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Tuesday, 19th October 2010

Time for a new approach to the EU

Mats Persson 1:25pm

All eyes are on the spending review, but yesterday another potentially huge challenge landed in the Coalition’s in-tray: the prospect of a new EU treaty.
 
In the small town of Deauville in Lower Normandy, French President Nicolas Sarkozy and German Chancellor Angela Merkel struck another of those ‘Franco-German compromises’ that tend to set the EU agenda, and have too often left the UK on the back foot. Yesterday’s compromise will see Sarkozy backing German calls for a new EU Treaty to introduce new a mechanism that would enable countries within the euro area, such as Greece, to default.
 
And Merkel means business. Under the current eurozone bail-out packages, German taxpayers are potentially liable for €120 billion in loans to foreign governments over which Germany has very little power. This is a huge amount, which tops the Coalition’s entire spending review.
 
Leaving the technical details aside, an ‘orderly default procedure’ for the eurozone would not only transfer some of the risk from German taxpayers to the investors and banks that lent money to struggling governments. It would also give Germany much greater control over how the eurozone is run. 
 
As painful as EU Treaty negotiations are – particularly for the EU elite who have to deal with those terrible referenda – you can see why Merkel would rather face grumpy EU leaders than explain to her taxpayers why she continuously has to write blank cheques to bail out foreign governments she has very little sway over.
 
So where does this leave the UK?
 
History suggests that Britain will react to the prospect of a new EU treaty in one of two ways.
 
Option 1: the UK says it will categorically veto any Treaty change which impacts on Britain. It takes itself out of the game (via an opt-out for example) and loses its leverage to shape the future of the EU.
 
Option 2: the UK says it will not accept a Treaty which transfers powers from Britain to Brussels, but then loses in negotiations and signs up to a treaty which does just that. It tells the British electorate that it was all only a tidying up exercise anyway and no referendum is needed.
 
Neither of these approaches has worked particularly well in the past. So, why not do things differently this time?
 
Rather than instinctively reaching for the veto, David Cameron should back Merkel’s demands, in return for the repatriation of powers to the UK, along the lines of the original Tory election manifesto. This package could then, possibly, be put to a public vote, and be turned into a genuine referendum on EU reform. The net effect of a new EU treaty would then be fewer powers for Brussels and more for Westminster.
 
And backing Merkel’s push for an orderly default procedure wouldn’t only be for show – a chaotic default by a eurozone member, following a bailout, would be the worst of all worlds, including for Britain.  An orderly default procedure would place more of the risk where it belongs.
 
It certainly isn’t uncomplicated, but the coalition would be committing a huge error if it didn’t take the opportunity to show some much-needed assertiveness in Europe.
 
Mats Persson is research director of Open Europe.

Filed under: Angela Merkel (86 more articles) , Bill of Rights (6 more articles) , Coalition (1903 more articles) , Conservatives (2099 more articles) , Europe (708 more articles) , Finance (47 more articles) , Foreign Policy (312 more articles) , Nicolas Sarkozy (98 more articles) , UK politics (4968 more articles)

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Nick

October 19th, 2010 1:39pm Report this comment

With the risk for the Eurocrats, and we know how much they hate democracy, that the UK electorate says NO irrespective of the deal. Referenda on all transfers of power and the UK effectively has a veto on all.

That is, unless Cameron is a liar.

cuffleyburgers

October 19th, 2010 1:47pm Report this comment

oink, oink, oink

INCOMING!!!!

michael

October 19th, 2010 1:53pm Report this comment

As the spare member at the party.... the Rayome Untermench's assertions are a prime example of impotence.

Ed P

October 19th, 2010 1:59pm Report this comment

This should also demand a reduction in the excessive amount the UK "gives" the EU. It's absurd to aquiesce to an increase, when most European countries are reducing their public expenditure.

London Calling

October 19th, 2010 2:03pm Report this comment

Time for a new approach and a swift withdrawal…however logic tells me that
EU tentacles are far and reaching regardless of the subtle rhetoric against from David Cameron…especially with a EU Tax currently on its way to the UK?…

Sir Graphus

October 19th, 2010 2:15pm Report this comment

Have we ever actually tried Option 1?

Charles Martel

October 19th, 2010 2:18pm Report this comment

The problem with this analysis is that there is an assumption that Cameron wants to repatriate powers back to Britain, when all the evidence suggests that Cameron is more pro-EU than either Blair or Brown.

The only way to get less EU is to not vote Tory, Labour or Libdem... simples.

Norman Dee

October 19th, 2010 2:21pm Report this comment

But is what is doing the right thing for the majority of the British people going to be the priority ?. I have completely lost faith in Cameron's so called Euro scepticism and fear another knee bend is coming up.

JohnPage

October 19th, 2010 2:32pm Report this comment

Could they write something which just applied to the eurozone?

Sue MV

October 19th, 2010 2:35pm Report this comment

I love your optimism and faith in the Tories :) but it's just not going to happen. They're happy to be part of the "great plan".

We are all destined to be part of the great socialist empire called the EU, whether we like it or not.

NeilMc

October 19th, 2010 2:37pm Report this comment

Great concept Mats. All Cameron and Hague have to do is adopt some spine and grow a pair and things could work out to be rather positive.

Somehow I sense that if you check out Political Smarkets the odds won't be very strongly in favour of Cameroonian courage!

Ian Walker

October 19th, 2010 2:43pm Report this comment

Option 3, we leave the political-unification-aimed EU and form or join a pan-European free trade alliance. That's all we've ever voted for anyway.

Greenslime

October 19th, 2010 2:46pm Report this comment

why don't we just tell them to foxtrot oscar and that we're off. We can work with them on the same basis as Switzerland and Norway.

Scary Biscuits

October 19th, 2010 2:49pm Report this comment

Given that we're in coalition with the Liberals, I very much doubt Cameron would have support for repatriation of powers. Anyway, I'm not sure even Cameron wants it; it was just a sop to his right wing. The reality is that we'll just go for Option 2 again. Meanwhile the pressure cooker calling for outright withdrawal from Europe will just keep on getting warmer.

denis cooper

October 19th, 2010 2:52pm Report this comment

There's a rather important word missing from the second sentence of the third paragraph, which starts:

" Under the current eurozone bail-out packages ..."

and that word is "illegal".

Or, if you prefer, re-word it thus:

"Under the current eurozone bail-out packages, agreed in clear contravention of the EU treaties ..."

And as the UK is a party to the relevant "no bail-out" articles in the treaties, even though we are not yet in the eurozone, and as those treaties have been incorporated into our constitutional law by Acts of Parliament, the UK government has not only acquiesced in actions by other countries which are in breach of the treaties, it has thereby also breached our national law.

Dennis Churchill

October 19th, 2010 2:59pm Report this comment

As neutralising the Conservative’s anti-federalism was the appeal of the coalition to both the Cameron and Clegg factions we will once again be betrayed.

David Ossitt

October 19th, 2010 3:13pm Report this comment

“Yesterday’s compromise will see Sarkozy backing German calls for a new EU
Treaty”

Oh bliss, oh joy of joys, bring it on we must have a new EU Treaty, has the French President Nicolas Sarkozy and the German Chancellor Angela Merkel forgotten that David Cameron who had promised a referendum but had managed to wriggle out of giving us one because the deal had already been done by the mad bad Gordon Brown.

Sweetened this very bitter pill by saying “any future changes to the treaty must and will be put to the British people in a referenda”, he will not dare to back track on this promise, it would for him be political suicide.

Freeborn John

October 19th, 2010 3:41pm Report this comment

In Brussels you get what you negotiate. So it would be a criminal abdication not to use the opportunity of a revised EU treaty believed to be necessary for the survival of the euro by the countries that use it, to negotiate something very much desired by the great majority of Britons who wish to see parliamentary democracy survive in this country; namely the return of powers from Brussels to Westminster. Cast-iron Cameron lost the last election when he climbed down over the Lisbon Treaty. He will fully deserve to lose the next election if he wastes this gold-plated negotiating opportunity to reduce Brussels power over us.

London Calling

October 19th, 2010 3:42pm Report this comment

Time for a new approach and a swift withdrawal…however logic tells me that
EU tentacles are far and reaching regardless of the subtle rhetoric against from David Cameron…especially with a EU Tax currently on its way to the UK?…

Vulture

October 19th, 2010 4:17pm Report this comment

The only way that Dave will be forced to hold any sort of referendum to repatriate powers or better, pull out of the whole expensive, corrupt and stinking morass altogether will be if Tory MPs force him to do so.

I wouldn't wait up.

Roger Davies

October 19th, 2010 4:34pm Report this comment

I have looked but not found a single reason for the UK to remain anything other than an Associate Member of the EU. NATO not the EU provides for our defence and the EU is losing global market share fast. In order to rebuild and rebalance the UK Economy it would be best if we first left the EU.

Dimoto

October 19th, 2010 5:27pm Report this comment

The new Franco-German stitch up, seems designed to ease Greece out of the lifeboat, and leave it to the sharks.

The sharks might then get the taste of blood, and go after Portugal, Spain and Ireland .... have a look at British banks exposure to Ireland (and weep).

Owen Morgan

October 19th, 2010 5:32pm Report this comment

I am afraid that I am with Cuffleyburgers on this one. Mats makes an excellent case, but when did that count for anything in Brussels?

Dennis Churchill

October 19th, 2010 6:31pm Report this comment

Dimoto
Look at how much German bond holders held in Anglo Irish bank and weep for Irish children who will be paying taxes to bail these German interests out until they are old and grey.

denis cooper

October 19th, 2010 6:58pm Report this comment

On the question of whether the so-called "referendum lock" would apply to this treaty, we would really have to wait and see what it contained.

It certainly couldn't escape the need for a referendum on the grounds of making only "technical" changes, but I can almost hear Hague picking his words carefully as he explains that this new treaty would not "pass areas of power or competences from Britain to the EU", and therefore would not need the consent of the British people in a referendum.

http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm100603/debtext/100603-0009.htm

Hansard June 2010, Column 608:

"Both parties that form the coalition are determined to make the Government more accountable to the British people for how the EU develops, so that Bill will be introduced later this year. It will enlarge democratic and parliamentary scrutiny, accountability and control over the decisions that we make in the EU. As the House will know, it will include a referendum lock, so that no future treaty may pass areas of power or competences from the UK to the EU without the British people's consent in a referendum. The Government have already agreed that there will be no further transfer of sovereignty or powers in this Parliament in any case. The lock will also cover any proposal for Britain to join the euro. We regard that measure as essential in ensuring that the EU develops in a way that has the British people's consent.

We are also clear that the referendum lock will apply only to any proposed future treaty transfers of power or competences from Britain to the EU. It will not apply to treaties that do not do that, such as treaties that make technical changes or accession treaties."

In my view that is the wrong criterion. It should be more like:

"Would, or could, this treaty in any way diminish the power of the British Parliament?"

irrespective of whether power was transferred to the EU institutions, or to the governments and Parliaments of other countries, or it just disappeared altogether.

Or perhaps more exactly:

"By approving this treaty, would the British Parliament be agreeing to further limit the application of its sovereignty?"

http://www.parliament.uk/about/how/sovereignty/

""Over the years, Parliament has passed laws that limit the application of parliamentary sovereignty. These laws reflect political developments both within and outside the UK.

They include ...

The UK's entry to the European Union in 1972 ...

These developments do not fundamentally undermine the principle of parliamentary sovereignty, since, in theory at least, Parliament could repeal any of the laws implementing these changes."

TGF UKIP

October 19th, 2010 8:55pm Report this comment

Mats Persson, you seriously suggesting that this LibDem governmentbe anything other than an EU patsy? Delusional.

willoughby de broke

October 20th, 2010 6:55pm Report this comment

I am afraid this is the same old Open Europe mantra; "reform the EU" Talk about the triumph of hope over experience...

Mats Persson reminds me of the guy who climbs up to the edge of the 5m diving board, flexes his muscles, looks over the edge - then remembers an urgent appointment back in the changing room. There is zero desire in the EU for the sort of reform Open Europe proposes; but only the ratchet of more power to Brussels.
. Better off out.

Alastair MacMillan

October 24th, 2010 12:08am Report this comment

Cameron is so wet he won't repatriate powers and if he tried Sarkozy and Merkel would say no. The Conservative / coalition policy on Europe is so ill thought through that it is positively half baked. It was interesting how Boy George Osborne omitted any cuts to UK EU contributions but added insult to injury by increasing overseas aid which we are already rather good at to less favoured areas of the EU; like France !

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