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The Awkward Partner

euWith its European partners exasperated by Britain’s obstinacy and foot-dragging, former Diplomatic Editor of The Times, Michael Binyon, considers the consequences of quitting the EU.

Is Britain heading for an exit from the European Union? In a long-awaited speech earlier this year, Prime Minister David Cameron has declared that if the Conservatives win the next general election, he will renegotiate the terms of Britain’s EU membership and then hold a referendum on staying in or leaving the EU before the end of 2017. If a vote was taken today, a large majority would vote to leave. Britain’s EU partners are appalled. If Britain goes, it will be the first country to quit the 27-member union. The consequences for the other members could be momentous.

Britain has been a member of the EU since 1973, but has always been an awkward partner. London refused to join the original six members who set up the Common Market, suspicious of any formal links with its European neighbours. Long jealous of their history and sovereignty, the British thought they could forge a relationship instead with the British Commonwealth and America. But the economic success of the Common Market persuaded Britain to apply – only to find that General de Gaulle was hostile to British membership and vetoed the first two attempts to join, in 1963 and 1967.

Since becoming a full member, however, Britain seems to have proved the French suspicions right. Again and again, the British have opposed, or tried to slow down, the push by France and Germany for closer political union. Margaret Thatcher famously swung her handbag to force her European partners to offer her a rebate on Britain’s financial contributions to the EU budget. And her successor, John Major, demanded an opt-out from some of the clauses of the Maastricht Treaty which gave Brussels more power and turned the Common Market into the European Union. The issue split the ruling Conservative party, and the Government refused to back proposals for a single currency. When the euro was finally introduced in 2002, Britain was not part of it. Nor is Britain part of the passport-free Schengen travel zone.

Against this background, the demands by many Conservative politicians for powers now wielded by Brussels to be given back to member states have aroused suspicion in the EU. They have also divided political opinion in Britain. Most businessmen and economists know that EU membership of the single market is essential for trade, and that Britain’s economy, heavily dependent on exports to Europe, would be in deep trouble outside the EU. But ordinary citizens have a more insular view. Having long been critical of regulations from Brussels, they look across the Channel and see the difficulties in the eurozone and want no part in any closer political union with their neighbours. Right-wing Conservatives, modelling their views on Mrs Thatcher, are especially critical. They are threatening open rebellion against Cameron’s leadership and especially against the more pro-European Liberal Democrats, the junior partner in the coalition. And a growing number are defecting to the small but noisy UK Independence Party, which is openly hostile to EU membership.

Cameron spent months preparing his big speech on relations with Europe (and finally had to postpone it a few days because of the hostage crisis in Algeria). Before he spoke, he was offered conflicting advice by all sides. British businessmen warned him against a referendum, knowing that it might lead to an exit from the EU. Right-wing politicians demanded a vote immediately. The press told him to stop dithering and demonstrate leadership. European leaders expressed concern, and senior German politicians rejected any British demand to renegotiate membership, saying this would open a ‘Pandora’s Box’ with every other member also wanting a special deal. A leading German Christian Democrat said Cameron’s threat to ‘blackmail’ other EU states by blocking other measures unless he won what he wanted was foolish.

Cameron’s actual speech was a clever compromise, intended to delay any hasty decision. He did not demand any special advantages for Britain, but said all the EU states would benefit from reform. He knows that many people in other member states agree that Brussels has become too powerful and unaccountable, and that other European politicians also believe changes are needed. He also said that he would not start negotiating until after the coming British general election – due in 2015. A referendum on remaining in the EU would be held after the negotiations. If he obtains the changes he wants, he will campaign for a yes vote ‘with all my heart and soul’. He did not say if he would recommend a no vote if he cannot get what he wants.

Europe’s leaders were warned about his speech. Diplomatically, they said they were ready to discuss his points. But there is no doubt that Britain’s partners are unwilling to make many concessions. The country that matters most is Germany, the economic and political leader of the EU. Angela Merkel, and German voters, also share some of Cameron’s concerns. And Germany is closer to Britain on such issues as free trade and liberalisation than it is to France. But Germany has insisted that Britain cannot pick and choose which bits of the EU to accept. François Hollande, the French president, agreed.

While some EU member states such as Sweden would approve a deepening of the Single Market in services, an enhanced role for national parliaments and the return of some powers from Brussels, they are unlikely to endorse Cameron’s more ambitious demands: changes to the common fisheries policy, an exemption from EU labour market laws (to give employers greater flexibility), changes in the free movement of labour (to stop migrants from Eastern Europe flooding into Britain), and a limit to police and judicial co-operation. And if Cameron attempts to use leverage by threatening to block approval of reforms needed to make economic integration in the eurozone more effective, that would anger his EU partners enormously.

The British Conservative party has been split over Europe for years, although ordinary voters do not see this as a priority. Cameron has left himself room for manoeuvre, however. First, if the Conservatives do not win the next election, the issue of a referendum will have to be decided by the Labour party – which is still unsure whether to hold one or not. Second, Cameron knows that he cannot really stop the eurozone countries going ahead with any proposed changes without Britain. Third, he has told eurosceptics in his party that their calls for Britain to become like Norway and Switzerland, outside the EU but enjoying free trade agreements, are silly: Britain would be forced to follow EU rules without any power to influence them. And finally Cameron has not yet spelt out his demands, but has done enough to stop a rebellion in his party or defections to the UK Independence Party. Much could happen in the next four years that might stop Britain voting to leave the EU.

Would it matter if Britain left? It would certainly be a huge blow to the union’s political standing and credibility. Many EU members, though irked by London, welcome British pragmatism and experience, its close ties with the United States, its willingness to contribute to Europe’s defence with a strong army and its experience, as a member of the UN Security Council, in global affairs. No country has ever yet left the EU (except Greenland, a former colony of Denmark, which was never a full member). If Britain left, others might also head for the exit, especially wealthy countries such as Sweden or Finland, who are angered at paying so much for the poorer southern members. So although Merkel and others are probably exasperated by Britain’s obstinacy and foot-dragging, they will do their best to help Cameron to keep Britain within the EU. The next few years will show whether that will be enough to overcome the hostility of the europhobes in Britain’s parliament and in its press.


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