Cameron’s EU balancing act makes treaty renegotiation unavoidable

Christopher Howarth
IT’S months later than planned, but David Cameron will finally deliver his much-anticipated speech on Europe today. We first expected him to speak last autumn. Then an unfortunate clash with the anniversary of the Élysée Treaty prompted a rethink. And crisis in Algeria forced another postponement.

But Cameron’s “speech to end all Europe speeches” is also overdue because of wider developments within the European Union. Given the implications of the ongoing Eurozone debt crisis – and subsequent steps towards banking and fiscal union – the shifting sands of EU politics are moving quickly. For the UK, the status quo is no longer an option. An alternative vision, detailing our new position within a changing EU, had become unavoidable.

The defining moment in the UK’s relationship with the EU was its decision not to join the euro. Significantly, this meant that Britain would never follow Germany, France and others in the pursuit of “ever closer union”. A multi-tier Europe was implicit – it was obvious that, at the first point of crisis, countries that shared the single currency would be forced to do more things in common.

But what can Cameron say to remedy this situation? Leaked extracts give us some room for cheer. He must firstly set out a plan for an EU based on a balancing act between cooperation and real devolution of power. Hints about “a lack of democratic and accountability and consent”, felt “particularly acutely in Britain”, suggest he’s heading in that direction. And given the political momentum behind a referendum, Cameron almost can’t avoid promising one. It would certainly go some way to addressing the democratic deficit that has grown in recent years between British voters and Brussels.

Most likely, a referendum will come in the form of “fresh consent” on a new renegotiated deal. This isn’t a risk-free strategy, but would finally put Britain’s membership of the EU on a stable footing, after years of dissatisfaction and sniping. Some will criticise Cameron for not offering a vote today, but he’s right to say this would be a false choice. First, according to the latest polling by YouGov, most voters want to stay in the EU, but on renegotiated terms. Secondly, the EU is itself in a state of flux. It would be odd to offer a referendum on a moving target.

And will renegotiation succeed? There are no guarantees, but the situation is more promising than many believe. First, countries like Germany, the Netherlands and Sweden rely on the UK to push for liberal economics and free trade. Without British membership, the EU could succumb to protectionist tendencies from the Mediterranean bloc. It’s true that Angela Merkel may not wish to revisit the accepted wisdom of EU integration. But given the fact that Britain is now Germany’s biggest trading partner – with trade worth €153bn (£128.3bn) in the first nine months of 2012 – it still has most to lose from a UK exit, the most likely result of a failure to allow reform. The UK also has a strong moral case for adjusting its membership terms. After all, it is not Britain that is changing the rules of the game.

Critically, renegotiation will only succeed if (as happened with banking union) the UK can secure an EU that works for all its members, and that means picking the right issues. The single market must remain the preserve of all member states, and not be subject to a “club within a club”. But many of the reforms the UK should hope to see enacted do not require treaty changes, and many have wide EU support. These include an end to the recycling of wasteful regeneration cash, and the scaling back of growth-destroying farm subsidies under the Common Agricultural Policy. Others, however, will require a general discussion the next time a treaty change is required for the Eurozone – and that will happen sooner or later. The UK and its allies will need to know what to ask for.

Despite the positive situation Cameron is in, it’s important to realise that his vision of powers flowing back to member states is not shared by all in his coalition, nor in his party. It is also unclear when the next Eurozone treaty change will happen. This makes action this side of the general election unlikely. There are therefore several big “ifs” in Cameron’s approach – the biggest being whether the Conservatives get re-elected. But the complex interaction between Eurozone and domestic politics will fuel uncertainty, no matter who’s in power. At least Cameron is trying to set out a plan.

Christopher Howarth is a senior political analyst at Open Europe.