This coming Friday’s meeting of EU heads of state and government in Brussels could well be a defining one in the history of European integration. True, we’ve seen a number of “make-or-break” summits recently, and EU leaders are always keen to play down expectations (German Chancellor Angela Merkel, for example, recently warned that the crisis could take “years” to resolve). However, in the face of massive and unending pressure from financial markets, the talk of “fiscal union” versus “Eurozone break-up” has never been taken quite as seriously as it is now.
We’ve already looked at the issue of treaty change on Debating Europe, and now it seems that treaty change is suddenly a very real possibility. On that post, we had a comment come in from Irish blogger Jason O’Mahony:
As this treaty will be primarily about how national governments run their fiscal affairs, perhaps it should be outside EU law. In other words, a multilateral treaty between member states that just happen to be EU members too. This way, even if a country refuses to ratify it, the other countries can go ahead agreeing policies outside the EU which they then apply inside the EU as a group.
With the UK threatening to veto any treaty change and Ireland asking for its debts to be reduced as a condition to agreeing, this suggestion might suddenly be very attractive to Eurozone leaders as a way to “streamline” negotiations. The question of whether the full group of 27 EU member-states should negotiate a treaty including everyone or whether the smaller group of 17 Eurozone members should just go ahead amongst themselves (and, perhaps crucially, without the UK), will be one of the fundamental issues for Friday’s summit. British Prime Minister David Cameron is keen to keep the 27 together for fear of losing influence, but the question of renegotiating (or “clawing back”) powers from Brussels is proving divisive within his party.
We recently spoke with two members of David Cameron’s party and asked them what they thought about Jason’s suggestion. First up is Andrea Leadsom, the Conservative Member of Parliament for South Northamptonshire and Co-Chair of the All-Party Group on European Reform. Would a “two-speed Europe” be a solution to the Eurozone crisis, as Jason suggests?
I think that for Europe to truly meet the needs of the 21st century, it needs to be self-reforming continuously. My concern about all of the treaties before is that they’ve been “one-way streets”. It’s simply ridiculous to think that something agreed 20 years ago would be able to cope with the challenges of the modern world. Whether or not any treaty change is entered into by all 27 member-states, it needs to reflect that requirement.
But isn’t there a risk of the UK losing influence if it pushes too hard for repatriation of powers and ends up excluded from a smaller “club” of Eurozone members?
Well, the key thing here is for Britain to look after Britain’s national interests. So, a treaty that excluded Britain isn’t per se a disaster, unless Britain wasn’t a party to it and yet it would affect Britain’s interests, which I obviously wouldn’t support. The problem we have is that the EU has so far overstepped its original mandate, it’s gone far beyond goods and services and delved into other areas. The European arrest warrant, for example, isn’t necessary for a single market in goods and services, yet you have stories of British nationals going on holiday and being held in dreadful conditions. That’s unacceptable.
And this negotiation should take place even if it risks endangering the stability of the Eurozone?
I’ve heard the arguement put from a senior German diplomat saying it’s selfish for Britain to want to renegotiate powers right now. I care about the British national interest; the term “selfish” doesn’t compute with me. If there is a limited treaty change then there should be limited renegotiation of powers – whether that is to get an assurance that there isn’t a Financial Transactions Tax (FTT) or whether it is to try and repatriate the 48-hour working week limit, which is having such a bad effect on British hospitals. It’s our duty to look after British interests at any time.
What do you believe would be the effects of a Eurozone break-up on the UK’s economy?
It would be a disaster for Britain. It would be a catastrophe for Britain if the Eurozone broke up. Essentially, if you look at why sovereign risks are believed to be risk-free, it’s because there is a lender of last resort. In the case of the Eurozone, however, there is no lender of last resort. There is not a happy outcome to this, and I do not believe there is anything we can do, other than to urge European leaders to do everything it takes.
There are, however, those within David Cameron’s party who disagree. Justice Minister Ken Clarke, for example, has said that the UK should focus on stability in the Eurozone rather than trying to take back powers. We also interviewed Lord Inglewood, a Conservative Member of the House of Lords and former MEP, and asked him what he thought about the renegotiation of powers:
I don’t find that approach remotely useful. It’s fine to have a debate, but there’s an immediate problem. My view is that, on balance, there is a real crisis out there and this is a secondary issue. If you’re at risk of shipwreck, your first priority is to stay afloat. Rather than squabbling, we should collectively see how these matters can be gotten better.
How big an impact would a potential Eurozone break-up have on the UK?
Whatever happens in the Eurozone has an enormous impact on what happens in this country. Being a member or not does not make a difference. I’m a Cumbrian farmer, and the value of my beef dropped overnight when the Irish crisis struck.
But we could be about to see a major change in how the EU functions. Isn’t a debate about which powers the EU has and which belong at the national level an important one?
I think you’re looking at the matter in the wrong way. What we’ve got now is a change in the way in which the world works compared with 30 or 40 years ago. The response to your question is that, looked at in an ideal Platonic position, there are powers exercised at European level and powers excersised at local and national level and it’s a two way street between them. But it doesn’t help when dealing with the problems of the future to talk of clawing powers back from the centre or of the centre grabbing powers from the member-states.
I’ve increasingly come to the view that this discussion is predicated on the question of “are you pro-European or anti-European”. I think this is completely wrong, and it actually is very dangerous. Europe exists. The network that Europe entails, the way in which nation-states are interconnected, the way that decisions are taken at a global level, exists. It’s important to recognise that the world does business differently now, and to develop those networks for decision-making.
One of the things that irritates me is the way Europe is positioned as a zero-sum game. I want the Greeks, Spanish and Italians to succeed because their success is also in Britain’s national interest. This is the only way to do it, or we’re all going to be beached.
What do YOU think? Is a two-speed Europe, with the UK in the slow lane, the only way to prevent a break-up of the Eurozone? Or should leaders try to keep the 27 together? Is it right for David Cameron to threaten to veto any treaty change? Let us know your thoughts in the form below and we’ll take them to policy makers and experts for their reactions.