There’s been a lot of debate of late about Europe, and the possibility of a UK referendum of EU membership. Much of this is political, and revolves around law-making in Brussels vs Westminster but some of it comes down to economics and trade.
There’s an awful lot of blather, misrepresentation and misdirection in these debates, often shot through with vitriol and passion. The media don’t help, as they love a good doom and gloom story, or the chance to spice up a headline with what effectively boils down to lies. I imagine some news editor saying something like “Nothing gets the great unwashed into a fervour more than smelly Europeans telling them what to do”. We’ve had stories about regulation on sizes and shapes of fruit and all sorts of nonsense, which hardly helps an informed debate about our future relationship with one of the largest trading blocs in the world.
Now, leaving the politics to one side, there’s an awful lot of rot spouted about the impact our membership or withdrawal from the EU community would have. Some proponents of staying in Europe say that if we leave, thousands of jobs will disappear a European countries withdraw from the UK and sales into Europe plummet. This is plainly not the case. Equally those that want to leave say that membership of the community is stifling our growth, giving us minimal benefits for a huge cost, saddling us with economic migrants that we cannot refuse into the country and so on. Once again, this is equally untrue.
The real story is that countries will still trade with us if we leave, migrants will still come to our shores and businesses will still stay or pull out according to their own devices. Of course membership will have an impact, otherwise why would anyone stay, but the truth is there is no simple black and white with the modern world as it is. There are thousands of politicians, diplomats and business people working on agreements, trade charters, business deals etc all over Europe, and they will adapt to whatever current economic conditions they find themselves in. Trade will continue, maybe at better terms for some things, and worse for others.
The same sorts of argument have been paraded for changing conditions for bankers in London (and elsewhere) – this argument that we must maintain the status quo to retain the “best” talent. I’m afraid I’m not a subscriber to this particular line – I’ve always believed in rewarding achievements, not political connections or how many of the old boys you know. I don’t see what benefits these extremely wealthy bankers on several million pounds a year are bringing to their organisations (many of which had to be rescued with public funds) that justifies their existence. They presided over one of the biggest economic foul-ups in human existence, yet many retain their roles and salaries, and even when they go they enjoy huge payoffs. Even when gone, the positions remain, filled by the next wealthy individual to perpetuate the system.
Personally I think that you could get someone for a tenth of the salary, and I don’t think they would be delivering only one tenth of the achievements. I’m sure many extremely competent business managers would work well in these roles and be very grateful for a six-figure salary and a performance-related bonus. So what if the uber-paid bankers run off to Lichenstein or America, is the city going to collapse or banks suddenly not function? Of course not – they will carry on, and have more funds freed from not paying colossal salaries. Excellent talent from outside the city could actually start deep and searching reform, as they look at fundamentals of how the business runs.
Of course, this won’t happen, as there are far too many vested interests involved – both in the European Community and in modern banking. Unfortunately for business and the wider economy, matters like this are rarely stripped back to the bare essentials and built up as required for the current economic and political climate. Whatever does happen, in or out of Europe, life and business will still continue, and there will be winners and losers as there always are. The best we can probably hope for is that we can look at things objectively, make some reasoned decisions and mitigate their impacts where necessary – we’ll have to wait and see whether that’s the case or not.
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