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Communicating the costs and benefits of the EU

Written by Mikaela Gavas

On 8 October, the Deputy Prime Minister and leader of the Liberal Democrats, Nick Clegg, laid out his case against Britain leaving the EU. Apart from his core proposition that leaving the EU would be economic suicide, he made two other stark points: that the ‘ludicrous mythmaking’ around the EU needed to be challenged; and that the only way to shape change in the EU and (to shape change in the world) is by engaging in it.

A cost–benefit analysis

It is not exactly news that we live in an era of polarised politics. Certainly, much of the debate around UK membership of the EU is driven by partisan debate, sometimes based on very selective evidence and reliant on simplistic sound bites. But everyone has come to agree on one issue: the essential need for cost–benefit analysis of UK EU membership. The problem is that there appears to be little authoritative data on the potential cost of a decision that could fundamentally change the UK’s relations with Europe and have an enormous impact on its political, economic, environmental and social future.

Enter Regent’s University. The University has commissioned independent practitioners to provide accessible, informed, evidence-based analysis, outlining the costs and benefits for each policy area of a changed status in the relationship between the UK and the EU. This is the first of its kind and seeks to answer scientifically the question of what the UK stands to gain or lose from withdrawing from the EU. The report will be launched today, but the hard work begins now. Communicating the messages of the report in the run-up to a UK referendum on EU membership will be a long-term, ‘image-building’ process.

A multilateral approach to development cooperation

But what of development cooperation in particular? Given the global nature of development challenges, it is not difficult to make the argument that multilateral action and an investment in collective action is required. Yet, governments face increasing pressure to limit multilateral aid, which often appears too far removed from control and oversight. However, there are real efficiency gains from pooling resources including spreading the aid burden and leveraging experience, sector- and country-based expertise and geographic reach.

The EU’s comparative advantages

From a UK perspective, the EU offers many distinct comparative advantages as a channel for UK aid and as a means of securing UK development objectives. In volume terms, the EU is largest multilateral player in the world, disbursing some €12 billion per year, and is present in around 140 countries in the world. The EU’s economies of scale reduce administration costs and allow the UK to be involved in many more countries (including a number of Commonwealth countries) than its current 27 priority target countries. The UN and its agencies have a global political authority, but not the capacity to disburse on the scale or with the variety of instruments available to the EU. The World Bank and other multilateral development banks have the financial resources, but neither the voice on trade, nor the role in foreign and security policy that the EU has. The regional development banks lend long term but generally do not engage in humanitarian crises as the EU does. The EU has a depoliticised persona that enables it to provide aid directly to non-state actors. Both the UK and the EU highlight growing private-sector involvement as key to future development assistance, but only the EU has the variety of instruments allowing for international political and economic partnerships, ‘aid for trade’ expertise and the blending of grants and loans. Meanwhile, the EU’s experience in regional integration and cooperation, and institutional capacity-building, offer it a political weight that the UK cannot match.

Member States pursue different objectives through the EU: multiplying or projecting influence, extending geographical reach, benefiting from economies of scale, or improving efficiency or impact. Some Member States also value the role of the EU in: raising the level of performance of other Member States; the growth of shared expertise in development cooperation; the potential for joint working, which eases the administrative burden on recipient countries; and the ‘safety valve’ mechanism, allowing Member States to act independently on issues they feel strongly about.

Constraints of EU membership

On the other hand, multiplication of actors in the collective increases the likelihood of ‘spreading too thinly’ in order to satisfy Member States’ engagement on development issues. Member States try to shape EU development policy by ‘uploading’ their policies and objectives to the EU level. They usually have different external-relations priorities that influence their preferences concerning where development investments should be directed. Thus, EU policy tends to be a compromise or composite of many Member States’ policies. The result is an EU development programme with an overloaded and broad agenda, operating in almost every country in the world.

If the Member States’ views converged more about how far to use the EU as their instrument of choice in development policy, they could reasonably work towards an agreement on the optimal division of labour based on the principles of ‘complementarity’, ‘subsidiarity’ and ‘comparative advantage’.

The bottom line, however, is that there are genuine benefits to working together over the long term, creating a culture of trust and mutual respect in which defection from the collective is hard. Severing its ties to the EU on development cooperation could cost the UK considerable international influence.

The challenges ahead

There are urgent challenges on the horizon. These include a final agreement on the post-2015 development agenda and a global deal on climate change. The UK will be looking for the EU to respond to a changing development agenda and play a constructive role in global development discussions. The biggest challenge, though, is that the EU is substantially weaker now than it has been at other points in history, particularly because the most visible symbol of its unity – the euro – is in crisis, making people question the credibility and merit of EU-based solutions. This will, however, change over time, and decisions on the future of the UK’s relationship with the EU should be taken on the basis of not just the here and now but also on what might reasonably change in the medium term – not least the new EU leadership team and the new European parliamentarians expected to come into office in 2014. The most important thing the UK (and other Member States) could do, at this point, is to ensure heavyweights take up the helm of the EU.