Sunday, 6 August 2017

Brexit: reflections from Croatia

Well, I'm back. And it doesn't look like I have missed anything. The debate has not progressed. For that reason I could not have picked a better time to go on holiday. This is one of the few times where taking a break was a good idea. Croatia has given me some things to reflect on.

Had I been working to my own schedule I would have perhaps chosen a more educational itinerary but the company I'm keeping these days insisted that deep sea snorkelling and kayaking was a better idea. It was. As it happens it was far too hot to do anything else so we stayed near Dubrovnik for the whole time.

If I could say anything of Dubrovnik, is that it's generic Southern Europe. The old town inside the fortifications is the only interesting bit. The rest is all soviet era apartments and hotels. It's heaving with tourists and smells like an open sewer. While one might argue that this is only to be expected from a tourist concentration camp in a heatwave, these such things are primarily a matter of engineering and standards. And that is one thing Croatia is lacking.

Just opposite the guest-house we stayed at there was a recycling depot where plastic bags full of bottles and cans were lying in months old heaps, rotting in the baking sun. There are frequent power cuts, and the landscape is peppered with abandoned developments - which rather suggests a good deal of money laundering is going on on the Dalmatian coast. What one also notices is that the construction techniques wouldn't be signed off by any British buildings inspector in a billion years.

For a Western European it is sometimes easy to get carried away with the idea that Europe is a wealthy first world continent. It isn't. Southern Europe is a basket case where many coastal towns have no economy other than tourism and shut down for the winter months. Croatia especially is still a developing country.

From the super-yachts in the harbour it's clear that there's no shortage of money sloshing around but it doesn't get as far as the local economy and corruption remains a major issue for the country. The only truly modern western structure built to a decent standard is the airport - which is festooned with EU flags. It leaves you in no doubt that you are entering EU occupied territory.

As to everywhere else, you see the Croatian flag absolutely everywhere - even painted on to the cliff faces. There is no shortage of national pride and a strong sense of Croatian identity. Hardly surprising given Dubrovnik's recent history.

In this there is a strong feeling of euroscepticism in Croatia. I spoke to a few of the locals who regarded the EU as something of an economic necessity but it is neither liked nor trusted. Like the Greeks they see the EU as a money pot and one that is tolerated. I rather suspect as the fanfare of accession dies, and lingering problems continue unabated we will see a stronger strain of euroscepticism. In Ukraine the EU has demonstrated that when it comes to fringe interests it will not go the extra mile to protect territorial interests. Croatia could just as easily be hung out to dry.

What I saw in Croatia though was a good deal of untapped potential. It's an ideal climate for fruit growing - figs and pomegranates especially. The many hillsides could be turned over to agricultural use providing an income other than tourism.

I did mention this to the hotelier who was personally against the idea of economic development simply because Croats are gradually being squeezed out of their own city and sooner or later the quiet suburbs would also be bought up by developers. Given how development money has been squandered thus far, there is a tone of cynicism. The planning system is virtually non existent, bureaucratic and corrupt. As the Economist puts it, Croatia is the EU's newest basketcase.

What Croatian needs more than anything is good governance - but not being a member of the Euro it is not a priority, nor does the EU have any particular leverage. Croatia will not reform if it doesn't want to. And one rather suspects they don't. In a lot of ways, my Croatia experience has made me even more sceptical of the EU. It makes big promises but does not deliver.

It also brings home the absurdity of the EU vision of homogenising labour rights and standards throughout. Obviously being a different climate with most of the locals shutting down for the hottest part of the day, there is a different work culture and a different work ethic - and outside of the tourist traps where there are tips to be had, and the hospitality sector, customer service as a concept doesn't really exist.

The same inherent problems found in the third world can also be found in Croatia. The lack of a mature business culture prevents the establishment of dependable supply chains. Suppliers don't get paid and businesses fold. Chuck freedom of movement into the mix and you have a major brain-drain going on, where Croatia is haemorrhaging professionals who seek a better life elsewhere.

This is why you have to laugh when the LSE publishes a piece saying that "Creating a ‘multi-speed Europe’ would divide the EU and diminish it as a foreign policy actor". This does rather overlook the fact that we already have a multi-speed Europe defined by various levels of crisis where the EU is either putting out brush fires or simply ignoring the issues. As much as the vision behind the EU is wholly unrealistic, the European unity that exists, exists solely among Europe's political elites and the basket cases out with the begging bowl. It is not a union of European peoples. That exists only in the imagination of British liberals.

It's easy to see why as well. The other week I was at a Bristol for Europe meeting where the formidable Dr Mike Galsworthy remarked that "there are no foreigners in science". In his little corner of science and academia there are continuous interactions between European intellects, all working inside the same framework. This to me is déformation professionnelle, in that this dynamic also exists without political union - and not even involving the EU.

Ultimately to the well-to-do remainer crowd are not arguing for the EU per se, rather they are arguing to preserve many of the conveniences that the EU affords them - and only them. Dr Galsworthy spoke of how the EU provides a funding framework all under one roof. This to me though is part of the problem. Science should not be filling out bids so that the EU can pick winners. For science and innovation to advance it needs to be out interacting with the commercial world and taking risks, less it become hopelessly dependent on central grants, working on projects designed to enhance the EU's image as a benevolent entity.

The reason this tangent is important is because the modus operandi of the EU has always been to win over civil society by capturing the institutions and funding those most likely to pave the way for further political integration. This is partially why there is such a yawning disconnect between politicians, academia and the public. The EU is a construct that most favours those who already enjoy considerable privilege. This is why populations throughout Europe have been dragged further into political union without their consent. This, above all, gives rise to the sort of nationalism that our metro crybabies so dislike.

Ultimately the nationalism on display here in the UK, and Croatia, is an expression of ownership. It says "this is ours, we live here, the authority should be ours". Having faced attempts at annexation to Montenegro, Croatian identity is stamped all over Dubrovnik. The same dynamic goes some way to explaining why those regions of the UK in receipt of the most EU funds would vote to leave. The EU has a propensity to stamp its own flag and brand on everything it touches.

In a lot of ways the Brexit debate is defined by identity. There are those in academia who self-identify as European because of the circles they move in, whereas we plebs from the regions must simply accept our fate and allow a superheated economy to rob us of much of what we value. Landscapes, community and a degree of control over our environment. For many these things matter more, and the principle matters more than the marginal GDP growth that comes with continued EU occupation.

But all this got me thinking about post-Brexit Britain. We are told we will have diminished influence, but assuming we can negotiate a comprehensive settlement, I don't think the point stands. As far as standards and regulations go, Britain is still going to be an important voice.

The one thing we have mastered is civics. I remember during the referendum that we were told that without the EU we would row back on forty years of regulatory progress where Cornish surfers would once again be swimming in raw sewage. As I understand it, there is still work to be done in that domain but councils very much understand the importance of tourism and special interest groups armed with the internet can bring change about far faster than the EU can legislate. Brits are geared to it. We complain and campaign. That democratic participation thing.

As EU members that participation element is diminished as the agenda is increasingly set by astro-turf NGOs - and rather than lobbying for direct change, they use the EU to bring court cases. Democracy is being shunted into a siding by vexatious judicial activism. This is why we are starting to see "authoritarian" backlashes against the EU and international NGOs. This is commonly described by British media as Europe becoming more illiberal. I don't think it is that clear cut. There is a very real sense that authentic values are being eroded, having the values of our elites superimposed on our democracies and then policed by political correctness.

In the same way that modern radical leftist feminism is turning the clock back for women, the EU's impositions are proving to be a bridge too far for many socially conservative eastern European nations, who, I believe, will turn toward Russia - especially if the EU insists on forcing them to take refugees they don't want. It will feed a radical far right who makes our own far right look like the Women's Institute.

A week in Croatia has been a real eye-opener for me. Culturally, economically and politically there is virtually zero convergence. Britain will remain a choice destination for business and an influential voice in regulation purely because we are a diverse economy in a temperate climate with the rule of law in our DNA. Britain will recover much of what it loses from Brexit long before we see any real reform in Southern Europe.

Right now we are being subjected to a torrent of propaganda from the EU, painting the picture that the EU has a new found spring in its step - and attitudes to the EU have never been more favourable. I rather get the feeling that this is a political class in deep denial. The EU's purpose is unrealisable, politics on the ground is travelling in a different direction and there are shifting tides globally.

For a time, a favourable exchange rate made the UK attractive to Polish workers - and we are told that Brexit will lead to fruit crops rotting in fields. There is more to it than just Brexit. Poland itself is now reaching a stage of development where it is reliant on immigrant agricultural labour for the same reasons the UK is. The young have higher expectations.

Then of course there is the gradual redundancy of the EU. This blog has detailed many times how the centre of the regulatory universe is shifting to Geneva, and in those circumstances where Brexit, and controls on freedom of movement, throw up extra red tape, quite a lot of it is resolvable through technology. The internet has revolutionised airports where data transactions are now done in advance and all that's needed on the gate is the beep of a barcode. In a lot of ways technology and globalisation is surpassing the EU and is ahead of the game.

I won't deny that the systems and mechanisms for cooperation inside the single market most certainly facilitate such developments but in many cases are an inhibitor to wider participation - feeding a growing sense of dissatisfaction in the rest of the world. As the EU is gradually usurped as the leader in trade liberalisation systems and its philosophy increasingly useless and unwelcome, it is difficult to see it having a long term future. Certainly it will have to radically change if it wants to survive.

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