27 November 2012

John Palmer: UK's slide to EU exit door will be difficult to reverse

Reluctantly, even Britain's EU partners are coming to realise they may not be able to prevent a slippery slide by the UK out of the Union, comments Palmer in his article for the Irish Times.

The ultimate battle will be over whether the UK can achieve a renegotiation of the terms of union membership or whether it will have to go for outright withdrawal. The stridency of the eurosceptics is fuelled, in part, by fear of the UK Independence Party which is winning over significant numbers of Tory voters, and in part by recent opinion poll majorities in favour of UK withdrawal.

The next test of the British government’s intentions will come at the European Council on December 13/14. Heads of government will consider proposed EU Treaty changes designed to implement banking, fiscal and, eventually, greater political union for the euro area. Bizarrely, the British government has declared itself strongly in favour of much closer euro area economic and fiscal union as necessary to avert a further worsening of Britain’s economic crisis. But such integration, Cameron will insist, cannot apply to Britain.

London is ready not to veto euro area banking and economic union on two conditions. There must be guarantees that UK (read the City of London) must not be adversely affected by decisions of the new euro area governance. Secondly the EU must agree to negotiate a wholesale recasting of the terms of Britain’s membership. The UK would then pull out of a range of EU policies including justice, crime, immigration and social rights policies. It also wants to be free to pick and choose (and change its mind) on what in future it wishes to be involved in and what not.

David Cameron would then recommend such a radical recasting of the foundations of Britain’s EU membership for approval in a referendum to be held after the 2015 election. In this way London hopes to maintain the appearance of a formal – but very peripheral – membership of the Union. None of Britain’s partners want to see the UK depart but no one believes that a phantom version of membership designed only for the UK would be workable. Without such an agreement however, Cameron may agree to an In/Out referendum even before the 2015 general election, fearing that otherwise his party critics might force him out of 10 Downing Street.

Most Tory eurosceptics are unconcerned about an eventual total withdrawal. Outside, they believe Britain could negotiate a satisfactory new external relationship with the EU. They have in mind arrangements made between the EU and both Norway and Switzerland. But when they examine the fine print of these arrangements they may seem less appealing. Norway has to make hefty financial payments to the EU budget and is obliged to accept all the EU’s decisions affecting the running of the European single market. Switzerland is also bound by EU regulations on all its separate agreements with the Union – and like Norway without having any say in shaping them.

Cameron has so far had had little reason to worry unduly about pro-European opinion in Britain, marginalised as it is by an overwhelmingly eurosceptic media. The pro-European Liberal Democrats are politically neutered within the coalition. The Labour Party wavers between defending Britain’s EU membership and playing political games in alliance with the Tory eurosceptics to embarrass Cameron. Only if the pro-European forces across British society can mobilise an unprecedented fight back can the slide to withdrawal be reversed.

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