In an outburst somewhere between petulance and delusion, France’s economy and industry minister has said his country would be ready to “roll out the red carpet” for British investors if the UK voted to leave the EU.
The socialist minister Arnaud Montebourg spoke on Tuesday after UKIP, the British party that wants to take the UK out of the EU, topped the poll in the elections to the European Parliament in Britain: “If they were to vote to leave the EU, France will roll out the red carpet to British investors who will flee their country. They will all come to France because companies need Europe.”
His remarks were seen as a riposte to British Prime Minister David Cameron, who angered France’s socialist government in 2012 when he said that Britain would roll out the red carpet to French tax exiles.
However, the high-tax, high-unemployment French economy to which Montebourg imagines British investment will “flee” is one of the EU economies locked into perpetual low growth because of its membership of the euro.
More, Montebourg’s remarks overlook the fact that, even after leaving the EU, Britain could negotiate access to the Single Market. The UK already has membership of the European Economic Area (EEA) Agreement, so all the technical measures are in place. The EEA unites the EU member states and Iceland, Liechtenstein, and Norway into an internal market governed by the same basic rules.
However, as EU expert Dr Richard North has pointed out once outside the EU, Britain would also need to re-join the European Free Trade Association (EFTA), which adds Switzerland to the EEA membership list.
Britain was a founder member of the EFTA in 1960, but left when it joined the then European Economic Community (EEC) in 1973.
According to Dr North, this EFTA + Britain “would have its own advantages, allowing Britain to tap into extensive consultation arrangements with the EU, and also give it access to the free trade areas to which the Association is party.”
EFTA + Britain would form a significant trading bloc, making it the fourth largest trading league in the world after China and ahead of Japan.
All of which means it is unlikely British investors would want to flee anywhere, least of all to Hollande’s feeble France.