Wednesday, November 26, 2014

David Cameron’s Euro-Nemesis

LONDON – Unlike some in Britain’s Conservative Party, Prime Minister David Cameron has not previously given the impression of being obsessed with Europe. He demonstrated no enthusiasm for the European Union, but he appeared clearly less exercised by its supposed iniquities than many Tories are.

This view of Cameron’s position is now difficult to sustain. His long-gestating speech on Europe, although containing elements that many might share, also sows the seeds for a prolonged and acrimonious debate – and not just in Britain. Conservatives in the House of Commons (and in the wider party) want to be reassured that their leader shares their antagonism for the entire European integration process. They have not forgotten or pardoned his “treachery” in refusing to hold a referendum on the Lisbon Treaty, signed by his predecessor, Gordon Brown. With his speech, that reassurance may now have been given.

Cameron, of course, faced a difficult task with his party, which required a statement from him of his European policy. Cameron then had to find something appropriate to say. He needed to placate Tories and his domestic critics while avoiding the economic and political havoc that would be caused by announcing an imminent referendum that might lead to the United Kingdom’s withdrawal from the EU. The time that he took to decide what he would say attests to the difficulty of squaring that circle.

In fact, as Cameron’s speech made clear, his solution to his dilemma – to buy himself short-term peace from his critics at the expense of potentially making his (and Britain’s) problems more intractable in the long term – is hardly new. It was already clear that Cameron wanted to push any possibility of a referendum into the most distant possible future. The idea that he would seek to renegotiate the terms of Britain’s EU membership is also familiar from his earlier speeches and interviews.

Now that position has been bluntly and uncompromisingly expressed. The demand for far-reaching change in the structure and functioning of the EU, including repatriation of powers to Britain, is a major new demarche at a difficult time for Europe.

Cameron has said on several occasions that he wishes to avoid a referendum revolving around the simple choice of continued EU membership on the basis of the current terms of membership. Already some are claiming to discern in his European policy the makings of an heir to Harold Wilson, another famous “renegotiator” of Britain’s terms of membership in the then-European Community who went on to win a referendum on Europe.

Britain’s relationship with European integration has been a difficult one, regardless of which party has been in power (Wilson, after all, was a Labour prime minister). This was inevitable from the outset, owing to Britain’s deep and irreconcilable disagreement with virtually all other EU member states on the fundamental issue of pooling sovereignty.

Essentially, the British point of view has been that a loose confederation of nation-states cooperating on trade is as much Europe as the UK needs. But Britain joined the European Community, not just the free-trade area that Cameron now apparently wants.

Nonetheless, the undertow of Euro-skepticism in British politics has never diminished and was evident in Cameron’s speech. Even the supremacy of European law in defined areas was accepted only reluctantly by Britain, and long after many others had done so. Indeed, in his speech, Cameron could not resist a passing shot at the European Court of Justice.

Britain has made major positive contributions to Europe, particularly with respect to the single market. But it is no exaggeration to state that whenever Britain has perceived an opportunity to wage a war of attrition against the European supranational project, it has done so, opposing any substantial increase in the EU’s competences or resources. Given that this position reflects the British public’s attitude toward the EU, it is not surprising. But it nonetheless distresses other member states, particularly those, like Germany, that recognize the great benefit of having a country with a strongly pro-free trade position and a deep commitment to the rule of law play an important role in the EU.

The prolonged period of renegotiation now proposed by Cameron implies high costs for both sides. For starters, it creates a source of deep and prolonged uncertainty at a time when the eurozone crisis already has called into question the EU’s long-term health, if not its survival.

Moreover, Cameron’s strategy seems unlikely to lead to an outcome that satisfies anyone. If it is intended to be a negotiation that takes place in the context of broader treaty talks, it may not happen in the foreseeable future. European Council President Herman Van Rompuy, among others, seems to doubt the need for a new treaty, which would require the unanimous support of the member states – some of which are sharply opposed – to enter into force. Indeed, Cameron recognized this explicitly in his speech, so the new treaty to embody a “new settlement” for Britain may have to be negotiated with all member states as a separate exercise.

Part of this negotiation apparently would entail a repatriation of powers, requiring the consent of all EU members – and making the conditions under which Cameron’s renegotiation is supposed to take place both legally and politically uncertain. Many European politicians would view a member state’s repatriation of competences as a totally destructive precedent, and thus would oppose it resolutely.

The net result is that it seems highly probable that any attempted achievement of a “new settlement,” including repatriation of competences, will make it much more difficult for Britain to remain in the EU than would be the case if a straightforward “in/out” referendum were held now. So, far from reassuring anyone (including Tory Euro-skeptics), Cameron’s stance heralds a new era of turbulence and uncertainty for Britain and its European partners.

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    1. CommentedBrian Cronin

      Sutherland is Ireland's cheerleader in chief for all things EU and sees nothing wrong in the ECBs foisting of billions of Euro of Anglo-Irish Bank debt on the backs of Irish taxpayers. Of course his position in Goldman Sachs in incidental in all of this. His opinions reflect the simple minded view of the Irish political establishment that what is good for the EU is good for Ireland - a variation on the old fenian rallying cry of "England's difficulty is Ireland's opportunity"(clearly never the case, by the way). Having listened to Cameron's speech, it seems to me that the citizens of many EU countries, except maybe Luxembourg and Belgium, would agree with it's sentiments. The EU has done things arse-ways, a currency union before a political union will not work. However, as there was (and still is not) no appetite for any political union, democracy was by-passed .

    2. CommentedMargaret Bowker

      At first on reading Peter Sutherland's article, it seemed against any form of renegotiation or referendum, but on coming to the final paragraph, it was clear the uncertainty of an up to four year wait was the main issue. An immediate referendum, whilst solving this problem, could easily cause a bigger one by giving no alternative to an in/out, as we stand, question and risk the 20% undecided vote of a generally euroscptic nation, joining those believing no was the only answer, which the tone of Peter Sutherland's article indicated was undesirable.

      However, a couple of other points were much clearer. The argument that David Cameron might be seen as a modern day Harold Wilson, with regard to renegotiation, didn't seem to carry weight. The Sixties and Seventies were more about personal rights as I remember, in gender and other issues. In the forty to fifty years since that period, the world has changed significantly, particularly in the media and self-expression. Such - this is harmless, just trust us - persuasion would never happen in the present time.

      It seemed also that too little was made of the Single Market aspect of the UK's value. This is extremely important, especially at present with the Free Trade talks betweeen the US and the EU likely to start next month. The UK has a lot to offer and pragmatism will have its place in the EU/UK negotiations.

      Just a brief response, but it was a very thought-provoking, enjoyable article. Last thought - investment is the watchword for the immediate future. Boris is about to say so at Davos apparently, my thoughts were in a commentary in the WSJ yesterday. (Cameron pledges EU vote) There's a lot of potential investment out there. Lack of confidence is misplaced. Let's hope the corporations go for growth.

    3. CommentedAntónio Correia

      Yes, "The demand for far-reaching change in the structure and functioning of the EU (...) is a major new demarche at a difficult time for Europe". In these days, an increasingly wider consensus on the major flaws of the EU construction, over the last two decades, has emerged and can no longer be ignored: just remember the sinking of Titanic - a huge, record-breaking construction - one century ago...

      The Maastricht Treaty was announced as a "great leap FORWARD". Since then, only "FORWARD moves" have been allowed in the Maastricht-born "European Union" - mainly the creation of the "single currency" and the birth of a Eurozone with more and more states involved, according to their will and their capability of meeting the doubtful set of "Maastricht criteria" when joining the "single" currency area. Any move which may be seen as a "backward move" has been strictly forbidden, even if nobody can take for granted that this disunited "European Union" is moving forward to something that looks like the promised land. In fact, it is increasingly clear that this road is a "road to nowhere", besides being increasingly painful for more and more member states to go ahead, under the approach which has been adopted to "keep the markets calm" and "save the Euro" - while avoiding the appropriate fiscal transfers and resorting to lending under AUSTERITY constraints. In these days, the European Union is repeatedly following the recommendation: "Keep moving FORWARD, either slowly or rapidly, either jointly or at several speeds!".

      Yes, as Paul Krugman recently said, "The Euro is a shaky construction". Besides ignoring the macroeconomic imbalances within the EU, in the "Maastricht criteria" for Eurozone membership as well as in the subsequent "stability" pacts, the Euro has been designed and confirmed – by Delors et al and followers – as a "single currency" instead of a (much more realistic) "common currency". Now, it is very clear that this was a very bad choice, namely because other components of Delors's dream are missing - such as a European budget amounting, at least, to some "3% [!] of the European GDP".

      Two decades after the Maastricht Treaty, a COMPLETELY NOVEL EU TREATY is mandatory - not a mere set of "positive" , incremental amendments -, so as to avoid a sad situation, in the near future, where the foreseen "European common home" becomes replaced by a true "European house of correction". We need to build a true European Union through a cooperative European disunion, where the Euro survives as a "common", parallel currency - INCLUDING FOR THE UNITED KINGDOM and the other nine "non-Euro states" - but no longer as the "single currency" for a fraction of the EU (currently 17 out of 27 member states)

      [ ]:

      ” – The Euro should be a COMMON currency within the future EU – including the EU27 members outside the current ‘Euro Area’ – but not necessarily the SINGLE currency.
      - In this context, the coexistence of TWO parallel currencies should be allowed in each EU member state (under certain conditions, established in a novel European Treaty), within the framework of an appropriate “Cooperative European Disunion” .
      - Besides the “Common Euro”, the complementary currency in each member state could be either a “national currency” (…) or a completely new currency, shared by that member state and some other “compatible” EU member states, taking into account both the relevant macroeconomic issues and appropriate geographic, historic and cultural issues.”

    4. CommentedShane Beck

      I don't see the point of a 2015 referendum, since the EU won't renegotiate or repatriate sovereignty (it can't or the EU will effectively unravel) and Britain's long standing distrust of the EU will still be there. Might as we hold it in 2012. Or better yet the EU could bite the bullet and kick Britain out of the EU. After all Britain needs the EU far more than the EU needs Britain.....

    5. CommentedGregory Marthews

      What is frequently forgotten by especially worldwide observers of the UK is that the system we have is an archaic system dreamt up by the controlling Elite in 1688 to entrench Parliamentary power. The EU consists of varying degrees of the Republic with entrenched checks and balances to empower the citizens. The UK has no such checks, and so limps along as a poor example of democracy in action. Those in power are canny enough to give enough freedom to ensure that the status quo is not disrupted, while the second chamber is maintained in as weak a form as possible, and the division between the have's and havenot's continues to rise while those who have, entrench their historical advantage through their better schools and greater resources.

      With this in mind the EU project is the one great opportunity for the people of the UK to gain some rights which cannot be taken away from them. However we are currently in a time of great change. The EU is struggling with the global downturn and the need for a banking union to underpin the Euro, so the Conservative Party has seen its opportunity, maybe a quick vote now, when they are at their weakest, allied with a knee jerk isolationism from the media will swing the vote to an outright rejection?

      Look at it from the point of view of those in charge: They had years of Empire which they now look back on in fond regard, only to find that in the modern globalised world they are being outflanked by issues which are stubbornly global and which require the UK to cooperate to a greater and greater degree. Gone are the days when you needed only to send a battleship to hammer a port until it opened up to trade.

      So the question remains, do we wish to move away from such elitism and towards a more meritocratic world? Or do we hide behind isolationism and hope that eventually the world economy will recover enough for us to claim that our system works fine without such usual checks as a written constitution etc?

      The Conservatives are hoping that they can get a vote in now and secure a new relationship which means they do not need to bow to such global pressures. One should ask what laws they/we would like to avoid, and why? Do they wish to undercut the rest of the EU by offering the UK workers at a cut price by any chance? Without any recourse to pesky human rights? Why do we want the right to set shoe sizes to a different scale (for example). How would this help? There is a reason why so much of our legislature is from the EU: there is no point in having a different rule for us. The idea that there should be one rule for one set of people and one rule for another in an anachronism.

      There may be a need for review though. The EU is stubbornly refusing to move towards a more democratic system, while assuming that everyone is on board. And do we need this debate now? Surely any investment in the UK will now go elsewhere in the EU. Why invest in the UK if their access to the EU market is in question?

      So will this myopic political opportunism by the Conservatives work? Can they persuade the people to vote for a change back to the 'good old days' of Empire? Only time will tell.

        CommentedCelt Darnell

        Oh come now, you can do better than this.

        "[T]he system we have is an archaic system dreamt up by the controlling Elite in 1688 to entrench Parliamentary power"? You could say the same about the US system established in 1787-9.
        "The EU consists of varying degrees of the Republic with entrenched checks and balances to empower the citizens."
        Yes, so did the Soviet Union.

        "With this in mind the EU project is the one great opportunity for the people of the UK to gain some rights which cannot be taken away from them."
        That is the complete opposite of the truth.
        "Look at it from the point of view of those in charge: They had years of Empire which they now look back on in fond regard"
        Yes, yes, all Eurosceptics miss the Empire. Fact: Sir Oswald Mosley was pro-European. Thus, all Europhiles are fascists.
        Anyone can play that game.
        This is not about the Glorious Revolution, the Empire or even the flippin' Tories -- it's about the British people's opposition to being dragged into a political union with foreigners against our consent.
        And for all your chatter about "democracy", it's your side that is hell-bent on preventing us from having a referendum on the matter.
        It won't work.