The EU treaties are not fit for purpose, but leaving makes no sense. Negotiation is possible without risking free trade
The stupid Euro questions refuse to go away. Are you in favour of Europe? Do you want to leave Europe? Do you want an in-out referendum? Do you want to be Switzerland or Norway? They stumble on through a storm of cliches, about sleep-walking, club members, departure lounges and minutes to midnight. The brain softens. The public screams, then it yawns.
On Friday the prime minister, David Cameron, is to give an oration, heavily trailed and chaotically scheduled, to calibrate yet again Britain’s ever troubled relationship with the continent of Europe. It began with Offa and Ethelred, continued with the Plantagenets, Pitts and Palmerston, and is not over yet. This time the reality is simple. The European treaties forged at Rome, Maastricht and Lisbon, and other fields of cloth of gold, are no longer fit for purpose. They have reduced Europe to an economic mess. The eurozone’s 17 members must redefine themselves against the other 10, and fast. To pretend otherwise is silly.
From the moment in 2003 that Gordon Brown stopped Tony Blair joining the euro, Cameron’s speech was waiting to happen. The evolving euro would sooner or later need a tight political corset to enforce fiscal, budgetary and monetary union. Britain and other states would not join this, and would therefore need to negotiate their relationship with this euro-specific regime. Labour’s Ed Miliband and Ed Balls, both party to Brown’s victory over Blair, know this well. There need be no disagreement.
As Cameron and his deputy, Nick Clegg, tried to say on the radio this week, against a barrage of “pro-European” BBC interviewers, we can debate how soon this negotiation need take place. Clegg is right that there is no urgency, since the new eurozone institutions are not in place. Cameron is right to feel he needs to prepare the ground. Public opinion is getting ever more hostile not just to the euro but to the whole “European” project.
The referendum is a side issue. A vote now to “leave Europe” would still necessitate a negotiation, but with the negotiators’ hands tied against compromise. A vote to “stay in” would sabotage Britain’s bargaining leverage. Clegg’s attempt to rewrite his own pledge, so as to have a referendum only if “more powers” were ceded to Brussels, will not wash. The subject is way beyond the referendum being merely an option.
The euro crisis is thus an opportunity for the most serious restructuring of political Europe since the postwar settlement. The Nobel peace prize awarded to the EU last year may have seemed ludicrous, but it set a seal on an era. The centripetal forces of European union did bring peace and prosperity. They bonded a continent that had been the cradle of war since the dawn of time. It was worth recognising the fact.
Equally it is worth recognising that this age is over. Its degeneration into a currency union of highly disparate economies may have been a mistake, that has plunged half of Europe into unemployment, misery and depression. But it has at least precipitated reform. Some countries may feel ready for the disciplines of closer federal union with Germany. Others, not just Britain, will reject such surrender of sovereignty. They will wish to draw back.
Few people can really want a return to a Europe of border-hopping, tax-dodging, undercutting and regulatory chaos. Most are fed up with Brussels’ power-grabbing and corruption, its inane directives and trivial regulations, its subsidies to lobbyists and tonnes of misshapen carrots and dead fish. Like Moscow under the Soviets and Washington today under lobbyists, Brussels does the cause of centralist government no favours.
This does not mean “leaving Europe”. In a modern international economy, the concept as such makes no sense. It means a new deal for a Britain emphatically outside the eurozone and wishing to relieve itself of the worst of the post-Maastricht regime. Cameron’s task is to replace the absolutism of in-or-out with the relativism of the opt-out. He may one day have to confront the consequence of breakdown, but he (and Clegg) are right to protest that answering such a hypothetical is, at this stage, bad negotiating. Total breakdown is as unthinkable as total subservience to fiscal and monetary union.
Cameron’s minimalist position is to revert to what the rest of Europe found acceptable at Maastricht in 1991. This included a British opt-out from the social chapter, later reversed by Blair. Further opt-outs might include justice, civil rights and welfare entitlement. None directly concerns the primary objective of free trade. Each can be negotiated ad hoc. Others, such as banking regulation or the botched common agriculture policy, cannot be dodged as they involve crucial British interests.
Such stuff can be dismissed as “the devil in the detail”, but detail is what international relations are about. The tragedy of postwar Europe, from Britain’s standpoint, has been the hijacking of a feasible concept – a genuinely working commercial union – by a grotesque bureaucratic enterprise ridden with corruption. This in turn was overlain by the bumbling search for “ever closer union”. It stirred the embers of nationalism across Europe. In Britain it pandered to the xenophobia of an island people.
Cameron has time. This floorshow changes costume every week. The eurozone may shrink into a tight German confederation. The easier discipline of a free-trade area may hold increasing appeal to states in southern Europe and Scandinavia. German euro-politics, as fierce as Britain’s, may drive Germany itself out of the eurozone, precipitating the mother of all renegotiations. It is even possible that pigs might fly, and a reformation blow through Brussels’ gilded haunts, dismantling its directives factory and initiating an austere decentralism.
All thing are possible. Since, whatever happens, Britain must emerge from this transition newly linked to the rest of Europe, what opt-outs are won and what are not may prove a matter of nuance. The need to stem European fascism or communism through political union is no longer necessary or realistic. The issue is economics and the ending of impediments to trade.
Clearly, the EU might mutate into a political assemblage with which Britons could never want to associate. That is not currently the case. For the present the tautology applies: Britain’s advantage is to renegotiate a deal with Europe that is to Britain’s advantage. Cameron’s vacillations over Europe have made this job harder than it need be. But hard it is not.