David Cameron pushes his EU luck

By Anatole Kaletsky
January 17, 2013

Editor’s note: After this column was published, Cameron announced he would be delaying his speech in Amsterdam due to the hostage crisis in Algeria.

Some think the prospect impossible. Many think the outcome inevitable. Most think the question irrelevant.

Will Britain pull out of the European Union or fundamentally renegotiate the terms of its EU membership?

David Cameron promises to let the British people decide between these options sometime after the next general election in 2015. That, at least, is what Cameron is preparing to say in Amsterdam on Friday, in what has been billed as the most important British pronouncement on Europe since Margaret Thatcher’s 1988 speech in Bruges.

That famous speech, in which Thatcher denounced the EU’s plans to create the euro on the grounds that it would lead to a European “Super-state”, is remembered as among her most important and inspiring. But it irrevocably split the Conservative Party, and two years later, precipitated the Iron Lady’s sudden overthrow at what seemed like the height of her career. From the moment Conservative parliamentarians dismissed their greatest post-war leader, in what they themselves quickly diagnosed as a fit of collective madness, the party has been consumed by a crippling sense of guilt, especially on the subject of Europe, which shrewd political commentators have described as the Conservative Party’s Mark of Cain. This curse has manifested itself in many unexpected guises, most recently in the rise of the anti-European UK Independence Party, whose 9 percent support in opinion polls is sufficient to threaten Conservative majorities in dozens of parliamentary seats.

Cameron started his political career as a Conservative Party researcher in the very month that Thatcher delivered the Bruges speech. He is therefore absolutely determined to avoid the same cruel fate as his great predecessor, and believes the best way to do this is to sedate his party’s conflicting passions over Europe.

His new policy is designed to please Euro-skeptics and neutralize UKIP by finally offering the in-or-out referendum the anti-Europeans have been demanding for 20 years. He hopes to mollify pro-Europeans with the sincerity of his promises to engage other governments in constructive negotiations. As for the Tory moderates who do not care much about Europe, and would much rather concentrate on issues such as reviving the economy, they will be relieved that nothing much will happen on the European issue until the 2015 election and probably several years beyond.

The danger for Cameron is that, in trying to pacify all these factions, he may be making promises he cannot keep. European political elites insist that there can be no negotiations, since a new deal for Britain is impossible, and it is equally impossible to imagine Britain leaving the EU. Within Britain, by contrast, many political observers are now convinced that a referendum will inevitably result in a British exit. Most voters, meanwhile, seem skeptical and bored about the whole issue, perhaps believing that EU membership is not very important, one way or the other, in an age of globalization and long-term European decline. 

In this case, however, history may be on the side of the British prime minister, even if Cameron’s tactical maneuverings are motivated not by any carefully considered long-term strategy but merely by political survival. For, despite the present official skepticism in Berlin, Paris and Brussels, renegotiating the EU Treaties may be not just possible for Britain, but necessary for the other EU members. And despite the present cynicism among British voters and pundits, the outcome of these negotiations would be very likely to win clear endorsement, in a referendum that would improve institutional structures and democratic accountability both in Britain and in the EU as a whole. 

The historic stroke of luck for Cameron has been the euro crisis. It is now clear that a single body can only survive in the long term if the euro zone is transformed into a much more cohesive political unit, with much more centralized control over tax and spending policies, some degree of mutual responsibility and support for government debts burdens and new forms of collective control over financial regulation, monetary policy and the central bank. In short, the euro has turned out to be unsustainable in exactly the way Thatcher predicted back in 1988 and that means that the “European Super-state” she conjured up in the Bruges speech will soon become a reality. To create this new state, which might be called the United States of Europe or the European Federation, the present European treaties will have to be drastically revised, probably starting in 2014, despite the vow of silence that EU leaders have sworn on this issue until after the German elections next September or October.

Once the Treaty negotiations begin, two things will become obvious and a third highly probable. First, the new European Federation will exclude not just Britain but several other significant EU members, such as Sweden, Denmark and probably Poland, which have been almost as unwilling as the British to compromise their national sovereignty to the extent that a full-scale federation would require. Secondly, maintaining most of the economic features of the present European single market will be overwhelmingly in the interests both of the single-currency Federation and of the nations such as Britain and Sweden that remain outside. Thirdly, a realignment of Europe that created two parallel institutional structures – a Union to manage the single market and a Federation to build a unified state around the single currency – would draw into the Union several important new countries, such as Switzerland, Norway, and perhaps also Turkey and Russia, that are presently outside the EU and that never accepted the loss of national sovereignty required by the membership of today’s EU, not to mention the future single-currency Federation.

Under these circumstances, a complete restructuring of Britain’s relationship with Europe will become not just possible but inevitable. This reshaping of Europe may take decades, rather than years, to negotiate. But in the end, there is almost certain to be something of historic importance for a British referendum to vote on.

PHOTO: Britain’s Prime Minister David Cameron leaves Number 10 Downing Street to attend Prime Minister’s Questions at parliament in London January 16, 2013. REUTERS/Olivia Harris

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