Bowles warns of 'ticking time bomb' of UK exit from EU

The influential Liberal Democrat MEP Sharon Bowles has criticised right-wing Conservatives and Eurosceptic parties such as UKIP for living in a "1930s fantasy of imperial power" and warned of a "ticking time bomb" that could lead to the United Kingdom's withdrawal from the European Union.

In a speech that won a standing ovation at the Lib Dem conference in Brighton today, Bowles – who chairs the European Parliament's economic affairs committee – said an isolated Britain would be "no good to anyone" and described Prime Minister David Cameron's veto at last December's EU summit as a "cancer" that was "souring both relations and structures in Europe". She called on party members to "rise now to keep Britain in Europe".

Meanwhile in a scathing attack on "Europhobes" who promoted the idea of the eurozone collapsing, Bowles asked: "Are they mad? That would make current economic challenges look like a walk in the park." She said nobody "from the United States to China" wanted the euro to fail because they know "the world is interconnected, that their trade, their jobs, their economies are all affected."

"Back here, ever since the financial crisis morphed into the eurozone crisis it has been a field day for Eurosceptics saying 'I told you so'," Bowles said. "What a waste of space. Yes, the financial crisis laid bare flaws in the operation of the euro – notably feeble ineptitude of the finance ministers who were meant to police it. But raking over old arguments – like old superstitions with entrails and incantation – does nothing to help us move forward and fix the future, nothing to keep the UK up with the pace of change."

She added: "UKIP and tea party Tories live in some 1930s fantasy of imperial power, even though we are a lot closer to 2030. They suggest that the open, mixed trading economy of the UK can function like the niche economy of Norway. But they omit to mention that Norway and Switzerland contribute to parts of the EU budget and end up obeying Europe's rules anyway." Bowles said that as chairwoman of the ECON committee she knew the reality: "Norwegian and Swiss representatives beat a path to my door asking for help."

An EU exit would make negotiating trade deals more difficult and reduce the UK's importance to the US, Bowles said. "Europhobes talk of a UK freed from the 'shackles' of Europe, snuggling up to the US, and trading at liberty with emerging markets. They forget to mention that Europe already has, or is negotiating, free trade deals with almost every country in the world. Other countries take time to talk to the world's largest trading bloc.

"And what of the special relationship? The US wants a strong British voice at the EU table, but they will soon look elsewhere if we're not there. An isolated Britain is no good to anyone. Britain is heard in Washington, Beijing and Moscow when we exercise influence and leadership in Brussels, Paris and Berlin. Britain is stronger when it stands with our partners in Europe." The UK should use its seat at the decision-making table "wisely", she said.

But she warned that the UK's withdrawal from the EU was not inconceivable. She said there was "a ticking time bomb, which may see us on our way out of Europe. It won't come from a referendum, it will come from acquiescence. And it's short fuse. Remember the veto – who asked you? That little surprise is still a cancer souring both relations and structures in Europe." Cameron wielded the veto last December, keeping the UK out of the new fiscal compact limiting debts and deficits and ensuring it was implemented outside of the EU treaties.

"European Central Bank-based banking union could unbalance the single market in financial services and marginalise the UK," Bowles said of recent proposals for a single supervisory authority for the eurozone's 6,000 banks. "In the parliament the moody is grim, with other countries' MEPs saying this is the moment other coutries choose whether the UK is in or out. Some countries' ministers say the same." She added: "Negotiations are extremely sensitive, and yes with moments to be tough, but the last thing the UK needs is constant bellowing about repatriation of powers and wanton vetoes from the tea party Tories and silly part of the City."

Calling on City bosses to "tell the prime minister, chancellor, public ande media" about these concerns otherwise "the UK will be quietly on the way to EU sidelines or exit", Bowles concluded: "The City can't continue to be the leading financial centre in Europe if Britain leaves Europe. There is no escaping international regulation of financial services in today's world. Either Brussels does it or Washington does it. What would the City prefer?  Regulation from Washington without the UK, or regulation from Brussels with the UK?" 

But UKIP MEP Godfrey Bloom described Bowles' comments as "an astonishing outburst of ignorance". He told PublicServiceEurope.com: "The bottom line is that the eurozone is a demonstrable failure, the solutions that Europe propose are driving millions into poverty, and Bowles – a patent lawyer by trade – seems to think that the City loves Europe but is terrified by papers like the Daily Express into pretending it doesn't. Hokum. The EU has no love for the City and the rules she is attempting to foist on them are hostile to its, and the country's interests."

Bowles' speech came a day after Lib Dem chief secretary to the treasury Danny Alexander, also speaking at the conference, described those who favoured a UK exit from the EU as "totally potty" and said holding a referendum on the country's membership of the bloc – a move favoured by many of the Lib Dems' coalition partners in the Conservative party – would be a "distraction". Just two weeks ago Lib Dem leader and deputy prime minister Nick Clegg criticised the Tories as "infantile" and "increasingly Eurosceptic".