Brexit would open world digital gateway for Europe

Berlin

AT a mid-January conference of the British Chamber of Commerce in Berlin, a German partner of an American law firm began to list all of the laws and regulations that would have to be changed if Britain left the European Union. As the list went on, the next speaker - David Owen, Britain's former foreign secretary - pulled the partner up, proclaiming that Britain's relations with Europe could never be reduced to an inventory of laws.

Both sides in the debate over Britain's continued membership of the EU appear to be increasingly overlooking the obvious logic behind this statement. Supporters of "Brexit" argue that the UK is being smothered by a Brussels bureaucracy that, if not throttled, will destroy the British character. As if a few hundred Brussels bureaucrats could ever stifle the British lion's roar.

The anti-Brexit crowd is painting all sorts of doomsday scenarios, beginning with the catalogue of laws and ending somewhere south of Britain's decline into a nation of sheep farmers. An OMFIF commentary by Jacques Lafitte and Denis MacShane on Feb 9 appeared to suggest that, without the benefit of EU membership, Britain and Europe would become increasingly isolated from one another.

This overlooks a few facts that make the picture look more benign. Britain is on track to overtake Germany in population within a few decades, and is already the continent's second largest economy with a worldwide financial network the rest of Europe can only dream of emulating. Add to this a language that has rapidly become the world's common means of communication, colonial era ties to all corners of the globe, a continued sense of strategic responsibility, a world class university system and centuries-long integration into Europe's economic life.

The commentators on Feb 9 appear to have forgotten that an estimated 350,000 French nationals live in the UK (not to mention around 274,000 Germans). European banks, investment funds and corporations have established their de facto headquarters in London, drawn not by the appeal of EU integration but the prospect of escaping it. They enjoy the freedom, creativity and flexible financial markets they miss at home. Rather than shrinking if Britain voted to leave, their number would probably grow even faster.

The real threat of Brexit is probably not that Britain would be isolated, but rather the creation of an offshore Europe on the shores of the wet, foggy isle. Globalisation and integrated information technology networks have made national borders increasingly irrelevant.

As the continent continues to isolate itself from the explosive US information technology sector, Britain would find a perfect role as Europe's gateway to the digital world. One chuckles to think of EU bureaucrats attempting to block financial traffic to Britain across networks routed through Singapore or possibly Tel Aviv. OMFIF

The writer, a former US ambassador to Germany, is senior counsellor at Noerr LLP and a member of the Official Monetary and Financial Institutions Forum advisory board