UK - EU negotiations: The difference between compromises and solutions

PM Cameron presented his wishlish for reforms at the European Council 17 december 2015. Afterwards there was an exchange of views between the participants. The media reported that Cameron´s proposals are difficult to meet, but there is willingness to compromise. This may sound positive for the negotiations, but does not mean Cameron will succeed. To do that he must achieve solutions to the four problem areas he described in his letter to President Tusk. The letter does not specify exactly how the reforms should be designed. That can be done in several ways and is a matter for the negotiations. But it is important that the concerns of the British people over their membership in the European union are properly addressed.

There are lots of EU sceptics in UK who argue that Cameron´s reform-wishlist is "trivial", that the only adequate measure for UK will be to leave the Union. If  Cameron comes back from the negotiations with compromises - measures which don´t address the challenges he describes well enough - it will be a gift-package to the leave-camp. They can then argue that not even such a modest wishlist as Camerons was the EU willing to accept.

To convince enough people that UK should remain in the Union, it will be important for him to negotiate credible solutions to his four problem areas (economic governance, competitiveness, sovereignty and immigration). He has some wiggle room, but the negotiations must appear as a success.

The media gave an illustration of Camerons wiggle room some days ago. According to an "unnamed official" had French and German leaders made a counter offer to Camerons proposal of a four year ban before EU migrants can claim benefits. They had offered Cameron a three year ban. If correct this might be enough for Cameron to claim successful negotiations concering benfits for EU migrants. A two year ban would be a typical fifty-fifty compromise and will not be enough for him.

Cameron´s EU negotiations

In an earlier discussion of possible EU-reforms we mentioned different expressions of dissatisfaction with how the union works: Eurosceptic gains in national elections, national referendums opposing EU politics, lawsuits from member countries against EU and the forthcoming remain/leave referendum in UK. This blogpost will have a closer look at the UK referendum.

PM Cameron announced in January 2013 his intention to undertake a renegotiation of EU practices to make them more aligned with UK government preferences, and to subsequently hold a UK referendum on EU membership. The proposals were contained in the Conservative manifest for the general elections in May 2015. With a new Conservative majority government he started the negotiation process and a EU referendum bill was introduced to the Parliament the same month.

It took some time before Cameron gave a fairly specific description of what he wanted to renegotiate with the EU. After conversatitions with his fellow Heads of Governments and upon a request from members of the European Council he described his "wishlist" in a letter to Council President Tusk 10 November. The letter together with Tusk´s comments will be discussed at the Council meeting 17 December.

According to Cameron´s letter he is seeking reforms in four areas: Economic Governance, Competitiveness, Sovereignty and Immigration. For each of the four areas he mentions concrete measures and principles which should be implemented to address the concerns of the British people over their membership of the European Union. He emphasizes that the reforms must be legally binding, but he does not describe the precise means, or detailed legal proposals, for bringing the reforms into effect. "That is a matter for negotiation, not least as there may, in each case, be different ways of achiving the same result".

Cameron said earlier there would be a lot of speculations during the negotiations. And this was obviously a correct prediction. The media coverage is filled with analyzes, rumours and references to "well informed" anonymous sources.

The negotiations are also characterized as a predetermined theatre where the europhile Cameron and the EU after apparently "very tough" discussions finally will present a trivial deal as a great reform success. But even if that perspective may be important to have in mind, the negotiations are a real political fight within the European Union and the British people will of course not be fooled by a  failure presented as a success.

The British wishlist and threat of exit represent a new and demanding challenge for the EU. On the one hand it´s difficult to let UK be cherry picking among EU-policies. Other member states would then demand the same option and the Unions politics would soon be chaotic. On the other hand, if the negotiations end with failure for Cameron and a "leave"-majority in the referendum, the consequences for the Union might be serious. Marine Le Pen, leader of France´s Front National, said some days ago that “Brexit would be marvelous - extraordinary - for all European peoples who long for freedom” and if the British public were to vote to leave the European Union it would be the modern equivalent of the toppling of the Berlin Wall and herald the beginning of the end for the bloc. A failure will also be yet another indication that the EU can not be reformed or reversed.

The only good solution will be to transform Camerons wishes into reforms which can benefit both UK and the 27 other member states. Cameron writes in the letter that this is his ambition and flexibility is necessary for success. But to convince he must of course come home with more than some adopted generalities.

It will be a difficult process.

Enough pressure for EU-reforms ?

No crisis seems to be big enough to hamper the european integration. The glue in the EU-construction is strong and the political majorities follow gladly the leading star of an ever closer union. Perhaps this development will continue. Someone says that it is impossible to change the EU-system. But resistance may now be so great that reforms are preferable to possible destruction.

Euro and migration crisis, democratic deficit and lack of trust have strengthened nationalism and the desire for a Europe with real subsidiarity. This development is expressed in many ways, including

Eurosceptic gains in national elections.
Poland's eurosceptic opposition conservatives, the Law and Justice party (PiS), won the general election in October this year. In Switzerland (which is not a EU member, but affects the European political temperature) a general election the same month became a triumph for the eurosceptic Swiss Peoples Party. Last Sunday Front National won the opening round in France´s regional elections. 

National referendums oppose EU politics.
A majority of Swiss voters backed a referendum proposal to bring back strict quotas for immigration from EU countries in february 2014. According to EurActiv the bid to seal an agreement between Bern and Brussels has been stalled by EU member Britain's similar demand to limit immigration from within the EU, making it hard for the EU to offer a preferential deal for Switzerland before it has settled matters with Britain. Switzerland has now threatened to impose unilateral curbs on immigration should it fail to agree with the European Union on limiting the influx into a country where nearly a quarter of the population is foreign. Earlier in December the Danes rejected  to abandon their opt-outs from EU home affairs legislation and adopt EU-rules for cross-border policing.

Lawsuits from member countries against EU.
Slovakia has just filed a lawsuit at the European Court of Justice against an EU decision to redistribute 120 000 asylum seekers among the member countries, the first legal challenge to a measure that has divided the bloc. Also Hungary has said it has filed an equivalent lawsuit.

Remain/leave referendum in UK.
Based on a renegotiation of the British EU membership, there will be a remain/leave referendum in UK by the end of 2017.

Eeach of these developments are important and toghether they represent great pressure for EU reforms. But will it be enough ? Not necessarily, but the UK´s renegotiation and referendum might be a game changer in history of EU-reforms. The next blogpost will have a closer look at the renegotiation.
 


 

Important UK - EU negotiations

While we are waiting for PM Cameron to present a more detailed whishlist for a reformed relationship between UK and the European Union, it is interesting to have a look at the negotiation  process. It is a political tool intended to ensure a "yes" majority in the forthcoming referendum.

But who are the people that will be influenced by the negotiation results ? It is not the europhiles. They will vote yes even if Cameron comes back empty-handed. The anti-EU camp want UK to leave the supranational EU and will vote no even if he has a great success. The primary audience to be influenced are voters outside these two groups, the people whose attitude to EU-membership are more open.

This does not mean that the negotiation results are of no significanse for europhiles and eurosceptics. On the contrary these groups will use the results in their referendum campaigns, arguing that necessary EU-reformes are achieved or that the results show that significant EU-reforms are impossible.

Successful negotiations are also important for the EU. The Union needs reforms to cope with financial crisis, growing eurosceptism and lack of trust. An UK-exit will be a severe blow for the Union.

Because the negotiation results are of importance for so many, the process will be a serious effort of policy development and can at best initiate a necessary adaption of European integration.

UK election with international consequences

PM Cameron confirmed in his first speech after the general election on 7 May that there will be an EU referendum before the end of 2017. The referendum will be based on a renegotiated relationship between the Union and the UK.

Exactly what Cameron´s demands will be is still unknown. Earlier he has said that Britain not will follow "an ever closer union" as a lodestar any longer, that he will not accept that changes in the single market shall be imposed on non-eurozone members by the eurozone, and that he wants a scrutinizing of social benefits for EU migrants and greater powers to national parliaments.

The process which now will start up must be welcomed, because the European Union needs reforming. The realistic possibility for a British exit will put pressure on the Union and give Cameron weight in the negotiations.

It is of course impossible to predict what Cameron can achieve and what the result of an referendum will be. What seems clear is that both the negotiating period with a lot of discussions and the referendum will have international implications and consequences.

When the EU starts negotiating it will be highly aware that any concession to Cameron might tempt other members to ask for the same - with or without threaths of exit. And a Brexit may raise questions about the unions viability. Therefore it may be that the Union will not only discuss special arrangements for UK but also will look for universal solutions - ie reforms for the Union as a whole. Even if the negotiations will steer away from issuses that require treaty changes, they might include questions which can be settled by using the simplified procedure for treaty changes and they might also result in agreements which will be incorporated in treaty amendments later. And the negotiations can of course be a sort of kickoff for a wider reform process in the Union.

The forthcoming discussions and negotiations will also be of interest outside the EU. For the EEA EFTA countries Norway, Iceland and Lichtenstein the discussions of a possible Brexit will be of special interest. If UK decide to leave the Union, it will have to reorganise the relationship with the EU. One of the most likely options will then be to join the EEA. That will mean new opportunities and new challenges for the current EEA EFTA countries.

A Brexit will have geopolitical consequences. EU as a whole will get less weight compared to other major powers. How UK will be perceived is not as clear. An article in Washington Post 9 May, which also commented upon the election success of the Scottish National Party, said UK now risks becoming more isolated than at any time in its modern history, and that David Cameron will need all his skills to avoid going down in history as the founding father of Little England. The proponents of Brexit will of course describe the situation quite differently.

 

A look inside the EU debt prison

While the Greek government is struggling with their creditors, the European Parliament has published a study on how the crises affects fundamental rights in seven EU member states: Belgium, Cyprus, Greece, Ireland, Italy, Spain and Portugal. The study, which is done by Milieu consultancy in Brussels, cowers the right to compulsory education, right to healthcare, right to work, right to pension and the right to access justice.The freedom of assembly and freedom of expression were also loooked into.

The main conclusion seems to be that austerity undermines fundamental rights across the EU. EurActiv gives a summary of the report:

Education systematically slashed. All countries cut the number of teachers in their schools, while the number of pupils rose. Some schools in Greece are not heated, hygiene standards no longer respected in Italy. More inequality because of lack of books and other equipment.

Health costs transferred from state to citizen. The report states that "in Greece, the bail-out agreement shifted the burden of healthcare from the State to the patient, with an increase in user fees and co-payments for certain medicines", which has led to a series of damaging consequences for the population. Across the member states there is an explosion of waiting times. There is a reference to an article in The Lancet which says that "the predominant response [from the Greek government] has been denial that any serious difficulties exist, although this resonse is not unique to Greece; the Spanish Goverment has been equally reluctant to concede the harm caused by its policies". The article gives the counterexample of Iceland, which decided to maintain its existing health policies even when confronted by the IMF after the 2008 financial crises.

Critical shrinking of employment, pensions and justice. The crises cost EU around 50 million jobs whilst increasing the number of job seekers by 80 million, resulting in mass unemployment in several member states. Belgium, Greece, Spain, Italy and Portugal have all raised the pensionable age, and most countries have reduced the amount they pay out in pensions each month. Legal aid has been cut. Belgium and Greece have introduced VAT on lawyer´s fees.

Horizontal budget cuts. The report highlights that the spending cuts introduced during the crises were rarely specifically targeted at the wasteful uses of public resources. Rather, it seems that many of the imposed measures were horizontal, indiscriminate cuts across policy areas they targeted, in order to meet financial savings that were determined in advance. The abolition of Greek public television is one such horizontal measure, which is seen today as inefficient and potentially dangerous.

Looking inside the EU debt prison one can easely get the impression that austerity is punishing the poor for the mistakes of the rich.

Horizon haircut boosting 2 mill new jobs ?

The International Labour Organisation, ILO, backs Juncker´s € 315 bn investment plan and says it has the potential to create more than 2 mill new jobs. Using a small amount of public money to lever in private capital can complement the monetary measures recently announced by the European Central Bank.

Parts of "the small amount of public money" will come from a haircut of EU´s research and innovation programme Horizon 2020. Research organisations don´t like this part of the investment plan at all. The European Association of Research and Technology Organisations  have published a statement expressing deep concerns about the proposal and says it offers little reassurance that the investment plan projects will effectively aim at supporting R&I activities.

The Council and the European Parliament will decide on details of the investment plan later.