ALEX BRUMMER: EU’s tarnished halo

A visitor from Mars in 2022 would conclude that leaving the European Union was the biggest catastrophe ever to befall Britain. 

So vociferous have the critics been, and so idealised is the view taken of the EU, that our alien guest would receive a totally distorted view. 

It has been a hugely difficult year for Britain. Three prime ministers, the death of a much-beloved monarch and an energy-driven inflation crisis. 

All have set the global Britain agenda and a new relationship with the EU back. The British Chambers of Commerce, representing smaller firms, is right to campaign on sweeping away the customs red tape. 

Yet turn its survey numbers on their head and more than half the firms questioned have adjusted in spite of lack of bandwidth in UK government and Brussels and Paris intransigence. Reconciling to new arrangements takes time. 

I recall the vociferous complaints from the business world over the vast cost of changing systems and regulations to EU standards and the loss of Commonwealth trade preferences when the UK joined the Common Market five decades ago. There currently is a tendency to view our neighbours through rose-coloured glasses. 

Holidaying in Italy, Greece or Nordic nations such as Sweden is always pleasurable. Personal experience suggests that the queue for UK and other non-European passport holders can be as speedy as that for EU citizens. 

The populist politics of many of these nations, including France, should be as big a matter of concern as it is in Trump’s America. Boris Johnson is condemned by critics of being of the same ilk. 

However, his political tendencies from raising national insurance to pay for the NHS (reversed by Kwasi Kwarteng and not restored by Jeremy Hunt) could not be regarded as populist. On social issues, he clearly is on the liberal spectrum. Contrast Britain and the Tories with the EU. 

The EU’s high-flying Greek vice-president Eva Kaili was forced from office this month after being charged following a corruption and bribery investigation involving Qatar. 

The often-admired Swedish social democracy model is going up in flames. The right-wing Swedish Democrats, with neo-Nazi origins, supports the ruling coalition, in exchange for adopting policies it favours. 

It recently won the prime minister Ulf Kristersson’s support for legislation which makes it easier to revoke residence permits for immigrants.

In Italy Giorgia Meloni, representing a party directly descended from Mussolini’s fascists, is prime minister. She and her party are at war with Brussels over its effort to dictate economic policy, in exchange for EU funding.

Meloni and colleagues are also angry over the European Central Bank decisions to raise interest rates and tighten monetary policy. This, added to the burden of financing Italy’s debt mountain of 147 per cent of total output (in the UK it is 101 per cent of GDP and on course to drop). 

President Macron’s hold on power in France is increasingly fragile. He looks over his shoulder at Marine Le Pen’s National Rally, which holds 89 seats in the National Assembly, and is gaining traction in polls. 

France is fond of coming up with grand ideas on how Europe could be better run. 

But Macron is the only major member of the EU which is reprimanded by the International Monetary Fund for a rising trajectory of its national debt. 

It spends as much on interest payments as education and borrowing, at 112 per cent of GDP, which ranks only behind Greece, Portugal and Italy. 

Reuters reports that French Treasury officials fear a ‘Truss moment’ when the country loses the confidence of bond markets. 

Perhaps the best measure of alarm about the state of the EU economy is the German bond market, generally regarded as the gold standard. The yield on the ten-year German bund jumped by 2.6 percentage points in 2022. That represents the biggest sell-off of German bonds since the 1950s. 

Britain’s gilts market was brought to its knees by Trussonomics. Slowly but surely it is coming out the other side. 

The EU faces extraordinary political challenges from the far right, which in turn prevent governments taking the drastic action needed to fix ballooning deficits. 

Britain is showing a willingness to fix its own budgetary problems and may yet find space for a new growth agenda.