The Euro Crisis and Britain

December the 14th

I have no doubt recent news from Europe, and the results of Friday’s European Council meeting, have raised questions over the UK’s position in Europe. I would like to take this opportunity to address this issue and to clarify my country’s position.

The recent developments in Europe have not changed our trading relationship with Europe. As Prime Minister David Cameron has said, when it comes to trade we are at the heart of Europe. The UK remains a gateway to Europe. We are the preferred destination for foreign investment into Europe and for the location of European Headquarters. Our attraction as such is because we are the easiest place to set up and run a business in Europe, even though we are not part of the Eurozone. We have one of the lowest main corporate tax rates in the EU and our labour market is one of the world’s most flexible with a strong skills base. Britain’s interest in the EU – keeping markets open, free trade, selling our goods and services with rules over which we have a major say – are not changed. There have always been different groups in Europe. We are not in the Euro nor in Schengen. But we are a central member of NATO. We remain fully committed to the EU and committed to work to a more flexible and dynamic Europe. Europe matters to us not least because 50% of our exports go there.

The latest developments stem from the problems of the Eurozone ,the 17 countries out of the 27 members of the EU who have chosen to pool their currencies and operate with the single currency of the Euro. In order to restore the Eurozone’s credibility, its members agreed the need for tighter fiscal discipline requiring them to share even more of their sovereignty. This could either be done by a separate agreement among the Eurozone members or by a treaty covering all 27 EU members. The British Prime Minister, David Cameron, was clear all along that he would protect our national interest. As such he would have been happy to agree a new treaty if certain modest, reasonable and relevant safeguards were obtained. Without such provisions to prevent discrimination in the Single Market, and to confirm EU agreements on the roles and powers of European supervisory authorities, he could not give his agreement to the proposed treaty.

This does not isolate Britain as some might argue. We are not in the Euro and are therefore not affected by the proposals for intervention into member states’ affairs. Britain will still seek to set the pace for the rest of the EU on the agenda of creating jobs in Europe, getting growth going, or what our foreign affairs should be to the rest of the world. This is not a question either of a two speed Europe. European countries work together in different ways. The results from Friday are an example of this. On international issues, for example, Britain worked successfully with France and other partners to protect citizens in Libya. Britain will continue to seek to lead on issues, such a defence, where we can make a difference.

There are those that suggest there is a paradigm shift away from Europe and the West to Asia and that the West faces an inevitable decline. I would counsel care in reaching any such conclusion. It would be premature to write off Europe which remains a region of ideas, creativity, innovation, world class engineering and cutting edge technology and home to some of the greatest universities in the world. Of course Asia is where we are seeing unparalled growth and it is where we all need to focus appropriate attention for our businesses and industry. Britain is active in these emerging economies too. We are a top 5 investor in both China and India and China and India are top 5 investors in the UK. We are working hard to support British businesses to succeed in these markets and to look for new opportunities in them. But our connections in Europe remain important. At the core of these are a set of shared values, indeed the same values that we share with New Zealand and New Zealand with us - freedom of speech, a free and open media, the rule of law, transparent governance structures and accountability through parliamentary democracy. We should not under-estimate the importance of these values at the heart of our bilateral relationships and the common understanding we share as a consequence on the key global agenda issues that matter to our people.

Mrs Vicki Treadell,
British High Commissioner to New Zealand .

ENDS

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