Monday

18th Feb 2019

UK exit better than staying in unreformed EU, says report

  • London accounts for over a fifth of the UK's economy (Photo: Adolfo PM)

A UK exit is better than remaning in an un-reformed EU, according to an upcoming report commissioned by London mayor Boris Johnson.

But the report, drafted by Johnson’s chief economic adviser Gerard Lyons, also warns an exit could cost London over a million jobs if the City fails to set up new trade policies.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The report set for publication on Wednesday looks at how the City’s economy could develop in the next twenty years under four different scenarios.

The best option is to stay with the EU if it reforms in line with the UK wishes. The second best is to leave but with new outward looking policies of its own in place to buffer job loss.

“The best economic scenario for Britain over the next 20 years is to be in a significantly reformed European Union,” Lyons told the Sunday Telegraph.

He noted a “very close second” option would be to leave the EU on good terms while “adopting sensible outward-looking trading policies”.

“Our detailed study shows it’s definitely a viable option for the UK to be outside the EU,” said Lyons.

The Sunday Telegraph cites figures in the report which indicate that London, at €440 billion, contributes to around a fifth of the UK’s gross domestic product (GDP).

It says London’s GDP would increase to around €800bn by 2034 should Britain stayed in a reformed EU.

An exit on good terms and outward-looking trade policies would boost it to around €770bn while the status quo would result in around €620bn over the next twenty years.

The worst-case scenario is to leave the EU without adopting any outward looking trade policies.

London’s projected growth by 2034, under this scenario, would be significantly less at around €540bn with over a million people in London possibly losing their jobs, reports The Financial Times.

The conservative mayor is set to back the conclusions in a speech on Wednesday on how to reform the EU to the benefit of London.

Johnson, in an a column in the Sunday Telegraph, noted the “costs of EU social policy, the stagnation of the EU economies, the continuing absurdities of some Brussels regulation” as reasons why the UK should leave the EU if it does not reform.

“As it happens, I have no doubt that we can lead the campaign for reform. But if we are going to succeed, we need to build on our alliances, and to appreciate how our friends on the continent see things,” he wrote.

The report comes ahead of British Prime Minister David Cameron promised 2017 EU referendum should the conservatives win next year’s general election.

Cameron has promised to crackdown on unemployed EU migrants and so-called “benefit tourism”.

Cameron’s cabinet reshuffle last month is also seen by some as another indication the UK is distancing itself from the EU.

The move saw him nominate a junior minister for EU commissioner. His new foreign minister, Philip Hammond, has also advocated withdrawing from an unreformed EU.

Sluggish procedure against Hungary back on table

EU probes into Hungary and Poland on rule of law and democracy are back on the agenda of EU affairs ministers - but with little guidance from the Romanian presidency, without a clear idea where the procedures are headed.

Calls for Tajani's resignation over Slovenia, Croatia row

The European Parliament's Italian president referred to Croatia and Slovenia as former Italian regions at the weekend, sparking outrage. Although Antonio Tajani apologised, somer former leaders and MEPs are now calling for his resignation.

MEPs call on EU countries to deal with Hungary

MEPs who launched a procedure examining the democratic situation in Hungary last year now want member states to step up efforts. The government in Budapest meanwhile accuses MEPs of attacking Hungary over migration.

Analysis

France and Germany hope to revive EU with Aachen treaty

In the face of attacks on the liberal world order and the EU, Angela Merkel and Emmanuel Macron renew German-Franco cooperation - but their lack of political capital prevents bold visions or ambitious goals.

News in Brief

  1. EU ministers call climate change 'direct and existential threat'
  2. Seven MPs leave Britain's Labour Party
  3. Czech PM: May's EU elections 'most important ever'
  4. 'History will judge us': May tells MPs on Brexit
  5. Trump warns EU on release of Islamist fighters
  6. Venezuela expels 'conspiratorial' MEPs
  7. Holocaust dispute upsets Israel's EU lobbying
  8. Spain's Sanchez calls snap election on 28 April

Opinion

Italy will keep blinking in 2019

Italy's 'marriage of convenience' coalition government likes picking battles with Brussels. But with the economy now in recession, and deputy prime minister Matteo Salvini needing to keep the business lobby on board, expect Rome to blink first.

Opinion

The test for Sweden's new government

While the formation of a new government ends Sweden's fourth-month paralysis, it doesn't resolve the challenge from radical-right populists in Sweden. A key question remains: will treating populists like pariahs undercut the appeal of their, often anti-rights, politics?

Stakeholders' Highlights

  1. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  2. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  3. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  4. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  5. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  6. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  7. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  8. Nordic Council of MinistersSeminar on disability and user involvement
  9. Nordic Council of MinistersInternational appetite for Nordic food policies
  10. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  11. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  12. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”

Latest News

  1. Merkel defends Russia ties, ridicules Trump on cars
  2. British MPs condemn Facebook CEO's misrule
  3. EU's chance to step up on Hungary and Poland
  4. ESA pushback against new EU space agency plan
  5. Sluggish procedure against Hungary back on table
  6. Could Finnish presidency fix labour-chain abuse?
  7. Brexit and trip to Egypt for Arab League This WEEK
  8. Belgian spy scandal puts EU and Nato at risk

Join EUobserver

Support quality EU news

Join us