New Settlement for United Kingdom within European Union
The President of the European Council Donald Tusk presented his proposals on February 2 for a ‘new settlement of the United Kingdom within the European Union’. If accepted, they would allow David Cameron to campaign in the announced ‘Brexit referendum’ for continuing membership of the UK in the bloc.
You will find here, the letter sent by the former Prime Minister of Poland to all EU members and here the text of the draft ‘decision’ which should be adopted by the Heads of State and Government in a meeting on February 18.
This draft is by no means a shot in the air: three months of talks were needed to arrive at this balanced compromise, which still leaves a few issues sufficiently open as to convince those skeptics that the final deal will be ‘the best possible’ for everyone. These talks involved high-level officials from the EU Commission and the Council Secretariat as well as close advisors of David Cameron. The Prime Minister himself toured the Member States in a declared effort to rally support for his requests for a ‘reformed Union’.
What are these Requests?
They are grouped in four baskets: ‘Economic Governance’, ‘Competitiveness’, ‘Sovereignty’ and – the most tricky – ‘Social Benefits and Free Movement’. Tusk’s draft decision addresses each of them in order, but it is important first to read the recitals which precede.
They first state clearly that the decision is in conformity with the Treaties; it will just ‘clarify certain questions … so that such clarification will have to be taken into consideration as being an instrument for the interpretation of the Treaties’. This is the maximum those who asked for Treaty change could get. The vast majority of the EU members had indeed told Cameron in his tour that a new Treaty is out of the question in today’s circumstances.
Tusk however suggests a few openings: a sentence in square brackets states that the substance of the section on Economic Governance as well as the interpretation of the ‘ever closer Union’ sentence will be incorporated in the Treaties at the time of their next revision – a formula similar to the one used for the ‘changes’ Denmark had asked for in order to encourage a Yes vote in its second referendum on the Maastricht Treaty. For the social benefits to European Union workers, the draft suggests that new rules might be introduced in future Acts of accession.
The rest of the recitals enumerate the impressive list of opt outs that the UK has already obtained with regard to EU policies in the past: on adopting the Euro, on participating in Schengen, on measures decided in the framework of ‘freedom, security and justice’ … and so on. The draft contains the most elaborate presentation to date of the ‘two speed Europe’, as it already exists and as it may develop further. The aim is to reassure those still concerned with the famous sentence in the Treaty preamble that variable geometry is now as much an EU slogan as the ‘ever closer Union’.
The section on Economic Governance addresses the difficult issue of the rights and duties of countries not participating in the Euro. Cameron had first asked for the Euro no longer to be considered as the currency of the Union – which would have required a Treaty change and was, for obvious reasons, not acceptable to the current members of the club. He then asked for a sort of veto right on decisions made at the level of the Eurozone members, a suggestion which was difficult to formulate; indeed, the latest formulation suggested infuriated the French, creating a last minute row which explains the late publication of Tusk’s proposals. The text of the draft reflects the difficulty of finding a compromise. In fact, the coexistence of bodies and rules established at the level of the Union with bodies and rules with similar objectives established at the level of the Eurozone – like the banking union institutions – is an issue which needs to be addressed even outside the Brexit context. At first sight, the proposed text looks well balanced, but further negotiation will probably be needed in the days to come.
On Competitiveness, the deal was easier to make. The Union is already engaged in the ‘better regulation’ process advocated by the Juncker Commission and the ‘active and ambitious policy of trade’ reflects the various bilateral negotiations under way, of which, as was abundantly commented, the UK will no longer be part of in case of Brexit.
The section on ‘Sovereignty’ addresses several issues. First, the ‘ever closer union’, a favorite of the Eurosceptics which has been discussed at length in all possible EU academic circles since Cameron opened a debate on the meaning of the sentence in 2014, in the European Council meeting which appointed Jean Claude Juncker. At the time, the Council stated that: ‘the concept of ever closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further’. The Tusk draft goes further in stating explicitly that the UK is not committed to further political integration of the European Union, but adds subtly that this is due to ‘the specific situation it has under the Treaties’, which seems to imply that this does not apply to other Member States. The other issues mentioned in this section are subsidiarity, a precise procedure to strengthen the ability of national parliaments to challenge EU legislation in the making – which should not be objected to by many -, a confirmation that the UK is not bound by policies of which a protocol exempts it and… a confirmation of an evident truth – that national security remains the sole responsibility of the Member States.
And then the ‘Social benefits and free movement’. A request was made, rather foolishly, when the debate about the referendum started, to stop the (numerous) citizens from the ‘new’ Member States who came to London in the last decade from enjoying social benefits in the UK as soon as they arrive. The arguments that discriminating against workers from other Member States is contrary to the basic EU treaty principles, that these migrants rather contribute positively to prosperity in the country, and – as was confirmed later – that the real problem is rather the migrants from outside the EU, did not succeed in removing this request from the table. Since it was not possible to give the UK satisfaction under the Treaties, a formula had to be invented to address the substance of the problem. The draft decision first elaborates on limits to the free movement of workers which could be considered as ‘legitimate’ – when social benefits are abused or when they face ‘flows of workers of such a scale that they have negative effects’. It then introduces the idea of an ‘alert and safeguard mechanism’ when the flow is of ‘an exceptional magnitude over an extended period of time’. All Member States could use this mechanism to limit access to in-work benefits ‘for a total period of up to four years from the commencement of employment’; but it would only apply to workers ‘newly entering’ the country’s labor market. Precisions in the timings are left for the final negotiation. Resistance from the new EU members can be expected, but Cameron might count on sympathy from Eurosceptics in Poland, Hungary and others for the overall ‘spirit’ of his proposals.
What Happens Next ?
Permanent Representatives and heads of governments’ ‘Sherpas’ will have a first look at the text on Friday, February 5. There will be little time after that for further negotiation before the February 18 European Council. But, according to Tusk, there is no other choice than success: ‘to fail would be compromising our common future’. If the text is adopted, Cameron will probably announce the date of the referendum at the end of the European Council. His colleagues will press him to choose the earliest possible: the Union is faced with other problems of a magnitude which allows to consider Cameron’s demands as secondary and not really timely. He is expected to announce that the referendum will take place on June 23, 2016.
It is now fairly clear that Cameron will play a strong, personal role in making the case for the UK to ‘remain’ in the EU. But at the same time, his colleagues will know that he will need their help in the campaign to make the scale weigh in favor of Britain staying in the Union – which will remain uncertain until the vote. They will know also, in looking at various exit scenarios developed recently, that a Brexit would be catastrophic for the UK – and a further blow to the Union, which is already suffering one of the toughest periods in its history.