Against the tide: Cameron’s sterling effort

By:
David Roche
Published on:

Britain’s renegotiation of its relationship with the EU could be a good thing for Europe too.

David Cameron sterling-R-600
Prime minister David Cameron wants concessions about UK participation in EU policies


Last month UK prime minister David Cameron launched negotiations with EU leaders for better terms for the UK to stay in the European Union. The EU December summit will be the first chapter in those negotiations leading up to a referendum, which will probably come by next summer. 

Let me say at the start that I reckon the British people will vote to stay in the EU. Eurosceptic fog shouldn’t obscure the ultimate outcome of the UK’s in-or-out referendum. It is highly likely that Cameron can secure the concessions he needs from Brussels to sell his renegotiation platform at home. In fact, it suits both sides to facilitate this. 

There is a broad perception that euro-scepticism runs deep in UK society. But support for EU membership in the UK has usually been ahead of the sceptics. While joining the eurozone has never been remotely appealing – a conviction reinforced by Europe’s debt crises – the benefits of being in the Union are acknowledged. Equally, so are the risks presented by a Brexit.

Reassessment

There has also been a shift in attitudes on the continent. Britain was often regarded as an unhelpful partner, forever sniping from the sidelines. Now there has been a reassessment of exactly what Britain’s membership means to the rest of the EU.

The notion that the bloc could survive unscathed by a Brexit has lost ground. Fear of European fragmentation is palpable among policymakers. The reason is the continuing rise of anti-EU parties in almost every member state. Even among moderate pro-European voters there is a growing sense of Brussels’ overreach. British renegotiation could be helpful in creating a renewed sense of balance across the region. A previously closed door is now visibly ajar.

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The EU now seems far more amenable to the idea of a two-speed Europe (which already exists de-facto), creating breathing space between the single-currency bloc and those that remain outside. Not just those with opt outs, but also those dragging their feet (Poland, Czech Republic and Hungary, most notably). 

Fairness

Cameron also wants concessions about UK participation in EU policies. He wants a 'fairness clause’ to ensure there would be no discrimination between euro and non-eurozone member states in future European arrangements. This would ensure that no nucleus of European countries would be created inside the EU (the dreaded 'Directoire’) at the expense of UK access.

Free movement of labour is not up for discussion. So the Cameron government believes the UK ought to be given flexibility in other areas, such as welfare payments. Britain would be allowed to impose a 'cooling off’ period on social security payments. Newly arrived EU citizens wouldn’t be entitled to claim benefits immediately; they might be required to show some solid link to a paid job or occupation in the UK before getting benefits. 

Finally, the UK wants an improved 'yellow-card’ system against legislation and rulings issued by the EU Commission. Currently, member parliaments are entitled to warn of their opposition to Commission proposals. If a third of them issue yellow cards, then the Commission is obliged to reconsider. Britain now wants to transform the yellow-card system into a red-card one. Red cards change the rules radically. If a requisite number of parliaments vote against a Commission proposal, it is automatically dead. And Cameron wants to reduce the number of opponents required for a red card from a third to a quarter.

Support

Germany seems the most amenable to these ideas, and Merkel supports most of them. But Merkel’s political capital is being drained by the migration crisis, so her ability to push concessions past some of the more intransigent pro-European leaders might be difficult. 

A red-card system will be a hard sell to east-European leaders. They oppose EU members being given a blocking power on EU development that could magnify the east/west divide. And they don’t want their own immigrants to be discriminated against for social security payments in countries like the UK.

The targeted package looks substantial, certainly from the perspective of an electorate more worried about Brussels encroachment than actually leaving the EU. If such a package were negotiated, it would be enough for the government to hold a referendum and kill the whole Brexit issue for a generation. That would be a notable success for Cameron and the UK.

 

David Roche is president of Independent Strategy Ltd, a London-based research firm. www.instrategy.com