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Cameron’s EU reform agenda laid bare

In a little reported speech on 13 May by the UK’s Europe Minister, David Lidington, the bare bones of the UK Prime Minister’s EU reform agenda can now be discerned more closely, writes Tim McNamara.

Although deliberately vague in parts, it is apparent from the speech that a pro-business, pro-competitiveness agenda will be pursued relentlessly. Lidington was addressing an audience in Brussels at the pro-EU think tank, the European Policy Centre.

Make no mistake, this was not an ‘off-the-cuff’ presentation by a pro-EU Tory Minister to a friendly audience. This was a carefully constructed speech that would have taken weeks to bring to fruition. The speech would have been back and forth between the Prime Minister’s office and William Hague’s Foreign Office. Each word, each punctuation mark, each phrase would have been agonised over before final approval at the highest level would have been given.

One thing is clear, the current leadership of the Conservative party want to remain in the EU. Whilst the UK’s demands are wide-ranging they are not absolutist positions. Furthermore the path to reform sketched out in the speech will only be followed if the Conservatives win an outright majority at the UK general election in 2015.

The content and more importantly, the timing of the speech was also designed to send a message to the next Commission President that a change of legislative culture would be necessary. Cameron’s main objective is to achieve a demonstrable alteration in the direction of the EU and what it can achieve as an organisation as well as embed a much more business-friendly environment within the institutions.

First and foremost it is quite apparent that Cameron acknowledges that any reform must be achieved without necessarily needing a new Treaty of the European Union. He is mindful of the complex difficulties several Member States would have ratifying such a Treaty change through the legislative burden of holding referenda. Therefore, by necessity, the Cameron initiative is not a maximalist position.

The four planks of the reform agenda are enhanced competitiveness, changes to free movement, non-discrimination amongst Member States and greater democratic accountability to national parliaments.

Part of the text and the sub-text is enhanced competitiveness set in a global context, whether that be labour market reform, deregulation, complete the single market in services or establishing a single market for digital services. it also calls for the completion of the transatlantic Trade and Investment Partnership (TTIP). The current UK position wants to see the next Commission taking a minimalist stance to new legislation.  Consequently, there will also be calls for greater rigour for impact assessments and that these should take place at the end of the legislative process rather than at the beginning.

For the UK, the integrity of the single market is paramount. Hence Lidington’s speech explicitly “…underlined the need to avoid discrimination between euro-ins and euro-outs.” Cameron believes he has the full backing of Angela Merkel on this point. Lidington was quite clear that any form of discrimination against non-euro Member States would inevitably lead to alienation and risk the fundamental integrity of the union.

For tactical reasons Cameron will no longer characterise his reform agenda as one of repatriating powers back to the UK. Although this would go down well with his domestic critics (especially from his own party). He understands that he would not get unanimous support in the rest of the EU for altering the social chapter for example. Especially as any negotiation would take place in the shadow of the French Presidential campaign and the German federal elections, both to be held in 2017.

Whist Clegg has dismissed the phrase “ever-closer union” as political ‘flim flam’, the phrase originates from the preamble to the original Treaty of Rome in 1957. Clegg actually misunderstands the symbolic nature of the phrase and the political kudos to be gained if it can be clearly understood that it doesn’t apply to the UK (maybe extend that to non-euro members as well).

Tony Blair instinctively knew that the repeal of Clause IV of the Labour party’s was a necessary symbol in establishing the electoral popularity of ‘New Labour’ by signifying that it had radically changed. Cameron has identified the phrase ‘ever-closer union’ as having a similar totemic significance for the eurosceptics in his party.

The other symbolic target will be with regard to the free movement of people. The issue of immigration has the greatest capacity to be vulnerable to ‘dog-whistle politics’. UKIP’s present popularity is based, to a significant degree, on the issue of opposing further immigration. Cameron wants to turn this issue into one of supporting the free movement of labour not that necessarily meaning the complete free movement of people. If Cameron can remove the entitlement to benefits for a significant period (e.g an initial six or 12 months), he will be able to claim he has reorientated the debate in political terms. Current legal advice is that it is achievable without requiring a change to the treaties.

Finally, the Tory leadership wants to see a form of greater democratic accountability by national parliaments (acting as a group) being able to veto future EU legislation. Under the Lisbon treaty, if one third of Member States (i.e. 10) believe that a piece of legislation is better dealt with at the national level, then the Commission has to re-think its legislative proposal.

Cameron wants to introduce a red card mechanism that would mean that national parliaments would be able to block EU legislation. Whether that would require more than one-third or half of national parliaments is not clear at this stage. It is also not clear if this would be a weighted vote or simple majority voting. It is likely that this would not necessarily require treaty change. The Commission could simply adopt an informal agreement that they would not proceed with legislation if a red card was wielded.

One consequence of the UK’s current position is that it is highly unlikely that Cameron will back any of the current candidates battling to be the next president of the European Commission. From London’s viewpoint, Juncker is perceived as a federalist and there will be natural antipathy towards the socialist candidate, Martin Shultz. The problem for Cameron is that, since the adoption of the Lisbon treaty, each Member State no longer has a veto over the appointment, the final decision will be taken by qualified majority voting.

Lidington’s speech (which undoubtedly carries the imprimatur of Cameron) indicates that he and his leadership allies want the UK to remain part of the EU. Whether he can achieve enough of his reform agenda in negotiation with the other Member States so as to campaign for a ‘Yes’ vote in a referendum is still up in the air. His strategy appears to be one of by-passing difficult obstacles (e.g the social chapter) rather than laying siege to them.

The other side of the same coin is whether what can be achieved will be deemed to be acceptable to the majority of his party. A post-2015 Conservative party will inevitably be more eurosceptic than the present one. Some eurosceptic fundamentalists will never be satisfied with any outcome. If there is to be a majority Conservative government after May 2015, then a referendum campaign will see large swathes of the party on either side of the debate.

Tim McNamara is head of the Peercourt consultancy firm. He was previously political editor at the European Commission

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