The Growing EU-UK Gulf

January 28, 2013 Topic: European Union Region: United Kingdom

The Growing EU-UK Gulf

David Cameron isn't just securing his right flank.


On the day that France and Germany were amiably celebrating the fifty-year anniversary of the Élysée Treaty, it's fitting that British prime minister David Cameron delivered his long-awaited and much-leaked speech establishing a framework for the United Kingdom's future relations within the European Union.

Forty years after the United Kingdom joined what is now the EU, Cameron has made clear to Europe, on a rather less amiable note, his determination to renegotiate London’s terms of membership. The prime minister plans to hold a referendum on continued membership halfway through the next parliament—conveniently well after 2014 European elections, a 2014 referendum on independence in relatively pro-Europe Scotland and the next general election in 2015.


London's move came with a palpable sense of inevitability—not only since the Conservative Party took power in 2010, but stretching back over a decade to when then-chancellor Gordon Brown rejected the British adoption of the euro under Labour prime minister Tony Blair.

But the momentum has surged even in the past three years, as the Conservative Party has grown increasingly Eurosceptic, engulfed by fear that Central and Eastern Europeans are putting British jobs at risk. Moreover, the rise of the UK Independence Party is forcing the Tories to adopt a more hardline position on issues linked to immigration. Though Britain, unlike most other EU members (and even some non-members like Switzerland), maintains control of its borders, the free movement directive of the EU single market has legally barred London from denying EU citizens the right to work within the UK.

This is something Cameron presumably wants to change, though it remains unclear what else he'd like to renegotiate or even what he believes is sufficient to warrant a yes vote in his planned 2017 referendum.

German chancellor Angela Merkel, who wants a new EU treaty granting greater fiscal control to Brussels (and to Berlin, in no small part), may be willing to trade more opt-outs to Cameron in exchange for his acceptance of further integration of the core Eurozone countries. Cameron may also be hoping that he can use negotiations on the still uncertain EU budget for 2014 to 2020 as a bargaining chip.

Negotiations wouldn't begin in earnest until after Cameron's reelection in 2015 (still a questionable proposition) and after German federal elections expected in September 2013, so it's impossible to know whether the 2014 budget or a new Merkel-led treaty effort would even come into play. After all, it's not clear if the Eurozone will exist in its current form through the next five months, let alone five years. But if Merkel and French president François Hollande balk at Cameron's push, will it be enough to satisfy British Euroskeptics if he manages to, say, renegotiate an opt-out from the EU's directive on working hours? Or perhaps he might succeed in repatriating additional judicial powers from Brussels?

Furthermore, as Europe has discovered painfully in the past three years, there are precious few ways to ratchet back the forward march of integration. Greenland, part of the Danish realm, left the EU in the 1980s over fishing rights, but there's no precedent for how the fourth most-populous European nation would divorce itself from the EU. International investors would become even more skittish, not only about Britain, but the EU generally. Precedents are something Brussels prefers to avoid at all costs.

But stormy as the next five years will be, the entirety of the past 40 years of UK-EU relations is a turbulent narrative, highlighting that Cameron’s speech is only the latest chapter in a story that is unlikely to end happily ever after.

In fact, if Cameron's latest gambit has a sense of déjà vu to it, it's because it comes almost directly out of the political playbook of former Labour prime minister Harold Wilson. Just one year after pro-European Conservative prime minister Edward Heath secured British membership in the EU's predecessor, the European Economic Community, Wilson sought to renegotiate the original deal and in 1975 held a referendum on whether Britain would remain in the Community.

But British-EU relations have always been troubled, and even the British accession to the EEC is poised with original sin. Denied membership to the EEC twice during the 1960s by French president Charles de Gaulle, Britain finally gained entry in 1973 after months of protracted negotiations between Heath and de Gaulle's successor, Georges Pompidou.

Britain’s relationship with the EEC deteriorated further when Margaret Thatcher entered 10 Downing Street in 1979, determined to confront what she viewed as the excesses associated with Community spending, especially in regard to the Common Agricultural Policy. After years of bickering with other European leaders, including West German chancellor Helmut Kohl and French president François Mitterrand, Britain secured a permanent budgetary rebate at the 1984 European Council summit. Nonetheless, Thatcher continued to clash with Commission President Jacques Delors throughout the 1980s over his attempts to further the integration process at the expense of national sovereignty. Her famous “No, No, No” speech contributed significantly to her downfall in 1990.

Her successor, John Major, had an equally troubled relationship with the EU after the Maastricht Treaty entered into force in 1993. With memories still recent of the painful 1992 sterling crisis that led to the UK’s withdrawal from the European Exchange Rate Mechanism, Major opted out of economic and monetary union. When New Labour swept to power later that decade, it was no surprise that then-chancellor Gordon Brown ratified Major's decision, setting down five “tests” that would have to be met in order for Britain to abolish its beloved pound. After all, Brown's first major act in a decade as chancellor was to deliver monetary independence to the Bank of England, virtually guaranteeing that the UK would not soon transfer UK monetary policymaking to the European Central Bank.

The two-tier EU that was already emerging in the 1990s became an enshrined reality by the early 2000s, by which time Britain had opted out of not only the Eurozone and scoffed at a Europe-wide foreign policy, but had also rejected the Schengen Agreement on the removal of border controls within the EU.

In some ways, British truculence goes back well beyond the era of European Union—in 1931, the United Kingdom was the first major European power to ditch the gold standard, goosing its own economic recovery while leaving the economies of Germany and France clamped to 24-carat chains.

For decades referred to as the “reluctant European,” British ministers have sat uncomfortably around the EU table as an increasing number of decisions have been taken by qualified majority voting, leaving British diplomats with less leverage in Brussels than ever.

Meanwhile, back home, the Conservative Party is more Eurosceptic than ever, more than a decade after then-leader William Hague ran on a “Save the Pound” platform and with Nigel Farage's UKIP nipping at its right flank, much as the tea-party movement in the United States has pulled U.S. conservatives further right over the past four years.

Deeper political, fiscal and banking integration, even in an effort to save the Euro and forestall a financial crisis that could leave the UK in an even deeper recession, was always going to spook Cameron’s Tory backbenchers. After having avoided the straitjacket of a one-size-fits-all monetary policy, no British prime minister could reasonably accede sovereignty over fiscal policy as well.

But even as the Eurozone accepts that deeper union is necessary to make the single currency workable, it's unclear that in the reality of today's “multi-speed Europe,” Cameron would need to renegotiate anything in order to retain the fiscal prerogative at home—just 22 days ago, the “fiscal compact” took effect through much of the rest of the EU, despite Cameron's refusal to ratify it.

That's why Europe should view Cameron’s speech not only in the narrow context of right-wing domestic politics or fiscal sovereignty, but within the wider scope of Britain’s troubled relationship with European integration. Ideally, Britain wants a European-wide free-trade area without the supranational institutional apparatus, something it proposed during the 1950s. Yet unless the euro implodes, that's not the future of the EU.

The gulf between the British and their EU partners has never been wider. London has always viewed the EU as an investment opportunity to expand its markets and exports, while France, Germany and others regard the integration process as something far more important: a motor of peace and stability.

Dr. Michael J. Geary is a fellow (European Studies) at the Woodrow Wilson International Center for Scholars in Washington, D.C. Kevin A. Lees is an associate attorney at Latham & Watkins LLP in Washington, D.C. and editor of the foreign policy blog

Image: Flickr/Harvey Barrison. CC BY-SA 2.0.