Cameron’s
Brexit Demands Create Fresh EU Dilemma
No
one in Europe wants the U.K. to leave, but allowing the British
leader to claim his win is scarcely less destabilizing, Simon Nixon
writes
By SIMON NIXON
Updated Jan. 31,
2016 10:35 p.m. ET
At some point this
week, European Council President Donald Tusk is expected to send a
letter to European Union leaders containing the outline of a possible
deal with the U.K. over its demand for changes to its terms of EU
membership. Although the reforms outlined are likely to be fairly
small-scale and technocratic, the political significance of this
moment is immense: What is decided in the coming weeks and days will
have profound implications for the future of the EU.
In crunch talks in
London on Sunday, Mr. Tusk and Prime Minister David Cameron said they
failed to reach a draft agreement but would continue talks over the
next 24 hours.
From the British
perspective, the primary objective of Mr. Tusk’s letter—and any
deal that follows from it—is clear: It needs to provide a ladder
for Mr. Cameron and many of his colleagues to climb down after years
of deriding Britain’s membership in the EU. Mr. Cameron has made it
very clear that he will campaign to keep the U.K. in the EU ahead of
a referendum that he must hold on the matter by the end of 2017, and
the debate in his party and the country appears to be swinging
decisively in his favor. Two opinion polls published last week gave
the “remain” campaign an 18- and 19-point lead. A maximum of 50
out of 330 Conservative parliamentarians are now considered likely to
support a “Brexit,” compared with recent expectations of up to
150.
Meanwhile “leave”
campaigners are now in open warfare, unable to agree on who should
lead them or even what the alternative to EU membership should be.
Many of their arguments have fallen apart under scrutiny, not least
the claim that the U.K. could preserve all the advantages of access
to the EU’s single market while avoiding any of its obligations,
including the need to contribute to the EU budget or accept its
principle of the free movement of people. To add to their
difficulties, a string of forecasters have warned of the economic
risks of exiting the EU—warnings apparently underlined by an
alarming slide in sterling that is attributed partly to Brexit risks.
Yet despite the
stars apparently aligning for Mr. Cameron, he believes he still needs
to be seen to have scored a political win in his negotiations before
he can launch his campaign. He staked his political credibility on a
rash promise that he could restrict the payment of certain welfare
benefits to EU migrants until they had been working in the U.K. for
four years. This was a clear breach of the bloc’s principle of
nondiscrimination against EU citizens since it amounts to imposing a
higher rate of taxation on workers dependent on their nationality.
But unless Mr. Cameron can secure something close to what he has
proposed, he fears the domestic backlash could tip the referendum
toward Brexit.
Therein lies the
problem for the rest of the EU. No one in Europe wants the U.K. to
leave. Every government agrees a Brexit would have disastrous
consequences for the stability and security of the rest of the EU: It
would fuel nationalist and populist parties across the continent and
raise doubts about the continued membership of other non-eurozone
states. It would also rob the EU of one of its most powerful
proponents of free markets and an important counterbalance to the
power of Germany and France.
On the other hand,
allowing Mr. Cameron to claim his major political victory is scarcely
less destabilizing: other countries might be tempted to try to carve
out their own exemptions to common rules by similarly threatening to
bring chaos to the rest of the continent.
There is no
guarantee this impasse can be broken, or at least in time for Mr.
Cameron to hold the referendum on his preferred date in June. The
broad outlines of a possible deal have been cobbled together in
discussions involving Brussels, Paris and Rome. One option is to
allow Mr. Cameron to restrict welfare for EU migrants, but only on an
emergency basis and as a stopgap measure, leaving ambiguous whether
the permanent solution will be found in reforms to EU rules or the
benefits system. Mr. Cameron’s office said late Sunday that he and
Mr. Tusk had made some progress on the issue. But the fine details
will have to be agreed by all 28 EU leaders, and no one knows for
sure how the smaller countries who have yet to see the whole
package—which is also likely to include controversial proposals to
exempt the U.K. from the EU’s commitment to ever-closer union and
safeguard the U.K.’s interests as the eurozone pursues inevitable
deeper integration—will react.
That is why some
European governments are insisting that any deal with the British
needs to be accompanied by a wider overhaul of how the EU works to
head off the risk that other countries demand unilateral concessions.
The EU is an association of sovereign states whose survival depends
on respect for common rules. But recent crises have laid bare the
extent to which the bloc’s integration has left national
governments exposed to risks over which they have no control, such as
those arising from other member states’ mishandling of the refugee
crisis or mismanagement of their economies.
The British debate
highlights the challenge in finding long-term answers to these
structural problems. Some governments are convinced that the only way
to address spillover risks is through deeper integration and greater
pooling of sovereignty. But they may struggle to convince others who,
like Mr. Cameron, prefer to trust in national solutions.
Corrections &
Amplifications:
A maximum of 50 out
of 330 Conservative parliamentarians are now considered likely to
support a “Brexit.” An earlier version of this article
incorrectly stated the total number of Conservative lawmakers. Jan.
31
Write to Simon Nixon
at simon.nixon@wsj.com
Tusk
ready to deliver UK deal, but migration questions remain
European
Council president says he will send draft agreement to EU leaders on
Tuesday.
By TARA PALMERI
2/1/16, 7:21 PM CET Updated 2/1/16, 10:56 PM CET
A draft deal on the
U.K.’s demands for renegotiated membership of the EU will be ready
by midday Tuesday, but elements of controversial migration reforms
must still be agreed upon, according to an EU diplomat involved in
the talks.
European Council
President Donald Tusk tweeted Monday evening that he would soon
publish his proposal “for a new settlement” for the U.K. in the
EU.
Talks on the
outstanding issues continued late into Monday evening. Differences
remained on Britain’s insistence on an “emergency brake”
temporary ban on in-work benefits for EU migrants for four years, as
well as on a guarantee that non-eurozone countries can have some
input in eurozone economic policies.
According to two EU
officials, Tusk has been leaning towards leaving blank the number of
years for which an emergency brake would apply.
“Tusk would prefer
to keep the number for the negotiations,” a diplomat said. “He
checked with some Eastern European states on the welfare issue, some
of the member states said ‘don’t put in a figure until it’s
confirmed’.”
British Prime
Minister David Cameron’s request that the rights of non-eurozone
members be protected by a safety mechanism is nearly concluded, the
EU sources said. The text will contain details of a basic safety
mechanism that would allow non-eurozone countries to request a
eurozone issue be referred to the European Council, but they would
not have the final decision.
In this way, Tusk is
complying with a French demand that the new mechanism doesn’t give
the U.K. a veto on eurozone decisions.
“Tusk phoned
[François] Hollande who made clear what he needed, and Tusk made
clear he would take that on board,” the EU diplomat said.
Tusk left a Sunday
evening meeting with Cameron saying there was “no deal” and
setting a 24-hour deadline for an agreement to be reached. Tusk set a
deadline of Tuesday for sending the draft agreement to the EU’s 27
other leaders to give them enough time to consider the reforms in
detail ahead of a February 18 summit.
Downing Street is
likely to give a detailed response to Tusk’s statement on Tuesday,
according to the Guardian, which will explain any legislative changes
that are needed.
Cameron has been
pushing for a deal before March so that he can hold the referendum in
June 2016. If EU negotiators are not able to settle on a first draft
of the agreement within the next few days, the whole process could be
delayed.
Besides the
controversial demand for a ban on welfare benefits for EU migrants,
the U.K. is also encountering resistance from France on a proposal
that would give Britain and other non-eurozone countries the ability
to call a summit on eurozone economic policies they find troubling.
“To people in
France, the euro is important and we need to create growth and
stability,” a French official said. “If they know an EU country
has a way to block our destiny, that’s not right.”
European Commission
spokesman Margaritis Schinas said that even with the EU institutions’
agreement on Cameron’s draft, it does not guarantee the support of
the other 27 member states.
“Progress has been
made at the political and technical level notably following President
[Jean-Claude] Juncker’s meeting with Prime Minister Cameron here at
the Berlaymont on Friday and President Tusk’s meeting with the
prime minister yesterday,” he said at a press conference in
Brussels Monday. “However we are not there yet.“
“It is not enough
for the Commission and the Council lawyers to agree,” he said.
“This is a process that works at 28 and the Commission works for
all 28 member states of the Union.”
Authors:
Tara Palmeri
BRUSSELS SKETCH
Cameron
is just tip of the EU’s problems
There
are others among the EU’s big four that are trying to change the
status quo.
By TIM KING 2/1/16,
3:25 PM CET
The sight of David
Cameron speed-dating European Union presidents has a transfixing
quality. Here is a man threatening divorce, yet at the same time
seeking to rewrite the terms of the pre-nup.
Over the course of
Friday, he had to smile before the cameras with Jean-Claude Juncker,
whom he had previously tried to block from becoming president of the
European Commission, and then with Martin Schulz, president of a
European Parliament that he has previously scorned. Ironies pile upon
further ironies. A visit to London Sunday by Donald Tusk, the
president of the European Council, must have come as a blessed
relief.
As spellbinding as
Cameron’s contortions are, they do not tell us much about the state
of the European Union. They simply confirm what has been known for
many years: that the U.K. is part of the EU, but not “at the heart
of Europe.”
The phrase “at the
heart of Europe” was cheapened over the years by various British
politicians. John Major, having taken over from Margaret Thatcher as
prime minister at the end of 1990, pledged to put the U.K. at the
heart of Europe. His successor Tony Blair claimed to have done so.
And those of an unforgiving spirit might recall that in 2010, William
Hague, who was then Cameron’s foreign minister, said he would put
Britain at the heart of Europe (that was in the context of a plan to
send more British civil servants to work in Brussels, which did not
materialize, possibly because the civil servants had no wish to
commit professional suicide).
Setting aside such
vainglorious aspirations, which may or may not have been sincere,
everyone is agreed that the British are not at the heart of Europe
(and arguably never have been, at least not since 1945). The more
intriguing and troubling question at this particular juncture is to
ask: If not the British, who is at the heart of Europe?
The answer used to
be obvious: France and Germany leading the way, with the other four
founding nations of the EU — Italy, the Netherlands, Belgium and
Luxembourg — keeping in step. Some might have added Ireland, which
joined the EU in 1973, and perhaps even Spain and Portugal. (In
various ways, Denmark, Sweden, Finland and Austria kept their
distance and few thought of Greece as at the heart of Europe.) That
was the kind of thinking underlying a comment from Jacques Chirac,
the then president of France, who said in February 2003 of the
countries that were about to join the EU but which had dared to
criticize the imminent invasion of Iraq: “It is not well-brought-up
behavior. They missed a good opportunity to shut up.”
* * *
Those certainties
have long since disappeared. Plotting the loyalty of individual
member countries to the EU cause is no easy task, even for the
founding six. Perhaps unquestioning loyalty is still to be found in
Luxembourg and Belgium. Dutch government politicians are, for the
most part, still instinctively pro-EU, but now prone to voicing
stinging criticism of the EU — accusing Brussels of undue
interference.
Matteo Renzi has
been prime minister for only two years (admittedly a long time by
Italian standards), but already he has picked a series of
confrontations with the EU. It was not the style of his predecessors
to throw their weight around in Brussels. In the case of Silvio
Berlusconi because he was both indolent and devious, while Romano
Prodi and Mario Monti were both more courteous and pro-EU. Renzi is
naturally more combative. Additionally, he puts his national politics
first and judges that confrontation abroad may help him domestically.
In recent weeks, as
well as replacing Italy’s permanent representative to the EU
(perceived as being too soft), Renzi has held up an agreement on
providing funding for Turkey to help her cope with an influx of
migrants from Syria — in turn this is supposed to reduce the
pressure of migration on the EU. Italy’s objections were nothing to
do with the migration proposal — indeed Renzi has been arguing for
the EU to come to Italy’s aid. Instead, Renzi was using the Turkey
proposal to leverage concessions from Germany and the European
Commission.
Last week, Renzi
declared that he had secured the agreement of German Chancellor
Angela Merkel for greater “flexibility” in assessing Italy’s
compliance with EU fiscal rules. Whether there have been concessions
is disputed and as yet untested, but optimists see this as a happy
resolution. Pessimists warn that Renzi has learned the value of
holding the EU hostage.
* * *
Less obviously, but
perhaps just as destabilizing, Germany has been rocking the boat too.
Wolfgang Schäuble, the finance minister, is calling into question
the EU’s budget in ways that shake the assumptions on which other
member countries decided to join the EU. Schäuble’s line, spelled
out at a European Commission conference in September, and repeated at
a German government event in Brussels in January, is that the
migration crisis intensifies the need for a complete revamp of the
EU’s budget.
Schäuble is
viscerally pro-EU, but he regards the migration crisis as a complete
game-changer, for both Germany and the EU. He does not believe that
business-as-usual is either possible or desirable. This is a man who,
having been at Helmut Kohl’s right hand in the late 1980s as the
Soviet empire collapsed, went on to sign the treaty on German
unification in 1990. For him, just as West Germany had to adapt its
economy to the shock of unification in the 1990s, so Germany and the
EU must change to meet the migration challenge.
Britain's Prime
Minister Tony Blair (L) and leader of the Conservative Party David
Cameron arrive to attend the Remembrance Sunday Service at The
Cenotaph
Germany
and Italy are, for very different reasons, rocking the boat.
He is arguing that
EU money should be spent only on what the EU states have to do
together. It should not be replicating or replacing what a state can
do alone. So border controls and migration policing are in, along
with environmental and energy policies, and foreign affairs. However,
most agriculture and cohesion spending wouldn’t meet the cut.
Additionally, just
to make the medicine even more unpalatable, Schäuble has declared
that he wants to make receipt of EU money conditional on member
countries implementing agreed economic reforms.
“To be quite
frank,” he said in that September speech, “I propose to use the
money that is spent for cohesion policy and parts of the agriculture
budget to support reform efforts in the member states. The national
projects which benefit from financing from the European funds should
be systematically designed to implement the country-specific
recommendations. The Commission needs to make this the precondition
for financing national projects.”
He argues that in
the EU’s next multi-year spending cycle (2021 onwards), there
should be more flexibility about where to assign spending — and by
implication a significant reduction in spending on traditional areas.
Just as remarkable
in the January speech is Schäuble’s warning that it may be
necessary to depart from EU unity and unanimity: “We should not
stop looking for innovative solutions. This could mean that we need
to assemble a coalition of the willing. A coalition which is able to
tackle the most urgent problems.”
Granted, Schäuble
has a long history of outspoken rhetoric, and there will be some
people who regard these speeches as posturing, and who will comfort
themselves that he is unlikely to be on the political scene in 2021.
But equally there will be others, particularly those who sit round
the table with him at meetings of eurozone or EU finance ministers,
who will be keenly aware of a significant shift in German government
thinking.
* * *
What matters is that
the biggest countries cannot be described as having a cohesive and
coherent position on the EU. Germany and Italy are, for very
different reasons, rocking the boat. France under François Hollande
is preoccupied with its domestic politics and the struggle to improve
economic performance. Spain is paralysed by an inconclusive
parliamentary election. Poland has just elected a conservative
government that is in dispute with the European Commission over its
respect for democracy and the rule of law.
If those European
presidents whom Cameron has been speed-dating dared ask themselves
which countries now give unquestioning loyalty to the EU, how much
further would the list go than Belgium, Luxembourg, the Baltic
states, and Ireland?
Which surely adds
another fascinating layer of complexity to the Brexit mix. There are
various member states that are plainly dissatisfied with the EU in
its current condition, yet this does not make Cameron’s task of
changing the EU-U.K. relationship any easier. On the contrary, it
means that those negotiating with Cameron — the likes of Tusk,
Juncker and Angela Merkel — are less certain about what they can
deliver. It means that Cameron’s counterparts round the European
Council table are less sure of their allies and therefore less
willing to make concessions now for the sake of rewards in the
future: fear erodes generosity.
The temptation, in
the coming weeks, will be to fix attention on Cameron and his
domestic rivals, to look for unreasonable behavior that might be
evidence of irretrievable breakdown in relations between the U.K. and
its EU partners.
But, as the
negotiations intensify, keep an eye also on relations between the
rest of the EU’s biggest states. And, when Cameron demands
exemption from any aspiration to “ever closer union,” be alive to
the irony.
Authors:
Tim King
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