Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

Cameron’s Curate’s Egg

Is Cameron’s speech “good in parts”?

Possibly, there is some good in it, but a lot is more than just unpalatable.  The style however is determinedly Euro-septic [sic].  And there lies the problem; is this a genuine attempt to launch a debate about the future structure of Europe, or is he merely “Farraging”?.  I wish it was the former, but I fear it is the latter.

So what can be taken from the speech?

The timing is bad (I doubt that many in Europe – the EU – are ready to listen), but the reason for the timing being bad (the Euro Crisis combined with the regard in which Cameron is held by many in Europe) is also the cause for a debate being needed at some stage.

Solving the Euro Crisis is probably going to need greater integration and that is also the direction in which many of the Euro Group countries wish to go.  We signed up to the Treaty of Rome which (1st clause) “determined to lay the foundations of an ever closer union”.

HIS MAJESTY THE KING OF THE BELGIANS,
THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY,
THE PRESIDENT OF THE FRENCH REPUBLIC,
THE PRESIDENT OF THE ITALIAN REPUBLIC,
HER ROYAL HIGHNESS THE GRAND DUCHESS OF LUXEMBOURG,
HER MAJESTY THE QUEEN OF THE NETHERLANDS,
DETERMINED to lay the foundations of an ever-closer union among the peoples of Europe,
RESOLVED to ensure the economic and social progress of their countries by common action to eliminate the barriers which divide Europe,
AFFIRMING as the essential objective of their efforts the constant improvement of the living and working conditions of their peoples,
RECOGNISING that the removal of existing obstacles calls for concerted action in order to guarantee steady expansion, balanced trade and fair competition,
ANXIOUS to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less favoured regions,
DESIRING to contribute, by means of a common commercial policy, to the progressive abolition of restrictions on international trade,
INTENDING to confirm the solidarity which binds Europe and the overseas countries and desiring to ensure the development of their prosperity, in accordance with the principles of the Charter of the United Nations,
RESOLVED by thus pooling their resources to preserve and strengthen peace and liberty, and calling upon the other peoples of Europe who share their ideal to join in their efforts,

The founding countries (and many of the later joiners) feel that they are “part” of this enterprise yet, as Cameron hinted, we see the EU more as an entity apart from us that “does things” to us.

If we accept that the Euro Group (with or without its weaker members) will draw closer together they will draw away from the non-Euro countries.  This issue has to be addressed. Cameron is “bang on” (© Boris Johnson) in this respect.  What are the options for the Euro-refusnik countries?

  1. Stall and hope that the move to Euro-federation fails.  This however is probably only going to happen after a failure of the Euro; do non-Euro countries want to be part of such a mess?
  2. Be compelled to join the Euro and the “ever-closer” union of the Euro-Group.  This will hold the EU together.  Some countries will “on balance” prefer to do this, whilst others (particularly a UKIP-Eurosceptic dominated UK) would rather leave.
  3. A two-speed Europe.  I suspect that this may be a temporary face-saving position for both the EU and the semi-detached countries which would have a relationship with Europe in some ways similar to the relationship that say Puerto-Rico has with the United States.  National pride may mean that some countries will not be able to accept such a relationship and will go for complete detachment.
  4. Leave and try to obtain:
    • A “Swiss style” relationship – unlikely to be granted by the EU,
    • A “Norwegian style” relationship – this seems to involve most of the obligations and expense, but none of the influence (but you control your fisheries),
    • Complete detachment moderated by a few bi-lateral agreements such as the EU has with some of the BRIC countries

Cameron says he wants to stay in Europe and the single market, yet seems to have a different view of what “the single market” means.  Some claim that the single market is one of Thatcher’s triumphs allowing the UK financial services industry to have access to the whole of the European Market.  (A triumph for capitalism?).  He also rejects the concept of an “ever-closer union” – at least as others view it.

This inevitably seems to lead towards a two-speed Europe.  Even if the Euro countries had the time and inclination to talk to Cameron, I cannot see them giving up any of the current functions of the EU – they are going in the opposite direction.  Slight trimming will not placate Cameron and as the French say an á la carte Europe will not work.  Therefore Cameron is going to take the UK clearly out of the mainstream of the EU.

If we are joined by others it is possible that the mainstream countries (the core EU) may think it is worth setting up an outer circle – but it will still be dominated by the core.

Is it possible to achieve consensus on which areas of interest relate to “the single market” and which may be argued to relate to “a Federal Union”?

  • The Working Time Directive.  Cameron wants to shed regulations such as this which he sees as constraining the market (and Britain in particular); others see the Working Time Directive as “levelling the playing field” – surely a key element of a single market?
  • Single Currency. It may be possible to have a single market with multiple currencies – provided volatility of exchange rates and costs of conversion do not distort that market.  However exchange rates seem to offer too many opportunities to the money markets to turn a profit – thereby distorting the market for goods and services. So it makes sense for a single market to have a single currency.  If a country does not wish to join such a common currency it has to put up with the distortions caused by volatility of exchange rates and costs of conversion – it cannot have the full benefits of a single market.
  • Environmental policy.  Others will argue that to allow some members of the single market to gain an advantage through polluting our planet breaches the concept of a level playing field.  I suspect that Cameron (despite his husky hugging) sees such policies as a constraint on the free operation of the market.
  • Foreign Policy. Where it does not affect trade Cameron would no doubt claim that Foreign Policy is not an essential part of the single market.  However the Europeans are surely natural partners – unless we want to be the poodle of the Americans.
  • Law and Order Issues are probably not key to the single market so could be abandoned.  But they have so many benefits that I suspect that a detached UK would wish to negotiate some form of Law and Order co-operation.
  • Defense I find an odd area given that Ireland and Sweden are neutral and we have an established organisation (NATO) outside the EU.

If an “outer circle slow speed” EU is to be a “single market only” entity I suspect that Cameron will be unable to find a definition that will be accepted by the Euro zone as qualifying as a sufficiently level playing field.  Which leaves the “Norwegian solution” – all the regulations, a hefty subscription, little influence and no rebate.

If Cameron is allowed to see this through I can see a referendum inevitably leading to us leaving the EU and possibly not even having a semi-detached relationship.  Less Europe’s Puerto-Rica more Europe’s Cuba?  Or does Cameron think that he has some Anglo-American fall back position?

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