30 April 2015

Financial Times: All British political parties are eurosceptic now

The aftermath of the British elections is one of the most pressing issues on the minds of EU policy makers. It ranks some distance behind a breakdown of the Minsk II ceasefire agreement in Ukraine, but some way ahead of a sudden Greek exit from the eurozone. Yet British voters do not return these attentions. Astonishingly, given the importance of this Thursday’s elections for Britain’s future in the EU, Europe has played hardly any role in the debate.

What I can predict with some degree of confidence is that the outcome of these elections will have a profound effect on Britain’s future membership of the EU. The trouble is that the effect is hard to calculate — no matter who wins. A British exit from the EU is possible under virtually any election outcome.

David Cameron has promised an in-out referendum in 2017 if the Conservative party wins. If, instead, the Tories form a coalition with the more pro-European Liberal Democrats, the odds of a referendum are less clear. It would depend on the outcome of coalition negotiations that have yet to take place.

The Labour party is viewed as, on the whole, more pro-EU than the Conservatives. That is true, but misleading. Labour has not chosen to raise the EU as a central election issue either. Of the 83 pages of the Labour party’s manifesto, the EU occupies little more than a single page — on page 76.

That section consists of a very odd compilation of statements and proposals. I get the sense that I am spending more time summarising them than they spent writing them.

The short passage asks for less austerity and more budget discipline at the same time. It wants a “red card mechanism” to allow national parliaments to veto EU legislation. The overarching goal is “to change the EU in the best interests of Britain” and “to protect our national interest”. There is no mention of the EU’s interest, something that the social democratic parties of continental Europe nowadays commit to as well. Naturally, Labour rules out joining the euro.

If you were reading this without knowing anything about the party and its history, you might conclude that there was a greater degree of overlap between Labour’s manifesto and that of the National Front in France, than with centre-left parties elsewhere in the EU. To a continental European, this reads like a profoundly eurosceptic programme.

If you ask people in Britain and the rest of the EU whether they support reform of the EU, the majority would say yes. But they mean opposite things by these assertions. What Labour has in common with the Conservatives, but not with social democrats and socialists in continental Europe, is support for returning certain EU powers to national parliaments.

So what happens if Labour wins? Ed Miliband, the Labour leader, said he would only call an EU referendum in the case of a further transfer of power from the member states to the EU. But that may well happen. The EU will need mechanisms for the eurozone to deal with sovereign default, the integration of banking and labour markets, and fiscal policy. Can Britain opt out of all of this?

Even if there were no in-out referendum under a Labour government, the exit threat would not disappear. Consider what would happen if Labour were to form a minority government, supported by the Scottish National party, which may well harbour ambitions of holding another referendum on Scottish independence. A vote in favour of independence would increase the odds of an EU referendum in England — and with it the odds of a No vote. Without the unwaveringly pro-European Scots, the balance of opinion in the rest of the UK would be more eurosceptic.

My own view is that Brexit happened a long time ago, during the negotiations on the Maastricht treaty in 1991, when Britain obtained an opt-out from the single currency. It was the euro that has been driving Britain away from the mainstream, but the isolation now extends beyond the single currency.

Just look at who was sitting at the Minsk ceasefire negotiations with Vladimir Putin, the Russian president, and who was not. The central powers of EU foreign policy are Germany and France. Britain is, of course, still a formal member of the EU, with interests in specific policy areas such as financial regulation. But Britain has chosen to sideline itself from most of what is going on in the EU.

There are, of course, material differences between the political parties in the UK in respect of their EU policies. But the real divide is not between Labour and the Conservatives. It is between Britain and Europe.

This is why, from a pro-EU perspective, it is hard to see any positive outcomes from this Thursday’s elections.

© Financial Times