The UK’s European dilemma

As a new and young leader of the Conservative party, David Cameron urged his party to talk about the issues that mattered most in people’s lives instead of ‘banging on about Europe’. That now seems naive. The EU, and the vexed issue of a referendum, has been a continual theme of his premiership. As the election approaches, UKIP, the anti-EU insurgent, stalks the main parties and frames the debate.

It was not clear where European policy would go under a coalition composed of the most Eurosceptic and most pro-European of the main parties. It has certainly moved – or been dragged – a long way from its starting point. The coalition agreement spoke of Britain playing a ‘leading role’ in the EU and being a ‘positive participant’. This was never going to be easy given the hostility to the EU on the Conservative benches, and the success of UKIP in articulating the grievances of ‘left-behind’ voters. Instead, European policy under this government has been marked by a tendency to be inconstant and complacent, oscillating between pragmatism and obstructionism with a casualness that many find unsettling.

Pragmatism has brought some achievements for Cameron, including a limit on the EU budget, a symbolic priority, and a double majority voting compromise at the European Banking Authority. The obstructionism has been more high profile and often brought isolation or frustration. The December 2011 ‘veto’ of the fiscal compact – a series of measures to strengthen economic governance in the Eurozone – led 25 other member states to go ahead with a treaty anyway.

Similarly, Cameron’s rear-guard action against Jean-Claude Juncker’s campaign to be president of the European Commission led to a similar level of isolation. It illustrated another tendency of coalition European policy: the frequent clash between gesture politics for domestic consumption and the need to win allies for wider EU reform. The irony is that, thus far, the Juncker Commission’s priorities and personnel fit as well as could be hoped for with a British agenda.

The turning point in Cameron’s European policy came with his commitment to hold an In/Out referendum. He hopes to renegotiate the terms of Britain’s membership and put that reformed relationship before the public. Many EU governments are sympathetic but unclear as to the detail of the desired reforms. At present, the vagueness of Cameron’s ‘new settlement’ means it is hard to know what victory looks like. Where he has given more details – such as on free movement – the reaction has been mixed.

There has been a notable effort to court Germany and Angela Merkel. The Germans are not unreceptive: they are strong supporters of UK membership and have repeatedly stressed their willingness to accommodate UK concerns, just not at any price. The fundamentals – including free movement – must be left in place.

Conceptually, Cameron’s renegotiation is ambitious. The arbitrary deadline of 2017 creates the risk that the process will be ongoing or incomplete by the time of a vote. The hope that a German-inspired treaty change to reinforce monetary union would allow the UK to negotiate reforms or special privileges is fading. Few EU leaders are enthusiastic about major treaty changes (which could trigger referenda in their own states) and much has been done outside the treaties. The risk is that the UK’s negotiating tone has made Cameron’s campaign less about changing Europe for the benefit of all, and more about cutting a special deal for Britain. The latter will be harder to achieve and worse for the EU overall.

Labour meanwhile has wrestled with whether or not to commit to an In/Out referendum, and decided to do so only should there be a further transfer of powers to Brussels. That is something which would be unlikely and probably avoidable. It gives the party the ability to say they have offered a referendum without accepting much risk that they will actually have to hold one.

In truth, most of the principles Cameron has outlined would probably be accepted by many in Labour. There is plenty of overlap on the substance too, such as reform of the Common Agricultural Policy and the role of national parliaments in decision-making. The key difference is that Labour have not – yet – put Britain’s membership on the table, and would seek change and reform as a committed participant in the European project.

Where are the public in all this? UKIP’s success in the European elections in 2014 has given the impression of a rising tide of hostility to the EU. Undoubtedly, there is a reservoir of Euroscepticism among the public. They see more costs than benefits to membership and many would like to leave. UK citizens are less likely to think of themselves as European citizens compared with most of their continental peers (although Bulgarians, Italians and Greeks are even less likely to). At present, slightly more of the public would vote to stay in the EU than to leave (43 per cent to 37 per cent in YouGov’s January 2015 poll).

The most recent Chatham House/YouGov survey found though that these headline numbers obscure the wide variations among the public. Voters in Scotland and London would vote to stay in while those in the rest of England and Wales would vote to leave. Young people are much more supportive of the EU, while older voters tend to be much more negative. The public associate the EU with bureaucracy and a loss of national power but there has been a consistent – if modest – improvement in perceptions. It is possible that Euroscepticism may have passed its peak.

Cameron’s promise of a referendum, a move with wide public support, has led to new advocacy groups forming on both sides of the divide. A richer discussion on the EU, its virtues and its vices, is a good thing, as long as it can move beyond disputed statistics and caricatures. Although Europe is not that high in the public’s list of concerns, the EU is a key dimension of some of the issues that will shape this election campaign, not least immigration. The irony is that a campaign which will be infused with plenty of Euroscepticism will probably lead to a more typically continental outcome: another coalition.

This article is published in collaboration with Chatham House. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Thomas Raines is a Research Associate and Programme Manager, Europe Programme.

Image: The European Union flag is pictured in a window reflecting a street in London. REUTERS/Luke MacGregor.