‘Europe must change, otherwise we leave”, threatens the British government. Such threats have been going around for quite some time now, with only problematic solutions in sight. However, what is clear is that, regardless of the outcome, the British referendum can only have losers.
Some wishes on the UK’s list are inconsequential. The rest varies from being unclear, to damaging for the eurozone. The heated debates over changes mainly reflect national political emotions. Apparently, the UK’s support for membership is so unstable that it may as well leave the Union. Making concessions that may harm the eurozone is more dangerous. As is often the case with threats: they are best ignored.
First and foremost, Prime Minister Cameron, wants no distinction made between euro countries and countries that have kept their own currency. The British believe the EU is all about the internal market and do not want the eurozone to become some sort of first-class EU. The UK government does not accept that a healthy euro is the euro countries’ highest priority. Any policy to be conducted will have to be judged by the euro countries in terms of its consequences for the euro. For instance, the British regard bank regulation as an internal market issue. However, in the eyes of the eurozone, banks pose a systemic risk that needs to be contained. Too bad for the British, but they are not in the euro and therefore cannot impose their views on the eurozone.
The second concession that the British want to enforce is the recognition that competitiveness should be the most important EU principle. This sad demand ignores that EU policy is always assessed against several criteria, including its effects on global competitiveness. Large-scale deregulation operations are high on the agenda. EU policy is recognised to be of high quality and the British have not been able to prove otherwise. Moreover, the EU also aims to take other objectives into account, such as sustainability. A British competitiveness diktat is unacceptable because the European countries as a whole may have quite other, possibly more mature, considerations, for instance as regards bank regulation.
The third set of demands is about European symbols. This quickly becomes quite technical and pointless. Cameron wants the reference to an ‘ever closer union’ taken out of the Treaty. Already last year, these three words were stripped of their significance by the European Council’s statement that they have no special meaning. However, the British want them symbolically removed. They also want national parliaments to be able to issue a red card to the European Commission in order to stop policy initiatives. This red card should give national parliaments a sense of control. Cameron believes in the ‘sovereignty’ of the British parliament and wants the British citizen to regain trust in the EU through the red card. Yellow and orange cards already exist, but I have never met a citizen who got a pro-EU feeling from them. More important than a symbol of national self-esteem is that red cards may be damaging for the eurozone. If the card could work, then France and Italy, to name a few, would only be too happy to use it to stop legislation needed to liberalise the eurozone. A red card may have negative consequences for the internal market, where reforms are needed, but the damage to the eurozone may be a lot worse. Besides, these claims imply Treaty reforms, and thus referenda and vetoes in, among others, the Netherlands.
The last field of reform concerns the treatment of migrant workers. Demands in that respect may restrict free movement of workers, which is bad for the internal market but even worse for the eurozone. Free movement of persons is necessary to make sure that unemployed people from one country can work in another country. If free movement is restricted, the eurozone will need a social safety net, which is not feasible. Cameron does not care about the eurozone needing labour mobility, seeing that he distances himself completely from the euro. The British wish to limit labour mobility stems from overdue reforms in their own welfare state and from UKIP’s opposition to East-European workers. Cameron needs to resolve this at home instead of at EU level.
It is typical of the British arrogance that they think they are sovereign, that other Member States would not want meaningful competition, and that they see themselves but not other Member States as global players. The discussion says a lot about the UK and little about the EU. If Cameron contemplates an exit, so be it.