ANALYSIS:Eurosceptics have a growing domestic concern: Ukip is increasingly attractive to Conservative voters
A remarkable political consensus is emerging within Britain and across much of the European Union that the United Kingdom is heading inexorably towards withdrawal from the European Union.
Opinions differ about the speed of a potential British exit and also about precisely what new relationship London expects to negotiate with the union in the longer term. But, reluctantly, even Britain’s EU partners are coming to realise they may not be able to prevent a slippery slide by the UK out of the union.
The abortive EU budget summit last week showed that divisions over the size and policy priorities of the seven-year budget ran deeper and wider than the British government’s obdurate demand for a total freeze. But German chancellor Angela Merkel and her colleagues succeeded in averting – for now at least – British prime minister David Cameron ending up in an isolated, veto-wielding, minority of one.
Cameron returned to London to enjoy the rare experience of hearing his praises being sung by his hardline Eurosceptic Tory critics in the House of Commons. But they, and he, know that the budget acrimony in Brussels was only a minor skirmish in a much bigger struggle likely to develop over the coming months.
The ultimate battle will be over whether the UK can achieve a renegotiation of the terms of union membership or whether it will have to go for outright withdrawal. The stridency of the Eurosceptics is fuelled, in part, by fear of the UK Independence Party, which is winning over significant numbers of Tory voters and in part by recent opinion poll majorities in favour of UK withdrawal.
When the EU budget talks resume, Britain’s partners may be less tolerant of Cameron’s veto threats. They may even opt for an emergency one-year budget – which will fall short of the freeze Cameron seeks – and return to negotiate the seven-year budget proper only when it is clearer whether the British really are on their way out of the union.
The next test of the British government’s intentions will come at the European Council on December 13th-14th. Heads of government will consider proposed EU treaty changes designed to implement banking, fiscal and, eventually, greater political union for the euro area.
Bizarrely, the British government has declared itself strongly in favour of much closer euro area economic and fiscal union as necessary to avert a further worsening of Britain’s economic crisis. But such integration, Cameron will insist, cannot apply to Britain.
London is prepared not to veto euro area banking and economic union on two conditions. There must be guarantees that the UK (read the City of London) must not be adversely affected by decisions of the new euro area governance. And the EU must agree to negotiate a wholesale recasting of the terms of Britain’s membership. The UK would then pull out of a range of EU policies including justice, crime, immigration and social rights policies. It also wants to be free to pick and choose (and change its mind) on what it wishes to be involved in and what not.
Cameron would then move to recommend such a radical recasting of Britain’s membership for approval in a referendum to be held after the 2015 election. In this way London hopes to maintain the appearance of a formal – but peripheral – membership of the union.
None of Britain’s partners wants to see the UK depart but no one believes that a phantom version of membership designed only for the UK would be workable. Without such an agreement, however, Cameron may agree to an In/Out referendum even before the 2015 general election fearing that otherwise his party critics might force him out of 10 Downing Street.
Most Tory Eurosceptics are unconcerned about an eventual total withdrawal. Outside, they believe Britain could negotiate a satisfactory external relationship with the EU. They have in mind arrangements made between the union and Norway and Switzerland. But when they examine the detail of these arrangements they may seem less appealing.
Norway has to make hefty financial payments to the EU budget and is obliged to accept all the union’s decisions affecting the running of the European single market. Switzerland is also bound by EU regulations on all its separate agreements with the union – and like Norway without having any say in shaping them.
There is much brave talk in London about the UK being free to pursue its “global trading mission”. But since Britain exports more to Ireland than it does to China, big business in the UK is increasingly alarmed by the direction of government policy on Europe. Meanwhile, across the Atlantic the Obama administration views with concern a widening rift between Britain and the EU. Outside the union, the UK-US “special relationship” could suffer.
How Cameron’s high stakes poker game with the union plays out at home remains to be seen. Anxious voices are being heard in Scotland and Wales and across the community divide in Northern Ireland about the impact an EU budget freeze – let alone withdrawal – would have on the flow of funds from Brussels.
No one knows how UK disengagement might influence the referendum on Scottish independence. Could an independent Scotland opt to stay in the EU? Cameron has so far had little reason to worry unduly about pro-European opinion in Britain, marginalised as it is by an overwhelmingly Eurosceptic media.
The pro-European Liberal Democrats are neutered within the coalition. The Labour Party wavers between defending Britain’s EU membership and playing political games in alliance with the Tory Eurosceptics to embarrass Cameron.
Only if the pro-European forces across British society can mobilise a fightback can the slide to withdrawal be reversed.
John Palmer was the European Editor of the Guardian and then founder and political director of the European Policy Centre. He is a visiting practitioner fellow at Sussex University European Institute and a member of the Council of the Federal Trust in London.