The EU Referendum The first point is that the debate must be nuanced; there is no cast iron argument for remaining or leaving the EU. There are perfectly good reasons for staying and some equally valid arguments for leaving. The second point is subtle; this is not a debate about joining the EU but one about leaving. The debates are not the same. Just because Norway and Switzerland cope perfectly well outside the EU is not an argument for leaving, but a better one for not joining. Leaving has a not inconsiderable cost in that treaties will need to be renegotiated, and the UK may not get the same terms as Norway and Switzerland currently have. Other countries have invested in the UK because we are in the EU and may move elsewhere (or they may not but that is a risk). The actual financial costs to the UK of membership are small if not trivial. The economic costs are somewhat larger due to the Common Agricultural Policy and Common Fisheries policy. The CAP has been a huge liability on all European economies for decades albeit less than it was. The CFP has hurt UK fishing communities hard though whether this is a ‘cost’ is more debatable. Some advocates for leaving argue that high external tariffs for the EU have a cost for the UK – for that to be valid one has to believe that UK tariffs post exit will be low. The other substantial argument against the EU is monetary union, which as a result of its poor design has exerted powerful deflationary pressures on Europe and elsewhere. Fortunately the UK avoided that the worst of that disaster so it is not very relevant to this debate. Ultimately, it is almost impossible to reach a convincing conclusion on the economic benefits of leaving; the most sensible one is that there will be short run costs with uncertain long run gains. Dissatisfaction with the EU is considerable and not just in the UK; a lot of Europeans are very unhappy with the EU but that is common to most political institutions and is not necessarily an argument for leaving. There is a lot wrong with most political institutions. The American constitution is often reckoned to be the role model for the rest of the world but that does not mean one has to admire the current state of US politics nor does it mean that individual states have the right to secede whenever they disagree with other states. Curiously the one area where the leavers have the most momentum is the one where they are wrong, i.e. immigration. There is no evidence that immigration ‘costs’ the UK and indeed probably brings a net benefit. Migrants are relatively young, of working age and work hard. They may use the social security system but relatively less than UK born citizens. They may put pressure on social services in terms of use, but they probably contribute more towards paying for these services. In other words, these services would have been struggling even more financially if it were not for the migrants. The other area where the leavers are on weak ground is the one of sovereignty and regulation. We all live in an interdependent and connected world and no bad thing either. The question of so called excessive EU regulation demonstrates this. There is no evidence that EU forces unnecessary regulation on the UK; much of the regulation that so many resent is actually UK derived in the first place and anyway being outside the EU does not mean the UK can ignore EU regulation. We would need to conform in order to trade whether we like it or not. There is one area where sovereignty is paramount and that is the UK’s ability to issue currency. And that is something we have not surrendered nor are we much likely to, whatever the EU might say. As I said at the beginning, if the question was one of joining the EU, the answer might well be no thanks. As long as the UK pursued sensible economic policies, and kept the economy open, it is probable that the UK would flourish outside of the EU. But that is not the question. Divorce entails costs and it is quite possible that these could be substantial. None of the UK’s allies want us to leave, most notably the Americans and any notion of a ‘special relationship’ with the US is delusional. Ultimately the answer is to beware of what you wish for.