There is an article in The Scotsman (HERE) by Brian Monteith of Global Britain, a Brexiteer, Conservative and now Communications Director at Global Britain, a website which describes itself as having fought for Britain to leave the EU since 1997, before the word Brexit was even thought of. The article has the grand title: Eurozone stats should underline advantages of leaving EU - it's a very well crafted article setting out what Mr Monteith explains is why "the UK’s economic future lies outside the EU and why we should be confident of economic success after our departure".
Since there are no economic advantages to leaving the EU as far as I'm concerned, it takes quite a bit of clever statistical stuff to make it appear that black is actually white.
Essentially, the claim is that in 1994 the US and EU economies were more or less the same size while now the USA is 30% larger and therefore must have grown faster. This is what he says:
"To understand what is happening we need to look back to the period before the euro was launched in 1999. In 1994 the economies of the US and the future Eurozone were of broadly similar size worth 24.9 per cent and 24.5 per cent of global GDP respectively. Today the US economy is 30 per cent larger than the Eurozone. Simply put, EU economic performance has been the global laggard over the short and long term".
He gives no sources for his figures, they are simply assertions and I was a bit dubious, Mr Monteith is hardly an unbiased source. So I searched for a more balanced article with figures I could rely on. It is not easy to find these numbers and often they seem to be different even for the same years, based on different methods of calculating them. However, I did find an academic paper (therefore more likely to be peer reviewed and trustworthy) from The University of Pennsylvania (HERE) dated 2015. I can quote from the article:
"The United States and the European Union (EU) have engaged in a friendly economic rivalry for decades. Both have been quite successful, but which of the powerhouses holds the competitive edge? While the two have roughly the same GDP, around €18.9 trillion for the EU and €18.3 trillion for the U.S. at the end of 2015, the EU has a larger population, 507 million citizens versus 319 million, meaning this calculation comes out in the U.S.’s favor".
It's true the EU shrank after 2015 and the gap is a bit wider now. The figures for 2017 are US GDP (HERE) $19.39 Trillion and EU GDP (HERE) $17.277. The USA is bigger by 12.2%. It is NOT 30% larger as Monteith claims.
Moreover the University of Pennsylvania article goes on:
"But simply looking at this headline figure does not give a sufficiently nuanced view of the comparative strengths of the two powerful areas. We need to dig deeper to see how — and more importantly, for whom — the two deploy the wealth they create.
"Although counterintuitive on the surface, that exploration will reveal that the EU is better at harnessing that wealth creation for the betterment of its citizens. And that betterment is both intentional and at the core of Europe’s economic success.
"Since 1994, GDP per capita growth has expanded in parallel in the U.S. and in those countries that use the euro as a currency, the euro area — Figure 1".
Monteith is wrong to assert the US has grown substantially quicker than the EU. In 1994 US GDP was $10.4 Trillion (HERE). I can't find an equivalent figure for the EU in 1994, but since the average annual growth per capita was the same over the twenty year period, and the two economies are of similar size in 2015, they must have been of similar size in 1994 - as they were in 2015:
"While the two have roughly the same GDP, around €18.9 trillion for the EU and €18.3 trillion for the U.S. at the end of 2015, the EU has a larger population, 507 million citizens versus 319 million, meaning this calculation comes out in the U.S.’s favor".
But this is surely the telling statistic:
"From 2006 to 2013 Germany and the U.S. both recorded an average GDP per capita growth rate of 1.1%. Germany’s ability to convert growth into economic wellbeing was equivalent to an economy growing at an average rate of 6.2%, while the U.S. managed a measly average rate of just 0.5%. Improvements in health services, affordable education and good public transportation have immediate benefits for citizens’ lives".
This is surely what the EU is about - improving the lives of its citizens.
Mr Monteith also makes use of Singapore to show that distance is not a barrier to trade, that the so-called gravity model doesn't work. He says we do more trade with Singapore than we do with Denmark (both with populations around 5.6 million) even though Singapore is 6700 miles away:
"Our politicians regularly discount small faraway countries as if they are unimportant while small countries in the EU are given greater importance. Yet while the UK exported £6.3bn of goods and services to Denmark less than 800 miles away we managed to export £8.6bn to Singapore – some 36 per cent more – even though it is over 6,700 miles away and outside the EU’s single market. Does it not strike readers as odd that UK trade not only is growing faster and in surplus where it trades generally under WTO rules than within the EU single market where we shoulder a £96bn deficit?"
The ONS figures for 2016 show we exported £5.7 billion to Denmark and £7.2 billion to Singapore.
But this is the exception that proves the rule. Singapore is an outrider. If he had chosen India for example he would have found our exports were also £5.7 billion to a nation with a population 200 times the size of Denmark (virtually ANY other country would have reinforced the rule that you trade more with countries closest to you). Singapore is also a regional hub. You can see this in that our main export to them is power generating equipment, while their main export is also power generation equipment.
So while he paints a glowing picture of life outside the EU others (HERE) and (HERE) are far less optimistic.
It's just another example of a Brexiteer trying to prop up a failing ideology.
"While the two have roughly the same GDP, around €18.9 trillion for the EU and €18.3 trillion for the U.S. at the end of 2015, the EU has a larger population, 507 million citizens versus 319 million, meaning this calculation comes out in the U.S.’s favor".
But this is surely the telling statistic:
"From 2006 to 2013 Germany and the U.S. both recorded an average GDP per capita growth rate of 1.1%. Germany’s ability to convert growth into economic wellbeing was equivalent to an economy growing at an average rate of 6.2%, while the U.S. managed a measly average rate of just 0.5%. Improvements in health services, affordable education and good public transportation have immediate benefits for citizens’ lives".
This is surely what the EU is about - improving the lives of its citizens.
Mr Monteith also makes use of Singapore to show that distance is not a barrier to trade, that the so-called gravity model doesn't work. He says we do more trade with Singapore than we do with Denmark (both with populations around 5.6 million) even though Singapore is 6700 miles away:
"Our politicians regularly discount small faraway countries as if they are unimportant while small countries in the EU are given greater importance. Yet while the UK exported £6.3bn of goods and services to Denmark less than 800 miles away we managed to export £8.6bn to Singapore – some 36 per cent more – even though it is over 6,700 miles away and outside the EU’s single market. Does it not strike readers as odd that UK trade not only is growing faster and in surplus where it trades generally under WTO rules than within the EU single market where we shoulder a £96bn deficit?"
The ONS figures for 2016 show we exported £5.7 billion to Denmark and £7.2 billion to Singapore.
But this is the exception that proves the rule. Singapore is an outrider. If he had chosen India for example he would have found our exports were also £5.7 billion to a nation with a population 200 times the size of Denmark (virtually ANY other country would have reinforced the rule that you trade more with countries closest to you). Singapore is also a regional hub. You can see this in that our main export to them is power generating equipment, while their main export is also power generation equipment.
So while he paints a glowing picture of life outside the EU others (HERE) and (HERE) are far less optimistic.
It's just another example of a Brexiteer trying to prop up a failing ideology.
