Who’s doing the leaving? The EU, actually

Europe is speeding off on a journey of its own: to take control of the continent’s taxation and form an army

Summer is here, and Brits getting ready for a holiday in the Med are thinking of what to pack. Along with flip-flops and Ambre Solaire, the well-prepared traveller will make sure they’ve got their Brexit patter in slick working order, because it’s dead certain that after three bottles of Mythos lager with a friendly family from Denmark in a taverna, the dread question will arrive from Birgit and Sven: “Why are you guys leaving us?”

Remainers can groan and move onto the ouzo. Battle-hardened Brexiteers may relish the chance to air ideas with a fresh audience. A productive tactic is to flip the argument. It’s not the UK that’s leaving, per se. The mainstream Leaver view is to retain the same terms of free trade, with a couple of tweaks. Rather it’s the European Union that is accelerating away as it embarks on a journey of ever closer integration.

In recent months the EU has opened up two new fronts. Together they prove that the status quo is not an option. We leave, or we join the march towards a unified state.

The first area is tax. In theory, tax is an untouchable area for the EU. The power to set rates is reserved for the member states. Nevertheless, a plan is underway to harmonise taxes.

Step one is to make the tax rules the same in every European country. The EU loves to give revolutionary ideas tedious names in order to deter scrutiny, and this one is a gem: the Common Consolidated Corporate Tax Base [CCCTB]. The tax codes of all 28 member states will be replaced by a single code. Legal definitions will be the same in Estonia and Portugal. Taxable allowances and deductions identical in Italy and Hungary.

Then come harmonised tax rates. French President Emmanuel Macron, is leading the push. He ran for the presidency on a manifesto calling for convergence of EU corporate taxation, and singled out Ireland causing market bias with its 12.5 per cent rate, half his preferred rate for France. Enda Kenny, the former Irish taoiseach, was mightily displeased at the assault, reminding Macron that tax is “our business”.

Last Wednesday, Pierre Moscovici, European commissioner for economic and financial affairs, ended all doubt. He said EU control of taxes was necessary for “our mission”, and announced support for a paneuropean financial transactions tax on shares and bond trading. Income tax and social benefits are next, he declared. Money, of course, is power. When the EU seizes tax rights, it gains an iron grip over member states.

The second breakthrough is the creation of an EU army. Again, the EU refuses to admit any such plan exists, and slathers military chatter in acronyms and euphemisms to deter all but the most determined investigator. So the commissioner for foreign affairs, Federica Mogherini, insists the EU force is merely a “battle group”. In a recent speech she celebrated the launch of the Military Planning and Conduct Capability [MPCC], the first military structure controlled by Brussels. She admits visiting “our men and women in uniform in Mali” adorned with EU badges, and yet still denies an army exists. Next up is the activation of the Permanent Structured Cooperation (Pesco) which allows a core of countries to press on with a “coherent security and defence policy” based on Article 42 (6) of the Lisbon Treaty. An army in all but name.

President Juncker is openly calling for a Brussels-controlled armed forces: “A joint EU army would show the world that there would never again be a war between EU countries,” he told the Welt am Sonntag newspaper.

Building an army while pretending nothing is going on has a long tradition. Japan still does exactly that. The post-war constitution of Japan bans “land, sea, and air forces, as well as other war potential”. So Japan simply renamed everything. The army is a “self-defence force”. Fighter jets were called “interceptors”. Japanese culture is adept at disguising true intentions. They call it honne and tatemae – what you feel inside (honne) is hidden by what you show the world (tatemae). It certainly works for passing off a $42billion-a-year military force as a pimped-up coast guard.

The EU also employs honne and tatamae. It claims to respect the rights of member states, while manoeuvring to annex those rights. It may take quite a few beers to get these points across. But the message is sobering. The UK is leaving its current position, but the EU is also off on a journey of its own.