Wednesday, February 05, 2014

What if... Britain had voted to leave the EEC in 1975?

Awkwardly Ever After

Published on the DGAP's IP Journal

In our eighth contribution in the PISM/DGAP counterfactuals series, SAIS's Tim Oliver examines what the UK and EU might look like today if the UK’s referendum on Europe had failed nearly 40 years ago.
On June 5, 1975 a Labour government put a choice to the British people: they could either leave the European Economic Community or, as Prime Minister Harold Wilson urged them to do, vote to stay on the new terms his government had negotiated. A 67 percent vote in favor, with a turnout of 65 percent, seemed a solid commitment. European integration has nevertheless remained one of the most divisive issues in British politics, splitting parties and helping topple prime ministers. Relations between the UK and the rest of Europe have been difficult too, typified by opt-outs and vetoes.
It is therefore easy to surmise that both British politics and European integration would have been better off had the British voted to leave in 1975. However, the present “What if….” analysis suggests that both the UK and the EEC would have remained tightly bound to each other, drawn together by the UK’s need for some form of close economic and political relationship and the EEC’s desire to manage its role as the central economic and political organization of Europe. The fact that both would have found this setup difficult offers pointers to what may lie ahead should Britain ever vote to leave.
The Alternative EEC: Decentralized and Liberal
The morning of June 6,1975 was a sombre one for the European Commission. It had viewed a successful enlargement to include the UK as a useful means of counterbalancing France and thus of asserting its own political predominance. Instead, Britain’s exit proved a trigger for the member governments to invest more thoroughly in bilateral relations, with the effect that the EEC’s central institutions remained quite weak. Searching for means of pushing forward with integration, the Commission’s proposed Single European Act thus reflected a careful compromise between north and south.
The proposal would have reduced the common market’s remaining economic barriers but also put in place strong common social rights. In negotiations between governments, however, it was the Anglo-Saxon neoliberal economic agenda then sweeping the US that shaped the result, with West Germany supported by the Netherlands promoting market liberalization. Unsurprisingly, there was resistance, with each of the seven member states taking turns being labelled “the awkward partner.” France’s willingness in particular to object and threaten vetoes was the source of much debate and led to its growing sense of semidetachment.
And yet, soon enough there were grounds for political deepening, this time in the form of another ambitious enlargement project. Despite  “losing the UK,” renewed enlargement was driven powerfully by changes in the Mediterranean. Even the British government, sitting now in the European Free Trade Area and wary of the EEC’s growing market size, supported membership for Greece, Portugal, and Spain, recognizing that economic links alone would be insufficient to support political changes in these countries. This gave the EEC a significant opportunity to build its position as the predominant organization of European politics.
Nevertheless, enlargement triggered bitter budgetary arguments – again mainly involving France – as European funds flowed southward. These tensions reached a new high as the Cold War reached its denouement. The reunification of Germany and the applications for EEC membership from Eastern Europe (strongly backed by a US keen to see the EEC compliment NATO expansion) shifted Europe’s center eastward. In a twist, France now became the member state most eager to talk of a new attempt at British membership, with Paris seeing this as a way to counterbalance the new Germany and an eastward shift of power.
The Alternative Britain: Fragmented and Interventionist
For British politics, the morning of June 6, 1975 was also a somber one. This publicly-imposed U-turn was a humiliation for the government akin to the Suez debacle of 1956. The resignation of Prime Minister Harold Wilson further weakened a Labour Party governing on a slim majority. But it was probably the leadership of the center-right Conservative Party – then the more pro-European of the two main parties – which was most damaged by the outcome. Even if they weren’t in power, many Tories saw the no vote as a personal defeat on an issue they considered central to Britain’s future....