In a recent report, if Britain decides to leave the European Union (EU), British households will become £933 richer, because taxes will be lower, and food and clothing will be cheaper. But the trade off is not entirely good news, since there would be restrictions of UK citizens who wish to work and live in other EU member states. This could mean millions of jobs lost and the loss of freedom to live wherever they please. A pro-European newspaper, The Observer, also claims that tax avoidance and evasion will become a major problem. This only shows that European Union exit can result in advantages and disadvantages for Britain. The same thing is true for other member states that wish to break the bonds.
The European Union is a political and economic union made up of 28 member states that are primarily located in Europe. It operates through a system where decisions are negotiated through supranational institutions and intergovernmental organizations. A standardized system of laws that apply to all members was developed, turning it into a single, integrated market and economy. Its policies are designed to maintain common regulations on trade, regional development and other sectors, ensure free movement of goods, people and services, and enact legislations. 26 out of 28 member countries have a very high Human Development Index, and the EU has the largest economy in the world. Despite what seems like a beneficial union, there are drawbacks to the partnership.
List of Advantages of the European Union
1. Freedom of movement.
Citizens of all member states are free to move from one member country to another. They can travel, study, work or live in any EU state of their choice. If they choose to move within the Schengen Area, which comprises 26 European countries, they can do away with using a passport, visa or other travel requirements. This is because the Schengen Area is considered a single country for international travel purposes and only uses a common visa policy. This provides citizens of Member States plenty of options to travel, find work, study and relocate whenever and wherever they choose.
2. Better jobs and workers’ protection.
British citizens, for example, have the option to work locally or at any of the EU countries, which means more job opportunities to choose from. This is especially true that global manufacturers are moving their businesses to EU countries because of lower operating cost. So imagine what would happen if Britain breaks off from EU, effectively cutting off their access to Member States and employment offers.
EU has also developed the Working Time Directive that protects the rights of workers employed in any of the EU member countries.
- Weekly work hours must not exceed an average of 48 hours, including overtime.
- Every 24 hours there should be a minimum daily rest period of 11 hours that must be used consecutively.
- Those working longer than 6 hours are entitled for a rest break.
- In addition to the daily rest of 11 hours, there should be a minimum of 24 uninterrupted hours of rest for each 7-day or one week period.
- There should be at least 4 weeks of paid leaves per year.
- Those working nights are entitled to extra protection, including free health assistance, transfer to day work under certain circumstances, an 8-hour limit on heavy or dangerous work, and an average of 8 hours of work per 24-hour period.
Although the directive has negative implications on certain jobs, such as the armed forces, managing executives, and mobile workers, it is generally beneficial for a majority of employees. Temporary workers are also entitled to the same basic work conditions are those working full-time.
Free movement of labor also resulted in a flexible job market. Whatever employment gap that a particular country or region is experiencing, can be filled by immigrants. Nursing and plumbing jobs in the UK, for example are filled by foreign workers. The increase in employment also resulted in the increase of a country’s real GDP and productive capacity.
3. Access to health benefits.
EU citizens are provided with the EU Health Insurance Card that gives them access to emergency healthcare whenever they need it, while visiting any Member States. What is even better is that whatever rules that applies to locals will also apply to the visiting citizen, effectively providing peace of mind.
4. Lower prices of goods and services.
Operating as a “single market”, there is a need to find an average price for all products sold and exchanged within member countries. This resulted in lower prices that are further reduced with the absence of custom tax. Usually, goods transported or sold between states and countries are charged with custom tax, but because the EU has an integrated economy, no such charges apply.
Also, there are no charges on customs and excise duties on goods brought from shops in any Member State and then brought home, provided that it is for personal use. New rules are also implemented to protect consumers from car price cartels. This means cars can be imported from EU countries with lower prices without being charged exorbitantly.
Phone charges have also been regulated, allowing citizens of Member States to enjoy lower charges when traveling abroad. Based on the 2007 EU legislation, receiving a call will cost a maximum charge of 10p per minute, while outgoing calls will cost no more than 30p per minute. Sending texts, on the other hand, will cost around 25p to 9p.
Along with the growing number of low-cost carriers is cheaper air travel across the EU. Enabling people to travel at lower prices is one of the most noticeable advantages of the single market. Deregulation also ensures that passenger rights are protected, from unfair practices and overpriced holiday packages. Minimum standards set by the EU require travel agencies and tour operators to provide passengers with truthful information and notify them of the best time to travel. These also protect travelers from price increase and sudden cancellations.
With all these provisions, citizens will be able to stretch their budget significantly.
5. Development of underdeveloped member regions.
Some states of the EU are economically deprived. In a bid to narrow the disparities between developed and underdeveloped regions in Member States, the EU has developed structural funds that come in two types. One is the European Regional Development Fund designed to create infrastructure and support investment in job production, and the European Social Fund that invests in training measures to help unemployed and disadvantaged members of the population to enjoy a working life.
List of Disadvantages of the European Union
1. High cost of membership.
Becoming a member of the EU does not come cheap. It is said that the cost per head vary between £300 and £873, which explains why the UK government spending reached a net worth of £6.883 billion, excluding regulation cost. Even with its many benefits, Member States, and those planning to become a member, have to seriously consider if the cost is worth it.
2. Problems with the policies.
Operating as a single market and following common policies resulted in many discrepancies. Regulations that were designed to protect smaller member countries can affect larger countries, since the European Commission looks after the interests of the entire EU and not the individual country. Wealthier countries are also obliged to share their wealth with other member States, a good example of which is Germany bailing out Greece.
The extra layer of government that EU has created has also taken away certain decision-making processes, responsibility and power from individual country, allowing EU to wield certain control. In fact, they removed an elected leader in Greece and chose an alternative because they felt it was necessary. This only shows that members now have less democracy.
3. Problems with the Single Currency.
Although EU doesn’t require all its members to convert to Euro, they placed emphasis on it and insist on the use of the Single Currency. Unfortunately, the Euro is causing problems all across the EU, including high unemployment rates, slow economic growth, and unsuitable interest rates in the Eurozone area. It is clear that the UK made the right decision by staying out of the Euro, because they can enjoy independent monetary policy and are not obliged to pursue austerity.
4. Overcrowding due to immigration.
With citizens of Member States being able to relocate freely, there is loss of immigration control that resulted in overcrowding. Over the next decade, population in the UK is said to rise at an estimated 70 million because EU rules prohibit them from restricting free movement. This can have an adverse effect in the UK economy. Immigration is a two-way problem, however. While the UK complains of overcrowding, over 700,000 of Britons are also living or working in other European states, contributing to an increase in population.
The European Union might be good for some of its members, but bad for others. Unfortunately, an EU exit also comes with pros and cons, which calls for strategic planning, regardless of which direction to take — better off out or in.
Natalie Regoli, Esq. is the author of this post and the editor-in-chief of our blog. She received her B.A. in Economics from the University of Washington and her Masters in Law from The University of Texas School of Law. In addition to being a seasoned writer, Natalie has almost two decades of experience as a lawyer and banker. If you would like to reach out to contact Natalie, then go here to send her a message.