Should Britain break from Europe?

"First on the list for 2013 is Europe", says Simon Jenkins in The Guardian. David Cameron has promised an early speech' on the subject. It is expected to set out demands for powers to be repatriated from Brussels, with a view to negotiating a new settlement that will be put to a referendum.

More Britons than ever want to leave Europe' 51% against 40% for staying and disillusionment with Europe has led to record levels of support for the UK Independence Party. Even Jacques Delors, architect of the euro, demonstrated a "sense of realpolitik" last week when he suggested in Handelsblatt, a German newspaper, that if Britain could not support the "trend towards more integration", we could "nevertheless remain friends, but on a different basis". The Union of European Federalists suggests Britain could be given a second-class' membership of the bloc.

It's high time we reassessed our EU membership, says Dominic Lawson in The Independent. When we joined the European Economic Community in 1973, its name was "properly suggestive of an association of entirely independent nations coming together solely for the purpose of trade". Forty years on, Britons are sceptical that being part of the EU is "axiomatically an economic good".

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

It is a "diminishing proportion of our overall trade a function of the fact that Europe's share of global GDP has fallen by half over the past 15 years". Our trade should be less with Europe and more with the developing world.

It should, agrees Daniel Hannan in The Daily Telegraph. But negotiating a new relationship in which we remain part of a European free trade area, but not in a political union, won't be easy.

Brussels defines matters such as the 48-hour week and the emissions trading scheme as single market issues because this makes them subject to majority voting. Since other members "won't want to give Britain a competitive advantage, this is where the hardest pounding will be".

Luckily, we hold a trump card: Britain is the EU's biggest export market. But if Cameron can't strike a deal, "leaving should hold no terrors".

Maybe, but a "decisive break" would "risk the future of the City" and Cameron knows it, says Kamal Ahmed in The Daily Telegraph. According to TheCityUK, a lobby group, the trade surplus with EU member states for financial services grew by 80% between 2005 and 2011.

European regulators and politicians will be "licking their lips at the chance to put the UK at a substantial disadvantage when it comes to new rules for financial regulation". If the City is to convince the public that EU membership is crucial, it must get out there and make its argument.