches the Treaty will never have been valid and there is no time limit for bringing a challenge for such breaches [Craig 2nd Ed].
  • If the UK and EU go forward with the current Treaty, nothing they do will make any difference. No proposed changes will make any difference.
  • And to these breaches we can add additional breaches of principles of EU law and others may find further legal issues.
  • It is irrelevant that the UK Government has agreed the Treaty in negotiations because any natural or legal person with an interest can challenge the Treaty and the UK is subject to the law just as the EU is. The UK Government’s actions cannot validate illegality by the EU in the face of challenge by an aggrieved EU citizen with an interest.

If the Courts agree, even if the entire agreement does not fail, whenever in the 585 pages of the Withdrawal Treaty a less onerous provision could have been included whilst still achieving the objectives of the Treaties the more onerous one is illegal.

And the EU’s refusals to negotiate aspects of withdrawal may similarly be unlawful. The EU has refused to negotiate numerous aspects of withdrawal stating it will not do so until the UK has ceased to be a member of the EU.

That is obviously too late.

IN MORE DETAIL

So I wrote to 7 of my 8 London MEPs:

Dear …………

I write as a London constitutent. I am a lawyer.

I should be obliged if you would obtain for me from the Commission, Council and Parliament their position on the illegality of the EU’s approach to Article 50 negotiations and the consequences of that illegality.

The illegality is summarised in a recent quote from Michel Barnier in French newspaper Le Point International. Translated to English it is:

Ill have done my job if, in the end, the deal is so tough on the British that theyd prefer to stay in the EU.

The EU does not appear to be legally entitled to offer the UK a deal so tough that the UK does not want to leave. A Withdrawal Treaty reached on such a basis may prove not to be legal or binding under EU law. And if there is no Withdrawal Treaty in consequence of an unlawful approach to negotiations the EU could incur financial liability.

Can you thus also ask each of the EU Institutions, [Commission, Council and Parliament] for their assessment of the liability to damages should there be no withdrawal agreement concluded or if the current withdrawal agreement is concluded and later found to be unlawful wholly or in parts.

If businesses and individuals lose money in consequence of illegal conduct of the EU there could be legal bills for damages.

Barnier’s approach appears to breach numerous provisions of EU law. In short whenever in the 585 pages of the Withdrawal Treaty a less onerous provision could have been included whilst achieving the objectives of the Treaties the more onerous one is unlawful.

And refusals to negotiate any aspects of withdrawal may similarly be unlawful. That appears to be the case in relation to numerous aspects of withdrawal which the EU refuses to negotiate until the UK has ceased to be a member of the EU. That is obviously too late.

There have already been a number of Brexit challenges in the Courts – including the recent Wightman Case [10 December 2018], the Gina Miller case [24 Jan 2017] and the £190,000 crowd funded Elizabeth Webster case [June 2018].

All Member States have agreed every State has the right to leave the EU.

It follows that the Court of Justice of the European Communities may have to find as a matter of law that the EU, its Institutions and Member States are not allowed under EU law to impede any State in exercising and giving effect to that right. Whilst Article 50 has never been invoked before, there is a body of EU law providing principles laid down by the Court of Justice of the European Communities. These are principles the Court has found must exist if the various EU treaties are to have effect as intended. Individuals can take proceedings under EU laws having direct effect.

The UK is bound to observe EU law so there are implications for the UK Government also.

And there are implications for other EU Member States. This could be if they endorse the Commission’s conduct of the negotiations and the current Withdrawal Treaty or if their electors decide to leave the EU.

Some examples of potentially applicable principles of EU law are mentioned here. There are others which might also apply.

THE RULE OF LAW AND THE VALIDITY OF THE WITHDRAWAL TREATY

The rule of law requires that EU institutions, bodies, offices and agencies shall act in accordance with the law. The supervening provision is Article 2 TEU. EU action to be lawful must accord with the Principle of Conferral or else the EU is acting without legal authority.

PROPORTIONALITY

The Principle of Proportionality [Article 5 of the Treaty on the European Union [TEU]] requires “the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.”

Necessary means “necessary” and no more nor less. Where there is a choice the least onerous must be used.

GOOD ADMINISTRATION

The Principle of Good Administration applies. It has many sub-principles.

In French it is the Right to Good Administration.

Michel Barnier’s admission is confirmation of acting contrary to Good Administration. This puts in question whether he has been acting without lawful authority.

EU’S LIABILITY IF UK REJECTS THE WITHDRAWAL AGREEMENT

If the UK leaves the EU rejecting an illegal Withdrawal Treaty does the Treasury have any calculation of the financial liability of the EU and its Institutions to the UK and to EU and UK citizens?

IMPLEMENTING AN ILLEGAL WITHDRAWAL AGREEMENT

On withdrawal from the EU there will be those who suffer detriments.

Can the UK or the EU implement lawfully a Withdrawal Treaty which is unlawful? If a challenge to the Withdrawal Treaty were upheld and it was found to be made without lawful authority, how much might the legal liability of the UK and the EU be?

If businesses in the UK and the EU were to continue to trade during a transitional period under the Withdrawal Treaty but then find there is no valid agreement and then later no valid trade agreement, what might the cost be and what might the UK and EU’s liabilities be?

What would be the consequences for other countries under WTO rules or GATT and what actions might be open to them to take? How can the requirements of legitimate expectation continue to be met?

And what difference would it make if a Court could remove the offending unlawful provisions of the Withdrawal Treaty as of no effect. What would be left to enforce?

What would the UK’s and the EU’s liabilities be:

    • within the UK and/or EU to businesses and citizens and
    • to third party states and to their businesses and citizens?

RIGHTS TO SUE

Related concerns are ensuring the UK’s rights and the rights of UK citizens to sue the EU for unlawful acts – in this context acts of the EU Commission, EU Council and their agents such as Michel Barnier – are not lost in any Withdrawal Treaty. The position is not clear in the current Withdrawal Treaty.

What is clear is the EU has repeated references in the Withdrawal Treaty to the EU’s ability to pursue the UK in legal proceedings.

And it needs to be clear that citizens have the right to sue the EU for EU unlawful acts occurring up to the end of any transition period and/or when the Withdrawal Treaty comes to an end, whichever is longer and the limitation period on commencing proceedings should be six years from when the breach is known publicly.

Mr Miller

Here I continue discussion of the causes of the new conflicts in Europe. Previously I discussed some of the conditions under which the next war in Europe may arise and whether a European Army will facilitate a power-grab in the EU by a totalitarian EU Government: Brexit And The Next War In Western Europe.

The following is part of a discussion which has been taking place on another blog.

_______________________________

Thanks for your view of history. I have seen many on all sides of the debate coming to recognise there are fundamental problems with the Union as currently constituted.

Brexit seen in context is a symptom of those problems. It is not the British. It is a symptom just as the gilet jaune in France are and other social, economic and political problems across the EU along with the rise of the far right across the EU.

Neither the UK nor the EU leadership come out of the present mess with much credit. Its the people who always end up paying the price.

It is a mark of the competence of the UK leadership and media that the EU has so far escaped being called to account.

The current games are a distraction from what is wrong.

So let us see what is known about the EU leadership just before Brexit – and remember the EU is roughly only two decades old and in that time has lurched from crisis to crisis whilst being the architect of a factual matrix which underpins social, political and economic problems across the EU geographically and politically for the PIIGS and from the Baltic States in the North East to Portugal in the South West.

Turn the clock back only a few years in the EU’s history to 2015. The year before the Brexit referendum – that is how close in time the EU’s woes are linked. It is not coincidence. It is mismanagement.

Even you rail at austerity which is also not just a British problem but describe it as such “The brutal austerity measures initiated by Cameron and Osborne”.

Austerity is a ridiculous and damaging EU wide policy forced on Member States. It has much to do with what is happening across the EU today. The losers are the people and it is taking Europe into conflict as now seen in France.

Austerity is deliberately imposed. The overall political objective is not clear but the symptoms of it we see in France and across the EU are and were a predictable outcome. Brexit is a predictable outcome – the ultimate expression of dissatisfaction with the EU.

Are the problems it has caused intentional or merely a by-product of creating more wealth for the very wealthy? Is the social political and economic destabilisation an objective or side-effect?

Economist Professor Yanis Varoufakis former Greek Finance Minister and someone of ability wrote of his experience of negotiations with the EU during five months in 2015 during the Greek debt crisis:

“…. a titanic battle is being waged for Europe’s integrity and soul, with the forces of reason and humanism losing out …. to growing irrationality, authoritarianism and malice. ….. Europe has twice in the past hundred years dragged the planet down into an appalling quagmire. It can do so again. ….. Leonard Schapiro … on Stalinism: … ‘the true object of propaganda is neither to convince nor even to persuade. But to produce a uniform pattern of public utterances in which the first trace of unorthodox thought reveals itself as a jarring dissonance.”

….. I bore the brunt of precisely this type of propaganda. My attempts ….. were met with a concerted effort to turn our sensible proposals into …. a jarring dissonance.”

Angela Merkel during the crisis and in relation to it stated that we did not want to see another war in Europe. That is how bad it was then. The problems today are not much better.

And there is a war taking place in the EU being fought without armaments and troops – at least not yet – France is on the brink.

Brexit is one of the battlefields. It is not the only one and it is the people of Europe who are paying the price of this war.

As with all wars there are costs.

But some things never make it onto the balance-sheet.

That root and branch reform of the political and administrative structures of the EU is thought to be needed by some on the one hand and on the other the frustration that it would ever occur with the system as it is, is another aspect. Uncertainty about the social, political and economic stability of the Union is another factor.

And how can one put a price on this? A Syrian in a rebel enclave was asked why he was fighting his Government and he answered that freedom is too important. Easy to forget its importance after many decades of relative [but not absolute] peace in Europe. There has been war and it was NATO which was deployed in case the conflict spread. It was not the EU nor its predecessor. That did not prevent war in Europe.

What has kept the peace in Europe has been increasing prosperity and economic development since the 1939-45 conflict. Neither the Common Market nor the EU were the cause of that. It would have happened with or without them.

What is causing lack of prosperity and economic problems is the EU and its austerity. The EU is turning into the architect of new conflicts flaring up in Europe. The clock is ticking. It is just a matter of time.

The irony is acute that the EU wrongly attributed with being a mechanism for peace appears is the architect of the new conflicts.

And put a European army at the disposal of Brussels and we will be on the brink of tyranny. The very kind of tyranny of governments Thomas Jefferson described in the context of the right to bear arms under the US Constitution.

As for your perspective of the history of the Brexit negotiations: “a patient accommodation of the more outrageous demands of a succession of Brexit negotiators” is not accurate.

From a very early stage the Prime Minister’s government conceded practically all the demands of the EU. There was rapid capitulation by the UK including to the payment of £39 billion without knowing what the framework of the future trading relation was to be.

And the context of what Barnier said could not have been clearer: “I’ll have done my job if, in the end, the deal is so tough on the British that they’d prefer to stay in the EU”.

You however write: “I’ll have to reserve judgement on exactly what was meant by M Barnier when he said this.” And then go on to praise him.

You go on to write: “As far as I can see, there has been no breach of Art 50, which simply provides the mechanism by which a member state may exit the Union.”

I cannot tell quite how far you can see. What I can say is that since I last posted here the validity of my legal arguments on the lawfulness of such conduct is coming to be accepted by others with the knowledge to appreciate the legal niceties.

You write “you mean like the “Led By Donkeys” campaign”.

No I don’t.

Please don’t mention ‘May’ again. That is as close to a four letter word as you can get for the numerically challenged but linguistically gifted. Much the same could be said about “Davis” as “Fox”.

And her “red lines” came long after the Withdrawal Treaty text had been finalised so again your version of the history needs attention. The finalised version of the Treaty was since then approved by the EU Parliament and in November last ratified by the Council.

I disagree that “In fact, a little thought on this matter should make it evident that extending anywhere near as advantageous conditions to non-members as to members, would undermine the very foundations of the Union.”

Why should it? Non-members cannot be full participants and can play no part in how the Union develops. Non-members are thus seriously disadvantaged.

And a moment’s thought reveals the wisdom of such an approach. It is better to have a club of contented members than malcontents so not forcing membership of those who wish to leave is a sensible approach – more likely to lead them to return – and in the negotiations one can create a framework to ease the return whilst in the interim effecting change to ensure the club is suited to the common objectives of its membership. A golf club with inadequate golfing facilities is likely to lose members to a club with better facilities but it can regain them if it puts needed change into effect.

What you are really saying is that the Union is an unhappy club run by individuals with issues which raise doubts over their suitability and a track record of failure such that the only way the club can stay together is by shackling the members in an economic prison – neither content to be in and worried of the consequences of being out.

The EU would be a better place if its Member States were content to be members rather than being locked into an economic cage with a key inside but from which they fear to escape. Like a caged bird remains even when the cage door is opened.

This makes no sense “Also, technically it was impossible to negotiate a future trade deal with the UK while it was still a member”.

“Negotiate” is form of talking. How can it be impossible for the UK and EU representatives just to talk to each other? And the UK is still a member and was when people were talking about Norway + and Canada + and suchlike.

In fact it is actually impossible to agree the framework of the future relationship without agreeing the principles of what the future relationship is to be. So again what you say about it being impossible to talk is not consistent with the express requirements of Article 50 for the parties.

This also is a non sequitur and logically flawed: “it is only when the Withdrawal Agreement has been finalised that the detailed aspects become clear of what is to be negotiated in terms of an extensive trade deal.”

It is necessary to know the framework of the future relationship in order to agree what must be done to withdraw.

And Article 50 addresses the future relationship – which does not necessarily include a “trade deal”. It does include things like continuing co-operation on security, arrest warrants, air and other travel.

You don’t need to withdraw from arrangements which are agreed to continue after withdrawal but you do need to know what the future relationships are to be to agree about them.

This is not correct: “Obviously, this process could have been accelerated if the UK demands and red lines had not been entirely internally inconsistent (also known as “cakeism”).” How can this be accelerated? The red lines did not appear until late in the day after the Withdrawal Treaty had been agreed by the UK’s negotiators but not by the UK Parliament. And thank all that is good it was not left to the Prime Minister and her Cabinet.

“The EU …. is constantly renewing itself.” It is not and that is a fundamental problem already noted above.

I will not continue addressing further lacunae. It has been an interesting exercise despite all. And thank you for your comments which have required me to think about the issues and refine my thinking further.

I explained in a prior post that the Withdrawal Agreement appears to be be unlawful in its entirety, not valid and so not legally binding. Anyone can apply to the Courts to challenge it. If that happens and a Court agrees then the UK and the EU – particularly those Member States doing the most trade with the UK could all be jumping off the cliff top together even if Theresa May got her Withdrawal Agreement through Parliament. See EU Illegal Brexit Tactics – Invalidation of Brexit Withdrawal Agreement – Business Can Sue February 27, 2019.

And now someone is challenging the Withdrawal Agreement in the Courts.

Lord Trimble (the holder of a Nobel Peace Prize) who was an architect of the Good Friday agreement has been named in connection with a legal challenge to the UK Government in Court. The challenge is on the basis the ‘Withdrawal’ Agreement seeks to alter the constitutional relationship between Northern Ireland and the United Kingdom without the express consent of the people of Northern Ireland.

It is also now being explained via the Bruges Group’s blog that the creation of the backstop breaches the EU’s own principles and those of other European and international organisations. In particular it breaches the principle of Self-Determination: How the “Backstop” breaches international treaties

 

It is explained in the blog that imposing taxation without representation, via the customs union that the Backstop would establish, is not in keeping with the “European values”. The Backstop would place the EU-27 in breach of a number of their international obligations, including:

– The 1952 Protocol to the European Convention on Human Rights which ensures “the free expression of the opinion of the people in the choice of the legislature”;

– The right to self-determination expressed in Article 1 of the UN Charter and expanded upon in various UN Resolutions including: the Principles of International Law Concerning Friendly Relations and Cooperation Among States (UN Resolution 2625(XXV)), the Declaration on the Granting of Independence to Colonial Countries (UN Resolution 1514(XV)), and the International Covenant on Civil and Political Rights (UN Resolution 2200A(XXI));

– and The EU’s own treaty provisions, including “good neighbourliness” (Article 8 TEU) and the progressive abolition of trade barriers (Article 3(5) TEU) and citizen’s rights to participate in the democratic life of the EU (Article 10(3)).

These are examples of the wider and more general principles I set out on my law blog: EU Illegal Brexit Tactics – Business Can Sue – Invalidation of Brexit Withdrawal Agreement

I discuss some of the conditions under which the next war in Europe may arise and whether a European Army will facilitate a power-grab in the EU by a totalitarian EU Government. This is in an abriged comment I posted on a discussion on ResearchGate:

Has the EU’s Illegal conduct of the Brexit negotiations made the Withdrawal Agreement invalid before it is even signed?

25 minutes ago Clifford Miller Added a reply

Hi Harish,

Thanks for your thoughts.

Yesterday I met with some Hungarian friends who are visiting London with their two primary school age children.

We discussed the EU. We have common concerns. None of them are about the gradual slipping of anything by any country. And the UK remains rated the fifth largest economy in the world, although I am very pleased to see India’s success and development along with the long needed development of many countries including that we now see in Africa since the end of the Cold War.

The union that is the USA and the current union in Europe are very different economically, politically, constitutionally and by maturity. The EU with its own currency, the Euro with the common economic controls on Member States which that entails, has existed for less than 20 years. The union in the USA you say has existed for over 230 years. The rise of the union in the USA could not have been more different and it has had time to develop and grow. Its population 230 years ago was very small but with substantial natural resources including land mass.

The USA has a State of the Union address from the President. The union in Europe could benefit from an annual independent, objective and public State of the Union audit.

In its absence let me give you some examples of what might be part of such an audit.

My friends and I can see and fear the rise of totalitarian government centred on the EU. We can see and fear new wars in Western Europe.

The lack of effective control over abuse of power at the centre of Europe, ignoring the rule of law, such as we see as part of Brexit, combined with the rise of an EU army controlled from Brussels and the civil unrest associated with economic mismanagement caused by a decade of the economically ridiculous and counter-productive austerity policy are all part of an unhealthy picture.

In parts of the EU there is 60% unemployment. The gilet jaune [Yellow Vest] movement in France is new and extensive, provoked by economic, political and social mismanagement. But with a European Army perhaps troops from countries like Bulgaria and Romania might have fewer qualms about shooting Frenchmen dead in the streets to help quell unrest?

One view of Europe is a region with Germany at its centre. Germany is surrounded by satellite states. There can be little doubt that one reason for Germany’s economic success is its geographical position. Germany’s location means it can benefit from the assets and resources of its near neighbours for labour, goods, services and the intellectual capital of educated work-forces.

My Hungarian friends have homes in Hungary and in Germany. They live and work in Germany and commute every few weeks home the 700km to Hungary. A drive of 5 hours.

They tell me that educated Hungarians with language skills find work in Germany. This obviously thereby depletes the intellectual capital of the local labour market and potentially inhibits local economic development in Hungary. However, currently the greatest immigrant population in Germany is from Italy, [and not Turkey as many might be misled to think].

Instead of investing in the economies of the satellites, the EU has literally sucked the life out of countries like Estonia, Latvia and Lithuania. These countries have virtually no young people. They have left to find work and not come back. The remaining populations of these countries are literally dying on their feet. Their economies cannot develop in such conditions. So much for the benefits to them of the EU!

Let us compare the location of Portugal. Portugal is at the edge of Western Europe with a long coastline bordering the Atlantic. It does not have the benefits of Germany’s geographical location. Portugal is one of the unhappily named group of European countries called the PIIGS – Portugal, Ireland, Italy, Greece and Spain. All are associated with economic problems and the need for financial bailouts of their economies. Greece’s economic problems threatened the stability of Europe with Angela Merkel at the time stating publicly that no one wanted to see another war in Europe.

So Merkel at that time could see where economic instability was leading Europe.

When on vacation in Italy a couple of years back after the substantial fall of the British pound after the Brexit referendum I was surprised at how inexpensive Italy is. Italy is poor. It is poorer than it was before. Italians have been leaving in search of work. Many do not come home. The local economies are not being developed and countries like Germany benefit from the outflow of workers.

And so to the stupidity of the austerity policy being pursued by the EU with the benefit of financial controls on Member States required to maintain a common currency, the Euro. The UK has also stupidly pursued austerity firstly under Prime Minister David Cameron and the Chancellor George Osbourne.

The UK is a smaller version of the picture seen throughout the EU. Despite being the fifth largest economy in the World, the North has been economically neglected. The industries were run down since the 1970s. There is poverty. There is a large disaffected population in the North-East and many other areas. The South-East centred on the economic power house of the City of London prospers – for the moment at least.

So what has austerity achieved? Mainly economic mismanagement and an increase in a disaffected population which is and feels poorer now than before.

To pay for the fall in economic activity which austerity encourages the national debt has been rapidly rising. In a few short years it rose from around £900 billion when Cameron’s Government came to power and introduced austerity. One estimate puts it now at about £2.2 trillion.

Had the UK instead of pursuing austerity over the time of this £1.3 trillion increase invested it in infrastructure projects and education and training new skills for C21, the UK would been in a much better place today. The monies invested on infrastructure would have stimulated the economy and returned to the Government in taxes whilst the work-forces in the neglected parts of the UK could have been provided with the skills national and international businesses seek. Instead we have an increase in poverty in the neglected areas with an increasing number of families relying on food-banks to feed the children and parents.

A contrast is the success of education with the focus in Scottish universities on computer gaming technology. This was not a Government initiative. One report suggests Scotland’s software and electronic publishing sector employs around 20,000 people and contributes about £1bn to the economy. So investment in infrastructure and education can and does work.

Is a Federation of EU States potentially good? There is no doubt about that.

Is the current form of union in Europe good? No. One must remember that the present political structure was designed to create a common market to aim at freedom of movement of labour, services, goods and capital. The Commission’s job was to create the laws to establish common standards throughout Europe of this common market – a free trade area. The Parliament had little or no power, although that has changed in part. The Commission was supposedly overseen by the Council comprised typically of a Minister representing each Member State.

This political structure is not appropriate for a Federation of States. And it has been mired in corruption and abuse of powers for decades. It is a system open to manipulation by external interests. And we can see that every day.

What no one thinks about is this – how much poorer are European States under the European Union and how much are their economies held back from developing compared to what could have been achieved without the current form of EU government riding their backs and holding them down.

A political friend told me that the record of economic growth in the EU region historically is second only to Antarctica – which is mostly inhabited by penguins.

Most people do not know about this so be prepared for a surprise.

Your right – yes for you personally – to documents of EU instititions  is a fundamental right of EU law and also a basic condition of an open, efficient and independent European administration. Any limitation of this principle must be narrowly construed to comply with the criteria of Article 52(1) of the Charter of Fundamental Rights of the European Union and must therefore be based on law, must respect the essence of the right and follow the criteria of proportionality.

The right to documents is a right enshrined in the Treaty Establishing the European Union:

Article 15(3) TFEU: ‘Any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, shall have a right of access to documents of the Union’s institutions, bodies, offices and agencies, whatever their medium, subject to the principles and the conditions to be defined in accordance with this paragraph…. Each institution, body, office or agency shall ensure that its proceedings are transparent and shall elaborate in its own Rules of Procedure specific provisions regarding access to its documents, in accordance with the regulations referred to in the second subparagraph….’; Charter, Article 42: ‘Any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, has a right of access to documents of the institutions, bodies, offices and agencies of the Union, whatever their medium.’

And under Article 42 of the Charter of Fundamental Rights of the European Union [“European Charter”]:

Article 42 Charter: ‘Any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, has a right of access to documents of the institutions, bodies, offices and agencies of the Union, whatever their medium.’

In principle therefore you are entitled to documents relating to the forthcoming Brexit negotiations.  There are of course limitations and exceptions.  If any exception or limitation might be invoked in relation to contemporaneous disclosure of Brexit negotiation documents, a main question is whether there is an overriding interest favouring contemporaneous disclosure.  And even if there is any delay in disclosure, there remains the issue of when disclosure will take place.

This law is implemented in an EU Regulation: Regulation No 1049/2001.  Which is grandly titled:

 REGULATION (EC) No 1049/2001 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 30 May 2001  regarding public access to European Parliament, Council and Commission documents

Here we will do things a little bit “backwards” by setting out the Articles of the Regulation so you can see the “nuts and bolts” of the law.  However, unlike statute laws of English and other common law countries, when interpreting the Articles of an EU Regulation, the preambles and recitals are the first source to consult.

For Regulation 1049/2001 these are at the beginning under the oh so grand heading:

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 255(2) thereof,
Having regard to the proposal from the Commission (1),
Acting in accordance with the procedure referred to in Article 251 of the Treaty (2) …..

And then the Preambles and Recitals continue in this vein and here are set out just the first few and grandest of them all.  The first are the most important:

Whereas:
(1) The second subparagraph of Article 1 of the Treaty on European Union enshrines the concept of openness, stating that the Treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen.

(2) Openness enables citizens to participate more closely in the decision-making process and guarantees that the administration enjoys greater legitimacy and is more effective and more accountable to the citizen in a demo­cratic system. Openness contributes to strengthening the principles of democracy and respect for fundamental rights as laid down in Article 6 of the EUTreaty and in the Charter of Fundamental Rights of the European Union,

(3)  The conclusions of the European Council meetings held at Birmingham, Edinburgh and Copenhagen stressed the need to introduce greater transparency into the work of the Union institutions. This Regulation consolidates the initiatives that the institutions have already taken with a view to improving the transparency of the decision-making process.

(4) The purpose of this Regulation is to give the fullest possible effect to the right of public access to documents and to lay down the general principles and limits on such access in accordance with Article 255(2) of the EC Treaty.

The remainder of the Preambles and Recitals can be found in the Regulation:: Regulation No 1049/2001

Again, working from the end first these words found at the end of the Articles are significant for you personally:

“This Regulation shall be binding in its entirety and directly applicable in all Member States.”

This makes the regulation have direct application in every Member State to give effect to your personal right to access to EU documents including EU Brexit negotiation documents.

And here are the Articles:

Article 1

Purpose
The purpose of this Regulation is:

(a) to define the principles, conditions and limits on grounds of public or private interest governing the right of access to European Parliament, Council and Commission (hereinafter referred to as ‘the institutions’) documents provided for in Article 255 of the EC Treaty in such a way as to ensure the widest possible access to documents,

(b) to establish rules ensuring the easiest possible exercise of this right, and

(c) to promote good administrative practice on access to docu­ments.

Article 2

Beneficiaries and scope

1. Any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, has a right of access to documents of the institutions, subject to the principles, conditions and limits defined in this Regulation.

2. The institutions may, subject to the same principles, conditions and limits, grant access to documents to any natural or legal person not residing or not having its registered office in a Member State.

3. This Regulation shall apply to all documents held by an institution, that is to say, documents drawn up or received by it and in its possession, in all areas of activity of the European Union.

4. Without prejudice to Articles 4 and 9, documents shall be made accessible to the public either following a written application or directly in electronic form or through a register. In particular, documents drawn up or received in the course of a legislative procedure shall be made directly accessible in accordance with Article 12.

5. Sensitive documents as defined in Article 9(1) shall be subject to special treatment in accordance with that Article.

6. This Regulation shall be without prejudice to rights of public access to documents held by the institutions which might follow from instruments of international law or acts of the institutions implementing them.

Article 3

Definitions

For the purpose of this Regulation:

(a) ‘document’ shall mean any content whatever its medium (written on paper or stored in electronic form or as a sound, visual or audiovisual recording) concerning a matter relating to the policies, activities and decisions falling within the institution’s sphere of responsibility;

(b) ‘third party’ shall mean any natural or legal person, or any entity outside the institution concerned, including the Member States, other Community or non-Community insti­tutions and bodies and third countries.

Article 4

Exceptions

1. The institutions shall refuse access to a document where disclosure would undermine the protection of:

(a) the public interest as regards:

— public security,

— defence and military matters,

— international relations,

— the financial, monetary or economic policy of the Community or a Member State;

(b) privacy and the integrity of the individual, in particular in accordance with Community legislation regarding the protection of personal data.

2. The institutions shall refuse access to a document where disclosure would undermine the protection of:

— commercial interests of a natural or legal person, including intellectual property,

— court proceedings and legal advice,

— the purpose of inspections, investigations and audits,

unless there is an overriding public interest in disclosure.

3. Access to a document, drawn up by an institution for internal use or received by an institution, which relates to a matter where the decision has not been taken by the institu­tion, shall be refused if disclosure of the document would seriously undermine the institution’s decision-making process, unless there is an overriding public interest in disclosure.

Access to a document containing opinions for internal use as part of deliberations and preliminary consultations within the institution concerned shall be refused even after the decision has been taken if disclosure of the document would seriously undermine the institution’s decision-making process, unless there is an overriding public interest in disclosure.

4. As regards third-party documents, the institution shall consult the third party with a view to assessing whether an exception in paragraph 1 or 2 is applicable, unless it is clear that the document shall or shall not be disclosed.

5. A Member State may request the institution not to disclose a document originating from that Member State without its prior agreement.

6. If only parts of the requested document are covered by any of the exceptions, the remaining parts of the document shall be released.

7. The exceptions as laid down in paragraphs 1 to 3 shall only apply for the period during which protection is justified on the basis of the content of the document. The exceptions may apply for a maximum period of 30 years. In the case of documents covered by the exceptions relating to privacy or commercial interests and in the case of sensitive documents, the exceptions may, if necessary, continue to apply after this period.

Article 5

Documents in the Member States

Where a Member State receives a request for a document in its possession, originating from an institution, unless it is clear that the document shall or shall not be disclosed, the Member State shall consult with the institution concerned in order to take a decision that does not jeopardise the attainment of the objectives of this Regulation.

The Member State may instead refer the request to the institution.

Article 6

Applications

1. Applications for access to a document shall be made in any written form, including electronic form, in one of the languages referred to in Article 314 of the EC Treaty and in a sufficiently precise manner to enable the institution to identify the document. The applicant is not obliged to state reasons for the application.

2. If an application is not sufficiently precise, the institution shall ask the applicant to clarify the application and shall assist the applicant in doing so, for example, by providing informa­tion on the use of the public registers of documents.

3. In the event of an application relating to a very long document or to a very large number of documents, the institu­tion concerned may confer with the applicant informally, with a view to finding a fair solution.

4. The institutions shall provide information and assistance to citizens on how and where applications for access to docu­ments can be made.

Article 7

Processing of initial applications

1. An application for access to a document shall be handled promptly. An acknowledgement of receipt shall be sent to the applicant. Within 15 working days from registration of the application, the institution shall either grant access to the docu­ment requested and provide access in accordance with Article 10 within that period or, in a written reply, state the reasons for the total or partial refusal and inform the applicant of his or her right to make a confirmatory application in accordance with paragraph 2 of this Article.

2. In the event of a total or partial refusal, the applicant may, within 15 working days of receiving the institution’s reply, make a confirmatory application asking the institution to reconsider its position.

3. In exceptional cases, for example in the event of an application relating to a very long document or to a very large number of documents, the time-limit provided for in paragraph 1 may be extended by 15 working days, provided that the applicant is notified in advance and that detailed reasons are given.

4. Failure by the institution to reply within the prescribed time-limit shall entitle the applicant to make a confirmatory application.

Article 8

Processing of confirmatory applications

1. A confirmatory application shall be handled promptly. Within 15 working days from registration of such an applica­tion, the institution shall either grant access to the document requested and provide access in accordance with Article 10 within that period or, in a written reply, state the reasons for the total or partial refusal. In the event of a total or partial refusal, the institution shall inform the applicant of the remedies open to him or her, namely instituting court proceed­ings against the institution and/or making a complaint to the Ombudsman, under the conditions laid down in Articles 230 and 195 of the EC Treaty, respectively.

2. In exceptional cases, for example in the event of an application relating to a very long document or to a very large number of documents, the time limit provided for in paragraph 1 may be extended by 15 working days, provided that the applicant is notified in advance and that detailed reasons are given.

3. Failure by the institution to reply within the prescribed time limit shall be considered as a negative reply and entitle the applicant to institute court proceedings against the institution and/or make a complaint to the Ombudsman, under the rele­vant provisions of the EC Treaty.

Article 9

Treatment of sensitive documents

1. Sensitive documents are documents originating from the institutions or the agencies established by them, from Member States, third countries or International Organisations, classified as ‘TRÈS SECRET/TOP SECRET’, ‘SECRET’or‘CONFIDENTIEL’in accordance with the rules of the institution concerned, which protect essential interests of the European Union or of one or more of its Member States in the areas covered by Article 4(1)(a), notably public security, defence and military matters.

2. Applications for access to sensitive documents under the procedures laid down in Articles 7 and 8 shall be handled only by those persons who have a right to acquaint themselves with those documents. These persons shall also, without prejudice to Article 11(2), assess which references to sensitive documents could be made in the public register.

3. Sensitive documents shall be recorded in the register or released only with the consent of the originator.

4. An institution which decides to refuse access to a sensi­tive document shall give the reasons for its decision in a manner which does not harm the interests protected in Article 4.

5. Member States shall take appropriate measures to ensure that when handling applications for sensitive documents the principles in this Article and Article 4 are respected.

6. The rules of the institutions concerning sensitive docu­ments shall be made public.

7. The Commission and the Council shall inform the Euro­pean Parliament regarding sensitive documents in accordance with arrangements agreed between the institutions.

Article 10

Access following an application

1. The applicant shall have access to documents either by consulting them on the spot or by receiving a copy, including, where available, an electronic copy, according to the applicant’s preference. The cost of producing and sending copies may be charged to the applicant. This charge shall not exceed the real cost of producing and sending the copies. Consultation on the spot, copies of less than 20 A4 pages and direct access in electronic form or through the register shall be free of charge.

2. If a document has already been released by the institution concerned and is easily accessible to the applicant, the institu­tion may fulfil its obligation of granting access to documents by informing the applicant how to obtain the requested document.

3. Documents shall be supplied in an existing version and format (including electronically or in an alternative format such as Braille, large print or tape) with full regard to the applicant’s preference.

Article 11

Registers

1. To make citizens’ rights under this Regulation effective, each institution shall provide public access to a register of documents. Access to the register should be provided in elec­tronic form. References to documents shall be recorded in the register without delay.

2. For each document the register shall contain a reference number (including, where applicable, the interinstitutional reference), the subject matter and/or a short description of the content of the document and the date on which it was received or drawn up and recorded in the register. References shall be made in a manner which does not undermine protection of the interests in Article 4.

3. The institutions shall immediately take the measures necessary to establish a register which shall be operational by 3 June 2002.

Article 12

Direct access in electronic form or through a register

1. The institutions shall as far as possible make documents directly accessible to the public in electronic form or through a register in accordance with the rules of the institution concerned.

2. In particular, legislative documents, that is to say, docu­ments drawn up or received in the course of procedures for the adoption of acts which are legally binding in or for the Member States, should, subject to Articles 4 and 9, be made directly accessible.

3. Where possible, other documents, notably documents relating to the development of policy or strategy, should be made directly accessible.

4. Where direct access is not given through the register, the register shall as far as possible indicate where the document is located.

Article 13

Publication in the Official Journal

1. In addition to the acts referred to in Article 254(1) and

(2) of the EC Treaty and the first paragraph of Article 163 of the Euratom Treaty, the following documents shall, subject to Articles 4 and 9 of this Regulation, be published in the Official Journal:

(a) Commission proposals;

(b) common positions adopted by the Council in accordance with the procedures referred to in Articles 251 and 252 of the EC Treaty and the reasons underlying those common positions, as well as the European Parliament’s positions in these procedures;

(c) framework decisions and decisions referred to in Article 34(2) of the EUTreaty;

(d) conventions established by the Council in accordance with Article 34(2) of the EUTreaty;

(e) conventions signed between Member States on the basis of Article 293 of the EC Treaty;

(f) international agreements concluded by the Community or in accordance with Article 24 of the EUTreaty.

2. As far as possible, the following documents shall be published in the Official Journal:

(a) initiatives presented to the Council by a Member State pursuant to Article 67(1) of the EC Treaty or pursuant to Article 34(2) of the EUTreaty;

(b) common positions referred to in Article 34(2) of the EU Treaty;

(c) directives other than those referred to in Article 254(1) and

(2) of the EC Treaty, decisions other than those referred to in Article 254(1) of the EC Treaty, recommendations and opinions.

3. Each institution may in its rules of procedure establish which further documents shall be published in the Official Journal.

Article 14

Information

1. Each institution shall take the requisite measures to inform the public of the rights they enjoy under this Regulation.

2. The Member States shall cooperate with the institutions in providing information to the citizens.

Article 15

Administrative practice in the institutions

1. The institutions shall develop good administrative prac­tices in order to facilitate the exercise of the right of access guaranteed by this Regulation.

2. The institutions shall establish an interinstitutional committee to examine best practice, address possible conflicts and discuss future developments on public access to documents.

Article 16

Reproduction of documents

This Regulation shall be without prejudice to any existing rules on copyright which may limit a third party’s right to reproduce or exploit released documents.

Article 17

Reports

1. Each institution shall publish annually a report for the preceding year including the number of cases in which the institution refused to grant access to documents, the reasons for such refusals and the number of sensitive documents not recorded in the register.

2. At the latest by 31 January 2004, the Commission shall publish a report on the implementation of the principles of this Regulation and shall make recommendations, including, if appropriate, proposals for the revision of this Regulation and an action programme of measures to be taken by the institutions.

Article 18

Application measures

1. Each institution shall adapt its rules of procedure to provisions of this Regulation. The adaptations shall take effect  from 3 December 2001.

2. Within six months of the entry into force of this Regulation, the Commission shall examine the conformity of Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning the opening to the public of the historical archives of the European Economic Community and the European Atomic Energy Community with this Regulation in order to ensure the preservation and archiving of documents to the fullest extent possible.

3. Within six months of the entry into force of this Regula­tion, the Commission shall examine the conformity of the existing rules on access to documents with this Regulation.

Article 19

Entry into force

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities.

It shall be applicable from 3 December 2001.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 30 May 2001.

For the European Parliament     For the Council
The President     The President
N. FONTAINE     B. LEJON

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