Editorial
"Heavy Fog in Channel - Continent Cut Off"
By Dr. Gary K. Busch 31/3/17
Apr 1, 2017 - 6:57:37 AM

As the UK triggered Article 50 yesterday and took the first official steps towards Brexit I was reminded of the famous headline from the “Times” in London on October 22, 1957 which demonstrated the British view of its relationship with Europe.

The process of Britain’s extrication from its membership of the European union has been referred to as a “divorce”. In many ways Brexit could be described as a divorce. The only part missing in the analogy is an adequate description of the marriage and the partners in that marriage. The marriage of the UK with the EU is a marriage between a nation-state and a polygamous partner of unelected Commissioners conjoined with twenty-seven other nation-state wives. The UK became part of the polygamous relationship long after the first marriages had been completed. There were two “senior” wives in the marriage when the UK joined, the French and the Germans, but neither were very accepting of the UK. There were many other “junior” wives in the relationship as well but they played only a minor part in the marriage.

This was not a very successful marriage between the UK and the EU as the Commission grew increasingly abusive to many of its members with the consent and support of Germany and France. Greece and Italy had their elected officials replaced by officials appointed by Brussels. The Spanish and Portuguese electors found themselves overruled and a program of austerity thrust on them. The Dutch, French, Irish and Danes voted against the continued abuse by the Commissioners and found that their objections were overruled and new referenda called until they ‘got it right’ and bowed to the will of the Commission. The Italians found their ability to sustain their banking system blocked by the same Commission.

As the Commission moved inexorably towards a closer political and economic federal Europe complete with its own currency, the Commission felt obliged to enforce discipline among the member states.  At the heart of the British discomfort at the demands of the EU was a fundamental incompatibility in the legal systems which govern the various nations. There is a fundamental conflict of law which has coloured many of the relationships.

There is a problem which has beset Britain’s relationship with the European Community since its inception; the conflict between the Common Law and the Roman-Dutch civil law of the Continent. In essence, the Common Law legal systems are in widespread use, particularly in England where it originated in the Middle Ages, and in nations or regions that trace their legal heritage to England as former colonies of the British Empire. It is a system of law which is founded on case law and precedents. This Common Law was developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action.

The fundamental principle is that of the continuity of the law and the root belief that it is unfair to treat similar facts differently on different occasions. The body of precedents developed through prior adjudication binds future legal decisions on similar points of law. In cases where the parties disagree on what the law is, a common law court looks to past precedential decisions of relevant courts. If a similar dispute has been resolved in the past, the court is bound to follow the reasoning used in the prior decision (this principle is known as Stare Decisis). If, however, the court finds that the current dispute is fundamentally distinct from all previous cases (called a "matter of first impression"), judges have the authority and duty to make law by creating precedent. Thereafter, their new decision becomes precedent, and will bind future courts.

This system of Common Law is the source of law in England, the United States, Canada, New Zealand, Australia and the former British colonies in Asia, Africa and the Caribbean. This Common Law distinguishes itself from Statutory or Regulatory Law promulgated by executive branch agencies pursuant to delegation of rule-making authority from the legislature and is generally anterior to these statutory or regulatory laws. The Common Law arises from the traditional and inherent authority of courts to define what the law is, even in absence of an underlying statute. Most criminal law and procedural law; most of contract law and the law of torts; and most court decisions that interpret and decide the fine boundaries and distinctions in law promulgated by other bodies relies on judges taking evidence in an adversarial proceeding and delivering a judgement which establishes the strictures of the ensuing law. This body of common law, sometimes called "interstitial common law," includes judicial interpretations of the Constitution, of statutes, and of regulations, and examples of application of law to facts

This Common Law system is very different that the Civil Law system which prevails in Europe. Common law systems place great weight on court decisions, which are considered "law" with the same force of law as statutes. For nearly a millennium, common law courts have had the authority to make law where no legislative statute exists, and statutes mean what courts interpret them to mean. By contrast, in European civil law jurisdictions courts lack authority to act where there is no statute, and judicial precedent is given less interpretive weight which means that a judge deciding a given case has more freedom to interpret the text of a statute independently, and less predictably. For example, the Napoleonic code expressly forbade French judges from pronouncing general principles of law.

European civil law is a legal system inspired by Roman law and whose primary feature is that laws are codified into collections which are referenced. Conceptually, it is the group of legal ideas and systems ultimately derived from the Code of Justinian, but heavily overlaid by Germanic, ecclesiastical, feudal and local practices as well as doctrinal strains such as natural law, codification, and legislative positivism. Civil law proceeds from abstractions, formulates general principles, and distinguishes substantive rules from procedural rules. It holds legislation as the primary source of law, and the court system is usually inquisitorial, unbound by precedent, and composed of specially trained judicial officers with a limited authority to interpret the law. Juries separate from the judges are not used, although in some cases, volunteer lay judges participate along with legally trained career judges. European civil law relies on the notion of codification. The concept of codification was developed as conforming to a political ideal which required the creation of certainty of law, through the recording of law and through its uniformity.

The principle of civil law is to provide all citizens with an accessible and written collection of the laws which apply to them and which judges must follow. Where codes exist, the primary source of law is the law code, which is a systematic collection of interrelated articles arranged by subject matter in some pre-specified order, and that explain the principles of law, rights and entitlements, and how basic legal mechanisms work. Law codes are usually created by a legislature's enactment of a new statute that embodies all the old statutes relating to the subject and including changes necessitated by court decisions

There are many differences between the Common Law and Civil Law, much too abstruse for this analysis. For the purpose of analysing the conflict of laws within the European Union a simple concept will suffice. This was recited to me by the new head of the Legal Division of the European Economic Community in the early 1970s. I was researching and writing a television documentary for the Canadian “Windows on the World” (CTV) called “The New Europeans”. The legal head of the EEC was a British lawyer. He said to me, “This European Community will never work. English law says that whatever is not ‘illegal’ is permitted. In Europe, if something is not specifically ‘permitted’ under some codified rule, then it is ‘illegal’. He went on to say that not only must everything in Europe be specifically permitted it has to be permitted uniformly throughout the Community. That is why there are so many directives, guidelines and rules set up by the EU which govern all aspects of economic and political life. All these rules must be the same throughout the EU. Most of the time taken up by the EU (except for the profitable business of allocating subsidies, allowances and quotas) is spent dealing with the minutiae of governance.

This is a core reason why the EU seems bogged down by pettifoggery and why the British cannot fathom what these bureaucrats are about. If it isn’t illegal than one should be free to do it. It certainly makes sense to Americans, Canadians, Australians and others. This conflict of laws is equally a challenge to multinational companies attempting to pursue their aims in the EU. Much of what is taken for granted as legal and permissible in other parts of the world is differently construed in Europe. This is repeated in Africa where ex-British colonies are often in conflict with ex-French, Spanish and Portuguese colonies. This issue is an important factor in the current debate on the imposition of a tax on financial transactions. It is a dilemma for those involved.

This is particularly true in that the issuance of an Article 50 notice is not the necessary and sufficient condition for effecting a divorce between Britain and the EU. The invoking of Article 50 by the UK Government is the equivalent of a Decree Nisi under UK law. It certifies that the marriage has broken down and that a divorce is underway. However, engaging in Article 50 is not the same as leaving the EU. It states that a breakdown has taken place and the divorce proceedings are underway. For a full break with the EU the UK is obliged to repeal or alter the European Communities Act 1972 (ECA)

The UK is a 'dualist' state, unlike many continental European countries, which are 'monist'. In dualist states a treaty ratified by the Government does not alter the laws of the state unless and until it is incorporated into national law by legislation. This is a constitutional requirement: until incorporating legislation is enacted, the national courts have no power to enforce treaty rights and obligations either on behalf of the Government or a private individual.

Under the European Communities Act 1972 Parliament voluntarily gave effect to the UK's obligations and duties under the former Community and now EU Treaties in national law. It accepted the rules and law of the EU into British law wholesale. The ECA defines the legal relationship between the two otherwise separate spheres of law, and without it EU law could not become part of national law.

Section 2(1) provides:

All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression "enforceable EU right" and similar expressions shall be read as referring to one to which this sub-section applies.”

Now, in order for the break with Europe to be final and binding (in effect a Decree Absolute) Parliament will have to repeal the provisions of the European Communities Act 1972 (ECA) to put the regulations back under Parliamentary control and British Law. This is envisioned by the government as taking place in a quick introduction in Parliament of a Great Repeal Bill which will both repeal the ECA and import, in its entirety, the rules and regulations of the European Union into British law. These rules and regulations which are imported into the Parliament can then be amended by the Parliament to fit British needs or disposed of as they will then be British rules and regulations under the purview of the Parliament and the British legal system.

On the passage of the Great Repeal Bill there will be no European jurisdiction in Britain and none of their rules will apply in Britain. However, despite this legal separation of the UK from the EU the two will remain locked in a continuing interrelationship of trade, banking, politics and security matters. These will have to be negotiated between the two sovereign parties and rules and regulations be agreed governing the continuing relations between the two. As the current rules of the EU will have been taken over, en masse, by the Great Repeal Bill, there will be an easier path to agreement than might have been the case without it.

The terms of agreement between the two will have to be negotiated both in terms of rights and interests.  In fact, most of the rules and regulations re-incorporated into British Law by the Great Repeal Bill will not pose much of a challenge to either party. Some areas, however, will pose a challenge for the negotiators, particularly those dealing with the sanctity of borders, recognition of refugees, free movement of peoples and the rights conferred upon the European Court of Justice as the ultimate adjudicator of justice.

What will be much more complicated will be the economic adjustments which will have to be made to account for the removal of the British financial contributions to the various programs of the EU. The Europeans are facing a large hole in their budgets by the withdrawal of the British contribution and are apparently seeking a tranche of money from the British before they will discuss any trade relationships with the EU. What the Europeans are talking about is solely the imagined liabilities of the British to the EU without taking into account the assets of the British which will remain with the EU when the final separation is made.  A substantial part of the assets of the EU (the buildings in Brussels, the funds advanced to the regional aid programs, and a wide range of assets belonging to Britain in various EU funds) will have to be offset against any claims by the EU on British payments. Any divorce lawyer will attest to the fact that the distribution and allocation of the community property as part of the terms of separation is often the major hurdle in divorce cases. This will be no different.

The EU negotiators have yet to present the justifications for their financial demands to the British and the British have yet to make a claim against the assets of the EU being held by the EU. The aim of all the parties is, in reality, the continuation of the free access of the British to the EU markets and the concomitant free access of the EU to the British markets. The Europeans are not economic kamikaze pilots. They run a very favourable trade balance with Britain. Any major imbalance will be costly.

The German economy would be particularly affected by a hostile separation from the United Kingdom. German companies have invested nearly 120 billion euros on the British Isles - over ten percent of all German foreign investments. Over the past few years, Great Britain also has developed into Germany's third most important customer. Between 2010 and 2015, German exports to Britain had increased by nearly 50 percent - to almost 90 billion euros. The demand for British goods being much lower in Germany, the German trade surplus with Britain reached nearly 51 billion euros in 2015, totalling more than 196 billion euros from 2010 to 2015. Last year, more than 50 billion euros were again added to the trade surplus. In the period of the Euro crisis and sanctions against Russia, Great Britain had made a significant contribution to help finance Germany's export industry. This could now change. Since the June 23, 2016 Brexit referendum, German exports to the United Kingdom have slumped, due also to the currency exchange devaluation of the pound (see German Foreign Policy, A Dangerous Game, 2017/03/23)

The economic trading patterns of the EU are bound up in prolonged and inefficient trade deals with the rest of the world. The failure of the EU to establish effective and mutually-beneficial trading relationships with much of the rest of the world is because the EU has crippling policies and an inherent democratic deficiency which has made such arrangements difficult to achieve, especially in getting the concurrence of all its member states. The EU has been negotiating a comprehensive trade deal with Canada (CETA) for over a decade. The deal was finally agreed in late 2014 but has not come into effect because the agreement has to be validated by the ratification of its terms by all the EU members. Along with the CETA the EU and Canada agreed a Strategic Partnership Agreement (SPA) While the European Commission pretends that the deal has been made and is workable there are several nations within the EU or even subgroups like the Flemish of Belgium which are refusing to ratify its terms.

Both Rumania and Bulgaria have stated that they will not ratify the CETA as an angry reaction to the refusal by Ottawa to lift the visa requirement of its nationals, but also for the lack of EU solidarity for solving the issue. Canada has a visa-free regime with all EU countries except Romania and Bulgaria and is refusing to issue a waiver on these restrictions. Despite the assertions of the Trade Commissioner, Cecilia Malmström, that CETA is the best trade agreement the EU has been able to conclude so far, it is yet to be ratified. The problem of visas to Canada (and indeed the USA) is a serious impediment in its progress.

The EU has been in negotiations with the Mercosur nations of Latin America since 2004 trying to formulate a free trade agreement. The Mercosur is a regional bloc which consists of Latin American countries. Its full members are Argentina, Brazil, Paraguay, Uruguay and Venezuela while associate countries are Bolivia, Chile, Peru, Colombia, Ecuador and Suriname. The objective of these negotiations is to negotiate a comprehensive trade agreement, covering not only trade in industrial and agricultural goods but also services and establishment and government procurement, and the improvement of rules inter alia on government procurement, intellectual property, customs and trade facilitation, technical barriers to trade.

The EU is Mercosur's first trading partner, accounting for 20% of Mercosur's total trade in 2013. EU-Mercosur trade in that year was €110 billion. Mercosur is the 6th most important export market for the EU (2013 data). Mercosur's biggest exports to the EU are made of agricultural products (43% of total exports) and raw materials (28%), while the EU mostly exports manufactured products to Mercosur and notably machinery and transport equipment (46% of total exports) and chemicals (22% of total exports) [data of 2013].

In the years since 2004, when negotiations began, several Mercosur members have been investing heavily in expanding their agricultural production. While the EU has sheltered behind the protectionism, price controls and subsidies of its Common Agricultural Policy (‘CAP’) the Mercosur countries have expanded their non-EU trade in agricultural products to a wider market. China and Russia have been an increasing market for Mercosur agriculture. Although the Chinese demand has diminished recently the Russian imposition of a ban on food imports from the EU as a result of sanctions by the EU against Russia after its invasion of Ukraine has led to EU agriculture being replaced by Mercosur producers.

When the EU and the Mercosur countries exchanged protocols on 11 May 2016 on how negotiations were to proceed, the EU farm lobby was enraged. In the preparations of the protocols exchanged by the EU the European farmers has demanded that the Commission refrain from many of the proposals for a relaxation of the rules governing the protected sector of EU farming. The Copa-Cogeca, the European farmers and agricultural cooperatives association, were enraged by the Commission’s offer to Mercosur on agriculture. They believe that the executive’s offer on agriculture is problematic as “it opens EU’s markets to imports without getting much in return.” EU farmers are particularly concerned about “sensitive” products such as beef and poultry.

European farmers demanded that all the sensitive products be excluded from the executive’s offer. However, although beef and ethanol products were removed, other sensitive sectors like poultry and cereals remained in. The Commission had gone ahead and presented the protocols without, as the farmers argued, sufficient protection for EU agriculture. They said that the inclusion of sensitive products could destroy the agriculture sector before any clarification was made in terms of removing “red tape and other unnecessary non-tariff barriers to trade” which prevent EU exports from entering these countries.”

The British have been trading freely with Latin America for centuries, especially in countries like Argentina. Folding up their trade in the stifling blanket of EU incompetence and arrogance has been a powerful incentive for Britain to exit the EU and get on with restoring many of its traditional Latin American markets. Its agriculture is much more efficient than EU farmers and is not threatened by the expansion of Mercosur grains, poultry or even beef.

So, the threat by the EU of not signing a free access for Britain to the EU market is of marginal effect as Britain has the rest of the world to trade with on its own terms while the EU is bound by its incompetence, vested interests, and lack of agreement among its members. If, at the end of the two-year period of negotiations with the EU over its exit, Britain has not agreed a trade deal with the EU the British will be far better off and better positioned to trade with China, India, Africa and Latin America on World Trade rules. The posturing and pretence of the EU fools no one with any grasp of how the world markets function. The internal price of goods inside the EU is so high that it can only be bought by other Europeans. To sell elsewhere it must engage in offset deals to lower its prices to remain competitive. Britain doesn’t need that.

Most importantly the EU desperately needs the presence and abilities of the British armed forces to present even a modicum of security in a troubled world as well as its intelligence services, on its own and as part of the Five Eyes program,  are crucial to European security. The British Armed Forces comprise the Royal Navy, a blue-water navy with a comprehensive and advanced fleet; the Royal Marines, a highly specialised amphibious light infantry force; the British Army, the UK’s principal land warfare force; and the Royal Air Force, with a diverse operational fleet consisting of modern fixed-wing and rotary aircraft. The country is a major participant in NATO and other coalition operations and is also party to the Five Power Defence Arrangements. Recent operations have included Afghanistan and Iraq, peacekeeping operations in the Balkans and Cyprus, intervention in Libya and again operations over Iraq and Syria. Overseas defence facilities are maintained at Ascension Island, Belize, Brunei, Canada, Diego Garcia, the Falkland Islands, Gibraltar, Kenya, Bahrain and Cyprus It’s a recognised nuclear weapons state and its defence budget ranks fifth or sixth in the world. The country has been a permanent member of the United Nations Security Council since its inception.

When the Europeans were left on their own to pursue a military strategy after the end of the Cold War they were incapable of doing so. Their first attempt was in the hostilities in the wake of the break-up of Yugoslavia. In the early days of the war in Croatia and later Bosnia it was the Europeans who insisted on excluding the US (except financially) from its military and political planning. Egged on by Genscher's insistence that Croatia and Slovenia should be free, the leadership of Croatia (Tudjman and his Ustash cronies) was emboldened to declare its independence from the Yugoslav Federation based on territory that included many ethnic Serbs. These Serbs had already had a long experience with ethnic cleansing conducted by the black-shirted SS battalions of Croatian Ustashi of Ante Pavelic.  The Serbs needed no reminder of their welcome in an independent Croatia. They turned to Russia and asked for assistance. Russia and US politicians and military leaders discussed this amongst themselves and felt that a common resolution was possible. However, before anything was undertaken, the Europeans in NATO vetoed this initiative. They reiterated that "Croatia is a European problem" and had to be dealt with by the Europeans if they were ever to maintain any credibility as a politico-military force.  Lord Carrington and David Owen were dispatched to bring to the Balkans their skills in diplomacy developed in the debacles of Rhodesia and Portadown. They were able to achieve what everyone expected and feared and soon it was the responsibility of the US and the Russians to bring the parties to table and establish the fragile Balkan peace despite the Europeans. This was repeated in Kosovo.

The Europeans again wanted to show they had some independent military capability.  The number of bombs, missiles and other tactical devices used in the first two weeks of the Kosovo campaign exceeded the total arsenal storage of the totality of the European Community. The amount spent per day on the bombing of Kosovo, including indirect costs, amounted to over $12.5 million. It would have been far cheaper to buy Serbia than to bomb it. NATO could have offered each Serb $10,000 a head plus moving costs and still saved money. Under NATO rules the US was obliged to pay two-thirds of these costs.

This was just as true in Libya. The Europeans (calling themselves NATO) quickly ran out of ammunition, bombs and money. The US spent almost $1.5 billion in the first wave of attacks by the French and British. As Secretary of Defence Gates said in his speech, ““Despite more than 2 million troops in uniform – not counting the U.S. military – NATO has struggled, at times desperately, to sustain a deployment of 25,000 to 45,000 troops -- not just in boots on the ground, but in crucial support assets such as helicopters; transport aircraft; maintenance; intelligence, surveillance and reconnaissance; and much more.” He went on ““We have the spectacle of an air operations centre designed to handle more than 300 sorties a day struggling to launch about 150. Furthermore, the mightiest military alliance in history is only 11 weeks into an operation against a poorly armed regime in a sparsely populated country – yet many allies are beginning to run short of munitions, requiring the U.S., once more, to make up the difference.” This was just as true in Libya. The Europeans (calling themselves NATO) quickly ran out of ammunition, bombs and money. The US spent almost $1.5 billion in the first wave of attacks by the French and British. As Secretary of Defence Gates said in his speech, ““Despite more than 2 million troops in uniform – not counting the U.S. military – NATO has struggled, at times desperately, to sustain a deployment of 25,000 to 45,000 troops -- not just in boots on the ground, but in crucial support assets such as helicopters; transport aircraft; maintenance; intelligence, surveillance and reconnaissance; and much more.” He went on ““We have the spectacle of an air operations centre designed to handle more than 300 sorties a day struggling to launch about 150. Furthermore, the mightiest military alliance in history is only 11 weeks into an operation against a poorly armed regime in a sparsely populated country – yet many allies are beginning to run short of munitions, requiring the U.S., once more, to make up the difference.”

Until very recently. there has been only a decline in European self-defence capabilities. In a recent study (February 2016) “Alliance at Risk Strengthening European Defence in an Age of Turbulence and Competition” a detailed study of the European failings and shortfalls were highlighted.  Europe’s leading armed forces are so hollowed out they are incapable of conducting major rapid-response operations. The US spends 3.6 per cent of its economic output on defence; Germany spends a pitiful 1.2 per cent. And what little Germany does have tends not to work. When Angela Merkel made the grand gesture of sending weapons to Kurdish rebels fighting Isil, her cargo planes couldn’t get off the ground. At the time, the German military confessed that just half of its Transall transport aircraft were fit to fly. Of its 190 helicopters, just 41 were ready to be deployed. Of its 406 Marder tanks, 280 were out of use. Last year it emerged that fewer than half of Germany's 66 Tornado aircraft were airworthy

Not only is the budget below German’s security needs, it is being spent primarily on personnel, not equipment or repairs. This has resulted in an army that can only fight for 41 hours a week and not on the weekend. German soldiers taking part in a four-week NATO exercise in Norway earlier this year had to leave after just twelve days because they had gone over their overtime limits. However, the troops are comfortable. The German Defence Minister, Ursula von der Leyen, has used the military budget to introduce creches for children on the bases, along with flat-screen TVs. Postings are limited to match school term dates.

She has been accused of prioritising the wrong issues at a time when the military is facing equipment shortages that have seen soldiers training with broomsticks instead of guns. Under the latest reforms, in force since January, the military working week has been reduced to 41 hours and troops can no longer be paid for working overtime. Instead they must be compensated with alternate time off. The new rules forced training camps to close at 4.30pm and left soldiers stranded on base.

The French military has overrun its military budget on numerous occasions, although it has many troops stationed in Africa maintaining African despots in power. It’s budget, too is well below the NATO limit of 2%. Even when it does make its investments in equipment the process has, at times, been an elaborate charade. The best example, perhaps, is the pride of the French Navy, the nuclear aircraft carrier Charles DeGaulle.

During its construction, the ship ran into huge cost overruns. Work on it was stopped four times. By the time it was completed the rules for radiation shielding had changed and it had to be refitted with radiation shielding to protect the crew. Moreover, the ship’s flight deck had to be extended by about fourteen feet to accommodate the Hawkeye as the type of plane the carrier would carry had changed over the long time of construction. The propulsion system was even worse.  When it went to sea it vibrated so heavily that the propellers snapped.

When they went to repair it they found that the blueprints for the propellers had been lost in a fire, which meant that the ship had to be refitted with hand-me down screws from Foch and Clemenceau. That cut her speed down from twenty-seven knots to about twenty-four knots—which was unfortunate since she is already considerably slower than her predecessors which steamed at thirty-two knots. She went for a refit in 2007. In 2010 when she set out for the Mediterranean it took only one day out of port for there to be an electrical fault and tugboats had to put her in position. She is now mainly functional.

It is a false and dangerous argument to make that Brexit will leave the UK isolated. It will be Europe who will be isolated and insecure. With the pressure on NATO by the Trump Administration for Europe to pull its weight on defence and defence spending the EU needs Britain far more than Britain needs the EU.

In summary Britain is well-positioned to finish its divorce from the EU and has little to fear from the negotiations on its leaving. All the preposterous and blowhard statements by EU politicians and apparatchiki cannot alter the fact that Britain will be far better outside the EU and its ability to trade, attract investment and maintain its security outside the EU will not be impaired by the Brexit talks. There is a miasma over Europe and it is not from the fog in the channel which is isolating it from the UK.