Farage: "Merkel: tell PM it's time for UK to leave EU&q

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Nigel Farage (UKIP, EFD): Good afternoon, everybody.

Chancellor Merkel! So you’re off to Downing Street to negotiate the EU budget with David Cameron. And you do so against the backdrop of the Court of Auditors, yesterday, for the 18th year in a row, failing to give the accounts a clean bill of health; you do so against the vote in the House of Commons last week where a majority of MPs were asking for reductions in the EU Budget.

And of course you do so with a growing anger in Britain – Why are we pumping £53 million a day of British taxpayers’ money into this Union? Not that it will matter a bit. Cameron is a very weak Prime Minister, I am sure you shall walk all over him tonight and win that negotiation. But the EU budget isn’t really the question. It is Britain’s place in this Union that is the real question. And increasingly Britain looks like a square peg in a round hole.

You see, we didn’t join the Eurozone and that means that every time you have one of your summits in Brussels, when the big debates are going on, there is actually nothing for the British Prime Minister to say. And in fact if we do say anything we are now seen as the dog in the manger. The fact is Chancellor, you are now leading the Eurozone on a journey to a much more deeply centralised and I think more fundamentally undemocratic Europe. But nonetheless, we simply cannot join you on that journey.

Whether it is harmonisation of financial market regulations as you said today, whether it is the Financial Transaction Tax, whether it is the Banking Union – Cameron is forced into the position, time and time again where there is nothing he can say other than “No”. Because British public opinion, and now as the Labour Party appears to have discovered a bit of Euroscepticism, or at least a bit of opposition, he cannot join these conversations. Now I sense in Brussels, not from you, but certainly around this chamber, an increasingly growing hostility to the United Kingdom’s membership of this Union. And indeed there are many here who blame the Anglo-Saxon markets in London and New York for the faults of the Eurozone.

Wouldn’t it be better Chancellor, tonight if you went to Downing Street and said to Mr Cameron, ‘Look, this simply doesn’t work anymore, it really is time for the United Kingdom to leave the European Union. He hasn’t got the courage to say it himself but if you said it to him, it might have an impact.

All I am suggesting Chancellor is that we have a simple amicable divorce and that we’ll all get on much better in the future.

Angela Merkel (Chancellor of Germany, CDU): One word on the UK. I want to have a strong UK in the European Union. To make that absolutely clear: I come from Germany. The UK was with us when we were liberated from National Socialism. I can't imagine - we had British soldiers still in Germany, I can't imagine the UK not being part of Europe, and I think it's good also for the UK to be part of Europe. If you have a world of seven billion and you're alone in that world, I don't think that's good for the UK and so I'll do everything I can to keep the UK in the European Union as a good partner and so that's why I'm going to London this evening and I would ask the inhabitants of this wonderful island that you won't be happy if you're alone in this world with 500 million in Europe who are in favour of democracy and look round in the world and see where that isn't the case and be happy that we're together.

Nigel Farage (UKIP, EFD): It’s a very different European Union, isn’t it!

The 17 eurozone countries are on a journey and are moving somewhere completely different. And every single proposal that you come up with, Mr Cameron is forced to say No to. So we are going to find ourselves effectively as the Cinderella state. Because you will make big decisions that affect the Single Market of which we are a member but according to you, even UK members of this Parliament won’t be able to vote on issues that affect the Eurozone which undeniably knock on to the Single Market. So I understand what you are saying but frankly we find ourselves now in a completely illogical position.

I would have thought that Britain will either have to be wholly fully in or wholly fully out and with a simple Free Trade agreement. And maybe Mr Cameron would agree with you on this but ultimately the British populace are seeking a totally new settlement.

Well, if Angela Merkel thought she would convince us by telling us we couldn’t make a go of things outside the EU, then she badly misread the British character.

Shortly before her meeting with David Cameron on Wednesday, the German Chancellor told MEPs: ‘Being alone in a global population of seven billion isn’t good for Britain. You can be happy on an island, but you can’t be happy on your own.’

I suspect a fair number of us, hearing those remarks, will have muttered: ‘We’ll be the judges of what makes us happy, thank you, Frau Merkel. We managed perfectly well before the EU existed — and we’ll decide for ourselves whether to remain part of it.’

The idea that Britain is too small to survive on its own is wrong on several levels. First, it simply isn’t true that you need to be big to prosper. If it were, then China would be wealthier per capita than Hong Kong, Indonesia than Singapore — and the EU, for that matter, than Switzerland.

What matters in the modern world is having a competitive regulatory regime and tax system.

In general, small countries do these things well — which is why the places with the highest per capita income tend to be microstates: the Channel Islands, the United Arab Emirates, Liechtenstein and so on.

The EU, alas, is going in the opposite direction, piling on the regulations and constantly seeking to expand its budget (which is what Mr Cameron and Mrs Merkel were meeting to discuss).

Second, we are not, by any definition, a small island.

We are the seventh largest economy in the world, the fourth military power, a member of the G8 and one of five permanent seat-holders on the UN Security Council. We are a leading member of Nato and the Commonwealth, and our language is spoken all over the Earth.

We’re not even a small island in the literal sense. Most geographers reckon Great Britain to be the ninth-largest island on the planet.

Plenty of islands seem content to live under their own laws. New Zealand has no plans, as far as I’m aware, to merge with Australia — but Kiwis are not dismissed as bigoted ‘Austrosceptics’ who are clinging to the past. Japan is not applying to join China, but it is not ticked off as a ‘small Sinosceptic island’ which can’t get over the loss of its empire.

In any case, no one — no one — is arguing that Britain should cut itself off from its European neighbours. We are a mercantile nation. We want commerce and friendship with all well-disposed peoples.

The argument is over whether we want to be governed from Brussels. And I don’t think ‘governed from Brussels’ is putting it too strongly.

In the same speech, Chancellor Merkel repeated her call for a federal Europe, in which the European Commission would be the Cabinet, the European Parliament would be the legislature, and the national governments would form a kind of regional senate, like the German Bundesrat. Every EU state, she said, should join the euro.

Do we need to be part of a European state in order to sell to, and buy from, our neighbours? Neither Norway nor Switzerland is a member of the EU, but both are, in slightly different forms, full participants in the European single market.

Last year, Norway exported two-and-a-half times as much per head to the EU as we did, and Switzerland four-and-a-half times as much.

Both countries are covered by the four freedoms of the single market — that is, free movement of goods, services, people and capital — but remain outside the EU’s political structures, outside the Common Agricultural and Fisheries Policies and, critically, outside the Common External Tariff, levied on all goods imported into the EU.

In other words, they can negotiate a free-trade deal with, say, China. We cannot, having abandoned our trade policy to Brussels on the day that we joined.

I can’t help noticing that Norway and Switzerland enjoy the highest standards of living in Europe. Four million Norwegians and seven million Swiss are evidently able not just to survive, but massively to outperform the EU as independent states.

Does Mrs Merkel expect us to believe that 62 million Britons are too few?

The central economic fact of this century is the rise of the middle class in what we still think of as the developing world. David Cameron boasted in his party conference speech last month that, over the past two years, our exports to Brazil were up 25 per cent, to China up 40 per cent, and to Russia up 80 per cent.

He didn’t mention that our exports to the EU over the same period had fallen. As long as we are part of the EU’s Common External Tariff, we can’t fully exploit the opportunities elsewhere.

The euro crisis has brought poverty and stagnation to Europe, but, according to the IMF, the Commonwealth will grow at 7.3 per cent annually for the next five years.

The real isolationist position is thinking that we can thrive as a member of a cramped and declining European customs union when the growth is taking place across the oceans.

I don’t blame Mrs Merkel for having a different view. Few things are as offensive as the suggestion that the EU is some sort of cover for German imperialism.

Far from being domineering, Germans have shown an extraordinary willingness to subordinate themselves to Brussels, for reasons which are, in the context of German history, perfectly honourable.

For Mrs Merkel’s generation, European integration was the magic wand that took a broken, occupied, partitioned and dishonoured country after the War and made it wealthy, prosperous, trusted and free.

It is understandably beyond criticism. As the Chancellor argued when asking her MPs to cough up for the EU’s bailout fund, ‘no one can take for granted another 50 years of peace in Europe’.

For what it’s worth, I profoundly disagree with her analysis. I see the EU not as a cause but as a symptom of a European peace based on the defeat of fascism, the spread of democracy and the Nato alliance. But I don’t for a moment question her right — or her countrymen’s — to make their own choices.

So if the Germans feel that they are better off in a federal system, pooling their finances with more profligate neighbours, we should salute their selflessness. They are our military and commercial partners, and we have a stake in their success.

All we ask in return is an equivalent readiness to let us make our own decisions.

We may no longer be the chief power on Earth, but we are a large, maritime nation, tied by language and law, by habit and history, to every continent.

We want the friendliest possible relations with our European allies; yet we lift our eyes, also, to more distant horizons. And we don’t feel that we’re quite finished yet.

As Dame Judi Dench, quoting Tennyson, puts it in the current Bond film Skyfall: ‘Though much is taken, much abides; And though we are not now that strength which in old days moved Earth and Heaven, that which we are, we are.’