04 August 2015

Open Europe: How does the UK vision for EU reform fit with the Eurozone’s challenges?

What does the UK actually mean when it talks about EU renegotiation and reform? [...] At Open Europe, we have laid out a blueprint for EU reform, fleshing out what we believe the UK should, and hopefully will, look for in its negotiations with the EU. It is centred on three pillars, all of which have relevance for the Eurozone.

The first pillar is based on more flexibility within the EU. As the June 2014 European Council conclusions admit, the EU is no longer united on a course to ever-closer union (if it ever was). Therefore, a new structure is needed which accepts and codifies the fact that we now have a multi-form EU with certain groups heading in different directions. Of course, there still needs to be something unifying all EU states. The obvious choice is the single market. Making this the basis of the EU and its primary raison d’être would not only make the UK far more at ease in the EU but also allow the Eurozone to pursue additional integration if it so wishes.

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The second pillar focuses on economic competitiveness – less and better regulation, more and quicker free trade agreements (FTAs) and deepening the single market in a number of areas (services, digital, energy and capital being the primary ones). The link to the eurozone is again obvious. It is suffering from a lack of demand and inflexibility is hampering its ability to respond to negative economic conditions. Removing barriers within the single market and the burden on businesses will help provide a de facto boost in demand, as will opening up new sources of demand with FTAs. Generally enhancing national competition to spread best practice would likely prove more useful for the Eurozone than trying to enforce a one-size-fits-all economic model.

The final pillar is democratic accountability. Again, this is something the eurozone sorely needs to address. Rather than bringing countries together, the Euro has sown democratic divisions and tensions off the back of policy choices being dictated by unelected bureaucrats. Democracy remains anchored at the national level.

Greater involvement for national parliaments and better delineation of what needs to be done at European level and what can be done at national level will help refresh the democratic mandate of the EU. Any significant future changes in the eurozone must also be democratically anchored or have a democratic element – as the UK is now doing with its EU reform and referendum agenda.

Not only does all this highlight that the UK’s reform push is far from separate to the eurozone’s challenges but also that the UK’s position inside the EU will not be assured until the eurozone has figured out its own future. Until the eurozone knows where it is going and how it wants to look, the UK will always feel on edge inside the EU.

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Full article on Open Europe

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