Monday, January 20, 2014

Questions about the EU-UK relationship.

In response to my piece with John Bruton on the LSE British Politics Blog, two friends asked questions on Facebook about how the UK’s debate connects/compares with those taking place elsewhere in the EU. I don’t want to post their questions here without their permission, and their questions are far more complex than I've just summarized them. I felt I should post my lengthy - and somewhat rambling - reply here rather than post it as a ridiculously long reply on Facebook.

You're absolutely right: Britain's relationship with the EU is not the only one that is subject to domestic demands and strong debates. Throughout the EU there are demands for change, which as you note, are currently fragmented and incoherent. Nor is it just the UK where those demands have been growing stronger, although again, this has not necessarily resulted - yet - in any clarity. And the tension between the UK and the EU, and the perception this is all about the UK being awkward, is nothing new. I often think back to the title of a book by Stephen George which coined a phrase you hear all the time about the UK-EU relationship: "An Awkward Partner: Britain in the European Community." Note the indefinite article in the title. Britain is AN awkward partner, not THE awkward partner as you'll often hear it said. Every member state of the EU can be a pain in the arse at some point, e.g. the UK hasn't brought the Euro to the edge of collapse, has never rejected an EU treaty, has a good rate of enforcing EU law etc etc. But there are limits to how far this can be pushed, this George's books, and this is perhaps the problem for current UK-EU relations.

There is a feeling among other governments that the UK’s behaviour reflects naked national self-interest with only casual regard to the wider European interest. This isn't helped by the perception it’s not even about the UK’s national interest and more about the Conservative Party and UKIP. HMG has become aware of this and has changed its approach from demanding unilateral changes to the EU for the UK’s benefit, to pushing more the idea of EU-wide reform that’s good for the whole EU. That helps (see below), but the perception remains this is just about the UK and that the UK is giving little thought to where this could take the rest of the EU.

The UK has scored some notable results with the budget and some other areas. But it remains very difficult for the rest of the EU to feel they can engage with UK efforts to reform the EU without falling into the trap of helping the UK/Tory party more than the EU on a wider basis. Take HMG’s current ‘Review into the Balance of Competences’, i.e. an incredibly detailed review of what the EU does in the UK, and whether the balance between the EU and member states (with the UK as the focus) is right (conclusion so far is that the balance is right. It’s provoked cries of a whitewash by Tory Eurosceptics who now argue the review should focus less on the evidence collected and more on what the British people feel!) It’s an incredible exercise from an academic perspective. Rarely do you see a state sit down and assess the impact of the international on it. The reports are being published in tranches and will eventually inform any UK attempt at a renegotiation. But the rest of the EU has spurned involvement in it, seeing it as just a UK power-grab rather than a genuine attempt to analyse the EU and thus prepare the ground for wider EU change. The same might be said for the large number of ideas, events, publications etc. coming out of the UK on how to reform the EU, and there are a large number of them. I’m pretty sure the competences review will be closely read all over the EU, but few will want to admit to it. Here the UK is running the risk of ‘right message, wrong messenger.’

And it’s not as if the rest of the EU don’t have their own ideas. Others in the EU feel they have been very busy not just proposing changes but making big changes. The Greeks are hardly likely to think it’s novel to hear demands for the EU to change or hear ideas about how this should happen and what their role should be. The Germans are constantly pushing EU reform, especially to make sure the huge investments – both financial and political – they've made in the EU work out. While not wanting to play down Germany’s power in the EU, I think it would pay for the UK to think about how even Germany – with its huge investments in the EU and the EU’s dependence on it - finds it difficult to get changes to the EU. The Dutch launched their own review similar to the UK’s, but were keen to make clear the differences. And yes, they do have growing levels of Euroscepticism. The next European Parliament elections will make that very clear. What’s different with other EU members is that they’re agendas are not quite so dominated (at least not yet) by a ‘give us what we want, or we leave’ message.

And this brings us to whether the EU should worry about the UK leaving/pushing open reform which then spreads/converges with other demands across the EU. Yes, this is a concern but it’s not just about the UK and it’s a fear that remains vague. First, unsurprisingly the rest of the EU is paying far more attention to ideas/public frustrations about how to reform the Eurozone than it is to ideas that appear to originate in how to change the UK-EU relationship. It is change to the EU to deal with the Eurozone that is therefore the big can of worms that is yet to be opened fully. That fits into the UK agenda, more of which below. The concern with the UK – and I've been arguing for a while that the rest of the EU does need to take more notice of this – is that wider changes to the EU could be triggered by the UK whichever way it goes. Here we need to dust down the good old domino theory. Domino theory 1: UK pushes and opens a renegotiation of UK-EU relations and therefore opens the possibility of wider changes to EU (potentially very damaging to the union’s coherence), many of which would be driven by other states also wanting to ‘pick and mix’ their membership requirements. Domino theory 2: UK fails to open renegotiations and leaves, triggering changes to the internal balance of power in the EU and changes to the direction and nature of the EU, possibly pushing others to leave.

The key here is whether, as you ask, the sentiments of the British and other Europeans could converge. If so then domino theory 1 becomes a bigger concern (if, that is, there was no agreement on what was being converged, just that the timing of those demands converged). In a way this is exactly what the PM is hoping for. He’s banking on some form of treaty change/big changes between 2015-2017 (and thus after the next UK general election, therefore plausibly pushing the issue off the agenda until then, at least that’s the PM’s hope!), treaty changes based on the need to change the EU to adapt to the Eurozone crisis. So Britain – or more specifically Cameron - is himself relying on others in the EU to help trigger change the UK can then secure a deal through. This in itself angers other governments: why should Germany, Denmark, France etc be made to change the EU in line with a UK electoral timetable? Others also have election timetables too, and while that doesn't make convergence impossible, it might not happen when Cameron wants it.

That aside, we’re now into the territory of how to do this. A big new treaty? Wow. Very few – at least right now - want to have to go down that route again even though it could be the only way to set in stone the changes made to the Eurozone. But it could mean Lisbon all over again. And Lisbon began long ago with the 2001-2003 work of the European Convention, a large gathering of opinions on how to reform the EU that led to the European Constitution, which when rejected was changed slightly and passed (with incredible difficulty) as the Lisbon Treaty. So the treaty option is currently not appealing. Changes could be made without a treaty change, but that could happen now and neither Cameron or the rest of the EU are ready for that. In a twist the UK is the country that now pushes the treaty change option hardest, despite in the past being the state that instead preferred pragmatic non-treaty changes. And it’s the rest of the EU that is now minded to push for pragmatic changes as opposed to whole new treaties. So how then do we reconcile it all? That’s the million dollar question. My concern is that the UK generally seems oblivious to the situation the rest of the EU is also in and how the UK has to fit into it if it is to have any success at all. For me, I’m also worried the rest of the EU is being too dismissive/overlooking the UK. Miliband’s warning the UK is in danger of sleepwalking out of the EU also works with the EU: it’s in danger of being asleep as the UK sleepwalks out the door. I don’t want to overplay Britain’s position, but what a UK exit might mean for the EU (or for EU-US, EU-NATO, EU-Russia/Eastern Europe, EU-Turkey, Eurozone, German-French relations etc) is generally not openly talked about. In fact being made to think about such an unpalatable development is one reason that some in the rest of the EU are angry at the approach the UK is taking. They consider it blackmail.

Not sure if that helped! What I despair at when listening to the UK debate is how oblivious even those in quite senior positions in UK politics are at what the rest of the EU is doing/thinking. There is also a lazy assumption that it’s just about getting close to the Germans: a sort of hug them close approach. Germany and Merkel are key, but they’re not the only ones. Changing the EU is a huge task, and not one the UK can do easily or opt out of. Even if the UK leaves, the way the EU changes will be of direct concern to the UK. There’s no getting away from it (and the same can be said to a lesser extent for the EU: the UK won’t go away, it will be among the EU’s most important relationships and one that’s constantly pushing the EU to change in ways of interest to it.)

Finally, you're right about the Scots. I'm doing some work on this at the moment - and so excuse me while I get some of this off my chest - and I'm tired of hearing the false dichotomy of a pro-European Scottish white to a Eurosceptic English black. It overlooks so much. On the one hand it overlooks how, to pick one example, hopes for independence would be very badly damaged if Salmond said an independent Scotland should join the Euro. There's still some polling done on opinion on UK membership of the Euro. Support in Scotland for the UK (and ok, the question is about the UK and not necessarily whether it should happen to an independent Scotland) joining the Euro is around 11%. So it would be mad for the SNP to push that right now (although that might change in the longer-term, but certainly not in time for the referendum). On the other hand the dichotomy overlooks how levels of Euroscepticism vary across England, with a large number of polls showing Londoners holding higher levels of support for the EU than the Scots (e.g. in the aforementioned polling on the Euro, 14% of Londoners want the UK to join!) Generally the UK overall has a strong Eurosceptic tone. I think it says more of how dire the pro-European outlook can sometimes be in the UK that people point to Scotland for signs of pro-Europeanism. Once at an event in Germany I heard a respected British journalist answer a question about Scotland and the EU by quoting figures from a recent opinion poll that showed regional support for the suggestion the UK should leave the EU. The UK average, he pointed out, was around 50%. He then said “But in Scotland only 40% want the UK to quit the EU." A colleague later asked me, "What does he mean *only* 40%?" The situation on the EU in Scotland is more complex than I have space or time to discuss here, and for a variety of reasons the political elite/culture is more comfortable with putting across a more pro-European message than you'll find coming out of Westminster. But as you note, this is not just about 'Little Englanders.'

Anyway, I have skimmed over some very complex issues, I'm not sure if I've answered the questions entirely, and I know some people out there will certainly disagree with what I've said (this is about the EU, after all). Comments welcome.

Friday, January 17, 2014

Consent of a majority of the rest of the EU will be needed if there is to be a new UK-EU relationship

A piece published with John Bruton on LSE's British Politics and Policy blog.

Consent of a majority of the rest of the EU will be needed if there is to be a new UK-EU relationship

The only place in the EU where the issues that might arise from a UK renegotiation or withdrawal are being debated in any detail is in the UK itself. But any change in the relationship will have an impact on all member states. Tim Oliver and John Bruton write that it is therefore not simply about what Britain wants from its relationship with the EU, but also what the other 27 states would want, and whether these can be reconciled.

The possibility of the UK leaving the EU is likely to remain a live issue for many years to come. It is not an issue that London, Brussels, Dublin, the rest of Europe or the UK’s allies should casually dismiss. An in-out referendum could be brought about by a government seeking a renegotiation and referendum, triggered by a treaty change or new treaty, or from a backbench rebellion in a House of Commons where a government has a slim majority.

The only place in the EU where the issues that might arise from a UK renegotiation or withdrawal are being debated in any detail is in the UK itself. Even then the debate is narrowly focussed on UK concerns, and takes little account of the effect on the 27 other member states of the EU of the various UK renegotiation/withdrawal scenarios. Nor, with a few exceptions, is there any appreciation of what a separation would mean for Britain and Europe’s allies and others around the world.

The downside of this approach is that UK public and media opinion may develop unrealistic expectations of the terms it could achieve in a renegotiation, leading to disappointment, and a consequent increase in support for outright withdrawal. In fact, EU countries are already so integrated with one another that any UK attempts to alter the relationship will be a domestic issue for all members. Furthermore, there is a risk that the UK public will make the mistake of thinking that they will be negotiating with a single entity called “Europe”, when in fact they will be involved in something much more complex: a negotiation with 27 other EU members, all of whom will have different red lines, different ambitions, and different axes to grind.Other EU leaders have taken a vow of silence on the internal UK debate, even though it is one in which their own electorates have a vital interest. Understandably, they do not want to aggravate UK public opinion, which might claim to resent “foreign” intervention in what would be construed, inaccurately, as a purely “domestic” UK matter.

Even if the UK withdraws, the painful truth for the UK – government, parties, business and public – is that the consent of a majority of the rest of the EU will be needed for a new UK-EU relationship. Britain cannot simply assume this will happen. For example, it will be for the rest of the EU to decide whether it allows continued privileged access for the UK to the EU Single Market (for example in financial services).

Certainly both sides have much to lose if the negotiations fail. The UK runs an overall £28 billion (2011 figures) trade deficit in goods and services with the rest of the EU, and by 2050 the UK could be the largest country in the EU in terms of population and economy. But the £28 billion forms a small part of an EU economic area worth around £11 trillion. Focusing on the economics also overlooks the politics. The EU is a political union, and the UK will retain a deep political and strategic interest in how the EU evolves, whether it is a member or not. Shaping that political union, in British interests, from the outside will be very difficult indeed.

So should the UK decide to leave, what could it expect the EU to set down as negotiating red lines? This would all depend on the rest of the EU’s assessments of the economic and political implications for the EU of a UK exit; an issue which, with a few exceptions, has been subject to little or no discussion.

A UK withdrawal would take place under the EU Treaty’s Article 50, requiring both the European Council and the European Parliament to agree the terms to be granted to the UK for a new relationship. The decisive role of the Parliament, or that of the Council, is little appreciated in the UK. Similarly few appreciate the potential for these two, and potentially the European Court of Justice, to block or delay a deal, for example on grounds of unfair discrimination.

It is highly likely that, as with Norway and Switzerland, the UK will be expected to make a continuing financial contribution to the EU budget, in return for UK access to the EU single market. It is highly unlikely the EU will willingly accept any formal UK involvement in EU decision making that compromises the EU’s own sovereignty.

Brussels will expect the UK, even if outside the EU, to uphold the rights of EU citizens in the UK, as the rest of the EU will be expected to uphold the existing rights of UK citizens living elsewhere in the EU. UK involvement in deals such as the Transatlantic Trade and Investment Partnership will be possible, but strictly only on whatever terms are agreed between Brussels and Washington D.C.

EU and UK officials, diplomats and negotiators will, no doubt, work hard and constructively to find solutions to these dilemmas.

The problem will lie in the politics. Will the UK accept what the EU has to offer and what can it do if it doesn’t? Could the UK decide to hold a second referendum before any withdrawal actually happens, a sort of double-lock system to ensure the British people are comfortable with what they have been offered by the EU? Could a government be sure it could get any withdrawal bill through the House of Commons if the terms of a new relationship are not to Britain’s benefit?

In the event no agreement was reached within the two years (or no extension to negotiations agreed, which could only be done with the unanimous agreement of all 27 EU states), the UK would be out of the EU, with no special rights at all, and automatically subject to WTO agreed restrictions and tariffs on its exports to EU countries and services. Customs posts would have to be reintroduced on the border in Ireland and at cross-channel ports. It would be a loss for both sides, but more so for the UK.

The UK will also have to ask itself what type of EU it can hope for, if it is no longer a member. The EU will remain the UK’s single largest relationship, dwarfing that with the USA. The UK has to ask itself if it wants the EU to remain a viable and confident organisation, one it is comfortable living next to, and in the shadow of.

In or out of the EU, the UK has a clear interest in the EU remaining effective. An effective EU, like an effective NATO, contributes to European security, and creates a single market that is good for British prosperity. Britain would not sell as much in a Europe that had revereted to 27 different markets with 27 different currencies. An EU that could not make decisions, because it was paralysed by fear about who might be next to follow the UK out the door, would not be good for Britain.

And what might the US and other UK allies think? The UK should not expect the USA to give up on the EU, just because the UK has.

A question likely to weigh heavily in the minds of those in Washington is what a British withdrawal would mean for what was originally an American sponsored project: the European Union. The wider geopolitical implications remain unclear, with possible implications for states such as Turkey, and the future of NATO and European cooperation on defence and security. That UK involvement in European integration has been an important background factor to the Northern Ireland peace process should not be forgotten. The entire dynamics of the relationship between the two parts of Ireland, and within Northern Ireland, would be radically changed by a UK exit from the EU.

The question to ask then is not simply what Britain wants when renegotiating its relationship in the EU or when leaving the EU, but also what each of the other 27 states in the EU would want, and whether these can be reconciled.

Monday, January 06, 2014

A piece for E!Sharp on the British questions that could face the next European Commission

The British questions facing the next Commission

A piece for E!Sharp

The next European Commission, to be appointed after May’s European Parliament elections, will have more than enough on its agenda. The ‘British question’ might be one many in Brussels would prefer to put at the bottom of a list that will include questions about the Eurozone crisis and managing the growing economic and security challenges posed by the world beyond Europe.
But history could play out in a way that Britain poses the next Commission not one question, but a series of questions that could radically change the EU: questions on Scotland; about a renegotiation of UK membership; of how to handle the EU’s first in-out referendum since 1975; what to do in response to British hopes for a new treaty; how to face a host of British initiatives on economic reform or the EU’s security and international standing; and, biggest of all, how to cope with the implications for the EU should the British vote to leave the Union.