PARIS – As the euro crisis has widened the gap between the 17 eurozone countries and the European Union’s other ten members, the debate around a “multi-speed Europe,” in which countries pursue deeper integration at different rates, has been reinvigorated. This issue will be at the core of a speech by British Prime Minister David Cameron (scheduled for January 18, but postponed in view of the hostage situation in Algeria), in which he will attempt to redefine the United Kingdom’s relationship with the EU.
Rarely has a speech fueled so much international debate before its delivery. Officially, Cameron favors remaining in the EU, provided that the UK is granted various derogations from common rules and policies. In his speech, he is expected to pledge to renegotiate the terms of Britain’s EU membership, and subsequently to hold a referendum on the revised relationship if he is re-elected in 2015.
Meanwhile, the UK’s allies are growing increasingly nervous. Indeed, the United States and Ireland have publicly urged the UK to remain an EU member. And the Netherlands and Finland have indicated that a British exit would damage their interests, which include retaining the UK as a free-market ally in European negotiations.
Moreover, European Council President Herman Van Rompuy has warned that the plan to repatriate certain powers from the EU could damage the single market. British business leaders and media outlets have also expressed strong support for EU membership, owing to close commercial ties between the UK and the rest of Europe. Even Cameron’s coalition partners, the Liberal Democrats, have voiced concerns about the risks of an exit.
Indeed, a “coalition of the unwilling” is finally forming to counter increasingly dominant Euro-skeptics, reflecting observers’ growing anxiety that Cameron’s risky strategy – which requires a delicate balance between demands and concessions – might fail, and that the UK will eventually leave the EU.
On one hand, many fear that Cameron’s demands are too much for the EU to accept. After all, when Cameron asked at the December 2011 European Council meeting that UK financial services be exempted from common rules in exchange for British support for the EU’s new “fiscal compact,” Britain’s European partners dismissed the notion outright, viewing it as blackmail.
On the other hand, Cameron risks losing face – and the referendum – if he fails to make significant progress when renegotiating the terms of British membership. The UK would then be left with a stark choice: either exit the single market, or acquire a status similar to that of Norway, retaining membership in the single market – thereby reassuring its European partners – but losing all decision-making authority.
But a solution that would satisfy the UK and its EU partners is possible. The Agreement on the European Economic Area could be revised to give EEA member states that are not EU members (such as Norway) equal voting power over relevant common policies. These include single-market-related measures, research and development programs, and cohesion policies.
This approach would allow the UK to gain its desired status: continued participation and influence in the single market and withdrawal from EU policies in areas such as agriculture, taxation, and fiscal federalism. Thus, it would reassure the UK’s EU partners of the country’s membership in the single market. Moreover, the UK could still participate in other EU initiatives (for example, regarding defense and foreign policy) on a case-by-case basis, thereby ensuring that such cooperation is based on shared interests.
This solution would not only correct a democratic anomaly, but would also realign the Economic and Monetary Union with the EU. Further eurozone integration – crucial to ending the euro crisis (even according to Cameron) – would then be significantly easier to accomplish.
In this context, EU member states could choose between two levels of integration. They could either engage in a politically and financially more integrated EU, which more closely associates the eurozone with the countries that intend to join it, or join the enhanced EEA, which would allow non-EU countries to participate in decisions concerning the single market. This would facilitate the integration of new countries into the single market, without destabilizing the political and economic coherence of the EU or the eurozone.
As Cameron attempts to redefine the UK’s relationship with Europe, he should engage his EU partners actively. Only with Europe-wide cooperation can an effective, mutually beneficial compromise be reached.