28 September 2015

CEPS: Cameron’s ‘renegotiations’ (or Russian roulette) with the EU - An interim assessment

Since his re-election in May 2015, Prime Minister Cameron has devoted much of his time trying to advance his ‘renegotiations’ with the EU, given his commitment to reaching conclusions as soon as possible, ahead of the referendum scheduled for no later than 2017. Cameron has been holding one-on-one talks with the leaders of all other EU member states, whose substantive content has been non-transparent. He has been invited to address the European Parliament, which would be an opportunity to be transparent with respect to his objectives, but his spokesperson has so far only said that he is considering the request.

The reason for this approach is evident enough. He must try to placate his Eurosceptic Tory MPs with the argument that he is in delicate negotiations to secure an important new settlement. But his margin for ‘renegotiation’ is objectively small, given four major structural facts on the ground:

- The UK’s existing opt-outs and special deals are already huge and unique (euro, Schengen, refugee and asylum opt-outs and the special rebate on the budget). The euro and refugee/asylum crises of the past year have only underlined how the UK escapes the heavy commitments shared by most other member states.

- The bulk of the rest of the EU’s hard-core activity is around the single market, which is the UK’s highest-priority domain, and where on the contrary he wants a fuller opening of the single market for services and further advances in sectoral policies such as for climate change and the digital sector.

- With respect to popular demands for the EU to cut red tape, the Juncker Commission has already given the UK what it has been asking for, in the shape of a first vice-president charged with weeding out unnecessary EU regulations.

- The EU’s potentially increasing role in foreign and security policy is subject to unanimity voting rules, so the UK can control any systemic development there as and when such issues are posed.

Cameron’s four areas for ‘reform’.

As a result Cameron’s demands are a mixed bag of items, which he presents under much broader labels. After his meeting in Madrid with the Spanish prime minister on 4 September, he told the press that he had “already set out the four areas where we want reform: on competitiveness, sovereignty, social security and economic governance”. It is notable and commendable that his key word here is “reform”, rather than “renegotiation”. This is an important distinction. Reform is something that the UK may do cooperatively together with all the other member states and the EU institutions; renegotiation is about obtaining special conditions for the UK, which as pointed out above, are already very substantial. What is, or might be behind these labels for reform?

On ‘competitiveness’, Cameron was clear at his Madrid press conference: “We [the UK and Spain] both want to exploit the full potential of the single market, while preserving its integrity for all 28 Member States. We both want to complete the single market in services and energy. We agree the EU must do more to back start-ups and entrepreneurs. We want to create a genuine online single market for businesses and consumers alike. And crucially we want the EU to conclude ambitious new trade deals with the United States, with Japan and with Mercosur – the South American trading bloc. [...]

On ‘sovereignty’, there seem to be two issues: the “ever-closer union of the peoples of Europe” (in the preamble to the Lisbon Treaty) and the role of national parliaments in EU legislation. [...]

On ‘social security’, this is actually about intra-EU migration and related issues of welfare benefits. In EU law there is the distinction between migrants who are in, or not in the labour force. In all cases the non-discrimination principle is a red line for the rest of the EU. For both categories, however, the Court of Justice of the European Union has recently handed down judgments that help accommodate British concerns, namely the Dano case in November 20144 and the recent Alimanovic case5 on 15 September 2015.

For non-active persons, the Dano ruling involving a case in Danzig clarifies the competence of member states for determining rights to permanent residence and thence of social benefits. In the Alimanovic case, also in Germany, the court judged that member states could in certain circumstances deny noncontributory social benefits to migrants who were searching for work but were without employment. These cases took Cameron by surprise, but allow him now to see that the CJEU has been helping him achieve his objectives. The other member states in this situation should encourage Cameron to maximise the UK's margin of manoeuvre opened by these judgments, which do not then require difficult 'renegotiation'.  [...]

On ‘economic governance’, Cameron declared in Madrid: “We both believe that further reform is needed within the eurozone, while upholding the rights of those EU Member States that are outside the euro.” The Chancellor of the Exchequer, George Osborne, has also been travelling in Europe to advance the case for safeguards for non-euro member states. There was already in 2013 legislation providing for a ‘double-majority’ decision-making rule for actions of the European Banking Authority (EBA) and European Securities and Market Authority (ESMA): meaning that decisions should be supported by a qualified majority of both euro and non-euro member states. [..]

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