Tuesday 24 October 2017

Even Brexit campaigners want to stay in EU's single market

Sean Duffy

The so-called Brexit referendum has provided evidence of deep divisions in the UK, but regardless of their view on relationships with other EU institutions, almost all voices in the British debate want the country to retain access to the European single market.

It's hardly surprising. The combined EU economy is now bigger than the US. The bloc accounts for around 20pc of global trade, well down on its peak, but still disproportionately big for the population. Most trade in the EU is internal and yet it still manages to be the world's biggest exporter.

While much of the focus in Europe in recent weeks has been on the UK, Germany remains the engine behind EU economic output.

The country generates 20.8pc of the EU's total €16.25 trillion economic output, according to figures from the World Bank.

If many Europeans have been falling out of love with the EU, not just in the UK, it's in part because the central role played by Germany in the economy means it has found itself in the role of schoolmaster in Europe since the onset of the financial crisis.

Minister for Finance Wolfgang Schauble has insisted on tough austerity measures for those countries who have found themselves in need of assistance from the EU.

He can point to the fact that his country accounts for 17.2pc of the total workforce across the EU as an example to those countries that he classes as profligate.

The UK is the second largest economy in the Union, accounting for 16pc of all output. Crucially for the Union, Britain's output and population are growing. As things stand, it will surpass Germany on both counts in the relatively near future.

In contrast, Germany's population has peaked, its workforce is in decline and within decades a falling population will leave the European powerhouse feeling increasingly empty.

There are currently 31.6 million people at work in the UK, which accounts for 13.2pc of the EU total. If markets have been justifiably jittery about the prospect of Brexit over recent weeks, the rest of the EU can't relish the long term implications of losing arguably the most dynamic big economy in the bloc.

The French economy accounts for €2.52 trillion of the EU. It's the third largest economy in the EU, coming in narrowly behind the UK, but it's seen by many as the sick man of Europe.

French labour laws have been the subject of intense scrutiny this summer with widespread strikes and disruption caused by workers unhappy with changes Socialist leader Francois Hollande thinks are needed to wake the sleeping economic giant.

Italy, another pivotal player in the overall European project, accounts for 11.5pc of the EU economy and 8.78pc of the EU's workforce.

Even more than France though, Italy its struggling to emerge from a long term economic malaise that has seen the former industrial powerhouse drift away from the premier league of even Euro area economies.

Spain is grappling with a prolonged jobs slump, and with elections this weekend, the focus thereafter will be on the new government's ability to get the nation's youth into work.

Despite only having 0.88pc of the entire European workforce, Ireland generates 1.35pc of the EU economy - much of it a result of our massive two-way trade with our nearest neighbours in Britain.

Irish Independent

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