Seven alternatives to the EU (in case it all gets too much)

As German leaders issue heavy-handed threats, here's a timely survey of Britain’s options

BY Neil Clark LAST UPDATED AT 07:57 ON Wed 16 Nov 2011

A SENIOR German politician has inflamed the great Europe debate by saying, in effect, that all European countries are expected to fall into line behind Germany, Britain included – even over the controversial Robin Hood tax on financial transactions.

David Cameron has argued for months that the City would be decimated by such a tax - while George Osborne has called it a "bullet aimed at the heart of London" - but Angela Merkel and now her close colleague Volker Kauder are having none of it.

Britain must pay up too, they say. Herr Kauder, Christian Democratic Union leader in the German parliament, said last night: "Only going after their own benefit, and refusing to contribute, is not the message we're letting the British get away with."

Just to ensure the tabloids don't forget his name, Kauder also declared that "suddenly Europe is speaking German" in that the majority are backing Merkel's diktats.

Eurosceptic Tories are, unsurprisingly, spitting blood and, once the ramifications filter through, the British public are unlikely to react kindly to Germany's heavy-handed approach.

Three weeks ago, even before the the Greek and Italian governments fell as a result of the euro crisis, an ICM/Guardian poll found 49 per cent of British people would vote to get out of Europe if there were a referendum, against 40 per cent voting to stay.

So, it's a good time to ask - would it really be the disaster Nick Clegg and this fellow europhiles prophecy if Britain did the unthinkable and left the EU?

I would suggest there are several options open to Britain and EU membership is only one of them. Here are seven alternatives:

1. Join Nafta
The idea of Britain leaving the EU and joining Nafta - the North American Free Trade Agreement - was promoted enthusiastically by newspaper proprietor Lord Black and Conservative right-wingers in the 1990s.

Nafta, a tripartite trading bloc which links the economies of the US, Canada and Mexico, has no ambitions of political union, meaning that there would be less infringement of Britain's powers to make its own laws, as is the case currently in the EU.

But while joining Nafta may have seemed attractive in the 1990s, when the US was booming, it's arguably less attractive today, given the sluggishness of the US economy.

2. Join Efta
The European Free Trade Area describes itself as an "intergovernmental organisation set up for the promotion of free trade and economic integration to the benefit of its four Member States: Iceland, Liechtenstein, Norway and Switzerland".

The UK was a founder member of Efta in 1960, but left when it joined the EEC in 1973. Although Iceland suffered an economic crash in 2008, its economy is now recovering while the other three Efta members have for a long time been among Europe's most prosperous economies.

"People in EFTA are more than twice as rich as those in the EU. They also enjoy lower inflation, higher employment, healthier budget surpluses and lower real interest rates," wrote Daniel Hannan MEP, an enthusiast for Britain rejoining Efta, in 2005.

3. Join Efta and the EEA
Three of the four members of Efta (Norway, Iceland and Liechtenstein) are also members of the European Economic Area, established in 1994. The EEA allows members to participate in the EU's Internal Market, without being formal EU members. They are obliged to adopt all EU legislation related to the · 

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