What David Cameron’s victory means for the rest of Europe

A look at the four key questions about the coming British referendum on the EU.

A different version of this article was first published by Politico Europe on the 8/5/2015

The Conservative Party’s unexpected victory in the British general election evokes memories of 1992, when the Conservatives also defied expectations with a narrow victory. On that occasion, Prime Minister John Major found his term in office dominated by party divisions over Europe. Now David Cameron faces a similar prospect that the issue of Britain’s relationship with the EU will loom large in the first two years of his new term. How can we expect the politics of Europe to play out in Britain, and what is it likely to mean for the EU more widely?

One piece of potentially bad news for Cameron is that Major’s parliamentary majority was bigger than his (21 rather than 6), and his Eurosceptic core was smaller (50 hard core eurosceptics compared to 80-100 for Cameron). But against this, the big difference is that Major refused to grant his citizens a referendum on EU membership while Cameron has promised to make it a central plank of his first Queen’s Speech. As he puts in place his building blocks, there are four questions that are haunting people in other capitals:

In the event that pro-Europeans win a referendum based on a backdated cheque which is not ratified before the next election, they will be writing the campaign materials for UKIP.

1. When will the referendum happen? Cameron has promised to hold it before the end of 2017. There has, however, been some speculation that he may be tempted to do it earlier while he has more political capital (particularly as it will be impossible to negotiate and ratify any changes to treaties on either timetable). Realistically that means that the referendum would either be in the autumn of 2016 or the spring of 2017. In the weeks ahead there will be lots of debate about the nature of the question (should it go for ‘yes’ or ‘no’) and the size of the franchise (should the vote be extended to Commonwealth citizens, Irish citizens, 16 year olds, or other EU citizens?).

2. What will be in the renegotiation? Cameron has set out his main priorities in two important speeches. In my discussions with British officials and political advisers over the last few years I have noticed a gradual shift from putting most of the focus on repatriation (before the 2010 election) to renegotiation (after 2010) to reform (in his two Bloomberg speeches). Much of the agenda Cameron set out is about general liberalising reforms aimed at deepening the single market, simplifying regulation and pushing free trade. But there are four big sets of issues that are likely to form the heart of renegotiation. Firstly, the question of rules for in-work benefits for EU migrants. Europe is not a high-salience issue for the British public, but migration is. Many people in Cameron’s party want to restrict free movement of labour but Cameron balked at demanding that. Instead, he wants to change the rules for access to benefits (both those that people get when they are out of work and above all the tax credits which are offered to low-paid workers). Second is the question of the balance between the Eurozone and non-eurozone. Some of the technical elements around banking union were resolved with the idea of the ‘double-majority’ but there is a wider need to re-assure the EU that the Eurozone will not use its qualified majority to pre-cook important decisions and then impose them on the non-eurozone members. Third, there is the role of national parliaments and the idea of allowing groups of national parliaments to block EU legislation (the so-called ‘red-card’ procedure). Finally, there is the question of removing the commitment to ‘ever closer union’ from the preamble to EU treaties.

3. Will there need to be treaty change? Legal experts think that it is possible to achieve some version of most of these changes through secondary legislation and signing protocols, but many British officials think Cameron needs at least some minor treaty change for symbolic and practical reasons. However, even if Cameron manages to get other member states to agree to treaty change, it will be impossible to get it ratified in all 28 member states before a referendum. For that reason, officials suggest Cameron may need some kind of ‘backdated cheque’ or ‘promissory note’ setting out the ideas for treaty change which could then be ratified in the future. This move echoes the ‘vow’ that the mainstream parties made on Scotland, promising reform after the next election. In the event that pro-Europeans win a referendum based on a backdated cheque which is not ratified before the next election, they will be writing the campaign materials for UKIP.

4. Will Cameron’s campaign succeed? Even if Cameron manages to negotiate all the changes in his agenda, it is a fair bet that many of his MPs will not think they go far enough. Moreover – apart from the pledges on benefits for EU migrants – the majority of the changes appeal to elites. One of the interesting features of UKIP’s surge is that it has caused many mainstream voters to reconsider their flirtation with Brexit (recent polls show that those in favour of staying in are at 45% compared to 35% who want to leave – the highest pro-EU margin for several years). Based on the polls, a referendum is winnable, but the referendum on Scottish independence showed the difficulty that the pro-European side will have running a campaign based on counterpoising the risks of leaving with the hopes of independence; offering economic benefits to counter the ‘out’ campaign’s call for self-government; and marshalling business elites for the EU against the populist ‘outers’. The Scottish referendum also showed the dangers of having a single centralised campaign – much better for the EU ‘yes’ side to have a loose network of different campaigns that can allow the pro-EU side to reach out to bosses AND trade unions, supporters AND opponents of TTIP, cosmopolitans and pragmatic nationalists.

They could also persuade major companies that benefit from Britain’s presence in the single market – from Ikea and Findus to BMW and Deutsche Bank – to speak up about the economic risks of leaving.

The final question is whether other EU member states can do anything to prevent a Brexit? That is a topic for another article (see my paper The British Problem and what it means for Europe) but they can play a bigger role than they think. Other leaders can try to persuade the British government to support general reforms rather than treaty change. They can develop a common agenda on migration, self-government and growth. They could also persuade major companies that benefit from Britain’s presence in the single market – from Ikea and Findus to BMW and Deutsche Bank – to speak up about the economic risks of leaving.

Cameron’s entire political project has been based on putting the party back together after the chaos of the major years. It is a paradox that he should end up in such a similar predicament to his erstwhile boss, John Major. Major promised to use his opt-outs to return Britain to the ‘heart of Europe’. Leaders in other EU countries will hope that Cameron’s referendum is more successful in exorcising his party’s European ghosts.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.


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