Friday, October 24, 2014
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Europe’s National Wild Cards

DUBLIN – Europe’s needs and Europeans’ desires are at odds. At a time when strong, coordinated action is needed to stave off financial collapse in the European Union, the popular support that drove European integration over the last six decades is waning.

After almost 70 years of peace, Europeans seem to have forgotten why unity was so important, indulging nationalist sentiment without regard for its potential consequences. At the same time, they fail to grasp that their economies are too closely interconnected for independent economic policy to work.

This failure is rooted in electoral politics’ confinement to individual countries, which forces politicians to pretend that they can address economic issues with national policies alone. Indeed, politicians face no electoral pressure to pursue broader action, even if it would bring domestic benefits.

Now the euro crisis is forcing EU leaders to address institutional changes – namely the creation of banking, fiscal, and political union – that they have long deferred. But, while member states must agree unanimously on all key decisions, their mandates oblige them to view EU issues through the prism of national interest. The brinkmanship and bargaining that this approach encourages make it impossible to develop and present pan-European visions to the public.

This problem is perhaps most evident in the United Kingdom. Although the UK is not a eurozone member, its cooperation is crucial if EU institutions are to be used to solve the euro crisis. But, rather than offer the support that its European partners need, Britain is pursuing its own agenda.

For example, by refusing to sign the fiscal compact, which imposes stricter controls on national spending in the eurozone, the UK has forced the arrangement to operate outside EU mechanisms. The UK’s rationale for its refusal – that no protocol was included in the treaty exempting the financial sector from certain regulations – suggests that similar outcomes can be expected in future negotiations.

In fact, as Prime Minister David Cameron recently explained, his government seeks to renegotiate the terms of its EU membership, and to hold a referendum on the outcome, which potentially would decide whether the UK remains an EU member. While the UK is entirely free to leave the EU, given that it is a treaty-based union, the move carries serious risks.

In preparation for the renegotiation, UK leaders are conducting a comprehensive audit of EU laws in order to identify powers that could be reclaimed. This could have a positive outcome, highlighting powers that other member states agree should be returned to national governments.

The problem is that the UK has a strong interest in retaining full access to the EU market – the eurozone accounts for half of its exports of goods and services – but seems unwilling to submit to any obligation. As a result, British officials appear more likely to develop proposals that suit only the UK, and that could give it an unfair advantage. This would hinder negotiations, and could ultimately damage public support for EU membership.

Like all markets, the EU’s Single Market is a political construct that relies on common rules, regulations, and conventions for stability and reliability. Returning to national governments rule-making powers that could be used to impose criteria aimed at excluding others would endanger the entire market.

Likewise, some regulation – for example, environmental rules, product-safety standards, and anti-trust enforcement – is needed to ensure that competition is fair. Before the referendum is held, the UK public must understand that such matters simply cannot be returned to national authorities.

Beyond damaging relations with the EU, the UK’s actions could undermine efforts to address Europe’s economic, social, and identity crises. If the UK presents a unilateral list of proposals for new EU rules, the other 26 EU member states could be encouraged to engage in brinkmanship of their own. The likely result – 27 disparate sets of demands – could lead to the serial re-opening of old compromises on issues that have little relevance to the urgent threats that the EU now faces.

Member states simply do not have the time to conduct a case-by-case analysis of requests from the UK – or the concomitant deliberations. And the European Court of Justice would have difficulty reconciling a special set of exceptions for one country with the shared rights and freedoms on which the EU is based.

Cameron’s supporters cite the precedent set by Labour Prime Minister Harold Wilson, who in 1975 renegotiated the terms of Britain’s  membership in the European Economic Community – terms that his conservative predecessor, Edward Heath, had accepted a few years earlier – and then held a referendum on continued EEC membership. This tactic worked once, they argue, and it will work again.

But Wilson had to negotiate with eight fairly similar countries. By contrast, Cameron will face 27 distinct countries (including Croatia, which will join later this year), many of which are facing serious domestic challenges. As a result, the negotiations have far more serious political implications – and far more room for error.

Despite these risks, many British politicians believe that they can satisfy voters at the expense of “Europe,” perpetuating the idea that ties with the EU – a supposedly homogeneous foreign entity – amount to little more than a disposable convenience. Now, it is up to the British public to think deeply about the benefits and sacrifices implicit in EU membership.

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  1. CommentedSteven M. Calascione

    Will Scotland look on, while the Conservatives and UKIP soldier on toward a post-EU dawn? Or, indeed, will Milliband rally his troops to head off a regroup?

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