If David Cameron makes a passionate case for the EU, its leaders will help him

If David Cameron makes a passionate case for the EU, its leaders will help him

Opinion piece (The Observer)
21 June 2015

The prime minister must not dance to the tune of his backbenchers at the Brussels summit.The phoney war is almost over. At the Brussels summit on Thursday and Friday, David Cameron will unveil his priorities on EU reform. He hopes to clinch a final deal in December – allowing an in/out referendum to be held in 2016, probably in the autumn. On his recent tour of European capitals, Cameron left the impression that he was serious about winning the referendum. I followed in his wake, and found many of those he had met keen to help him – but absorbed by other issues, such as Mediterranean boat-people and Ukraine’s problems.

The real possibility that Greece will leave the euro is a particular headache for Cameron: Grexit could lead to financial, political and humanitarian crises, distracting EU leaders from British concerns.

Some who had met Cameron told me they worried about his ability to navigate the many obstacles that he will face between now and the referendum. In particular, they wondered whether he regards party unity as more important than winning. They noted his recent about-turns under pressure from anti-EU Tories – on whether ministers would have to support his line in the campaign, and whether the civil service could take sides. His justification for these shifts is that if he can retain the support of moderate Eurosceptics – so that no more than, say, 50 Tory MPs back “Brexit” – he is more likely to win the referendum.

Other EU governments want to see Cameron make the case for membership, which to them means taking on the Eurosceptics and making enemies in his party. Some told me that only when he does that will they believe he is determined to prevent Brexit, and therefore worth negotiating with on a serious basis. But Cameron will not want to make the case in Britain until he has struck a deal in Europe. In the meantime, if he can convince other leaders that he will – as he said in his 2013 Bloomberg speech – fight to keep Britain in the EU “with all my heart and soul”, they will probably do business with him.

EU leaders worry that domestic politics may blow him off course. Will Tory backbenchers push him to demand the unattainable, thereby making it hard for him to claim a successful outcome? So far he has not asked for much that his partners regard as ridiculous, except for the idea that EU migrants should be denied benefits until they have lived in the UK for four years. Will he carry the cut-and-thrust of Westminster politics – focused on victory and defeat – into EU councils, which usually work towards careful compromises that offer something for everybody? Other leaders claim that, if Cameron threatens them, they are less likely to help. But some of them are already resigned to the December summit being the scene of a ferocious battle from which Cameron plans to emerge blood-stained but victorious.

Officials in some capitals told me they were surprised that, on his European tour, Cameron avoided being specific on ideas for reform. The Germans, however, think this tactically wise. As soon as his list of demands is known, Eurosceptics will attack him for a lack of ambition, while integrationists in other capitals will cry “impossible”.

Cameron’s task is that much harder because he has few friends in other EU capitals. His peers view him as “transactional”; someone who is a skilled negotiator on particular issues but fails to invest in long-term relationships. For example, some Italians thought it odd that when he met prime minister Matteo Renzi in Milan, he would not offer to take a single refugee.

Chancellor Angela Merkel of Germany, the most influential EU leader, likes Cameron, but they have several times misunderstood each other (as in December 2011, when he refused to sign a treaty on fiscal discipline because she rejected a Treasury protocol that would have given the City of London some extra protection). Her officials have warned the British not to assume that she can fix the rest of the EU; 26 other governments, plus the commission and parliament, also matter. One senior German said that, though he thought Brexit would be damaging, allowing the UK to undermine the EU’s core principles – by disregarding rules on freedom of movement or non-discrimination – would be worse.

Though the Germans share Cameron’s desire for a more competitive EU, they disagree with many other UK priorities. They oppose turning the “yellow card” procedure – through which national parliaments can ask the commission to withdraw a draft law – into a “red card”, because they do not want to make it harder for the EU to legislate. They are hostile to Cameron’s desire for mechanisms to protect the single market against the risk of the eurozone imposing decisions on it, claiming that his real aim is a veto for the City over financial rules. As for Cameron’s priority of preventing EU migrants from claiming in-work benefits such as tax credits, the Germans cite treaty articles banning discrimination on grounds of nationality. They point out that not only Poland and the other Central European states, but also countries like Spain would never agree to amend these articles.

Merkel’s advisers predict that she will “lead from behind”, allowing Donald Tusk, the president of the European council, to broker agreements among governments, while Jean-Claude Juncker, the commission president, prepares relevant legislation. In dealing with Ukraine and Greece, Merkel has kept France’s François Hollande at her side – to minimise the impression of German dominance and ensure that he is supportive. She will similarly enlist Hollande on the British question.

The final deal that Cameron obtains will mix EU-wide reform with UK-specific provisions. The mechanisms for delivering change will be varied: declarations and decisions of the European council, legislation and promises to amend the EU treaties at some unspecified point in the future. There is no time to change the treaties before a referendum. In any case most leaders view re-opening the treaties as a mad idea – nobody knows where the process would end and several countries would have to hold referendums.

As for substance, Cameron will probably win an accord on “competitiveness” that covers extending the single market, negotiating more trade agreements with other parts of the world and curbing unnecessary EU red tape. He may get something on restricting immigrants’ rights to unemployment benefits, but nothing on tax credits unless the UK changes its own rules (for example, by introducing a residence qualification that applies to everyone). He might win a treaty article promising to protect the single market, and an “emergency brake” enabling any government to delay a decision that it thought damaged the market. On the treaties’ commitment to “ever-closer union”, the British are unlikely to gain a full opt out, but words will be found to reassure them. The yellow card procedure could be beefed up so that national parliaments can more easily object to draft EU laws.

None of this will change the fundamentals of how the EU works. If Cameron tries to claim the contrary, he will sound unconvincing. Besides, the essence of the campaign will be about whether Britain is better off in or out. Cameron likes the mantra that we should stay “in a reformed EU”, as it helps him to keep much of his party together. But if he wants to win the referendum, he will have to upset some Tories and admit that the EU per se is good for Britain.

Charles Grant is director of the Centre for European Reform.