Britain’s fragile EU membership

Britain’s relationship with the European Union has been in the spotlight recently with Conservative Prime Minister David Cameron under pressure from his increasingly eurosceptic backbenchers to hold a referendum on the UK’s EU membership during the next Parliament.

Cameron, himself a eurosceptic who, however, (so far) still believes Britain should remain an EU member, is in fact preparing to make a major speech later this month on his Government’s future European policy. What he has said so far is that his Conservative Party will offer voters “real change” and a “real choice” on the UK’s position in the EU at the next election.

He has also said there is a need to redefine the relationship between the two sides in view of the plans by eurozone member states for further integration. Cameron did cause some concern, both in Britain and EU capitals (as well as in Washington and business circles) when during a press conference last week he refused to guarantee that Britain would still be an EU member in 2020.

The Obama administration, for example, has publicly expressed its concern about Britain’s future relationship with the EU. Philip Gordon, the US Assistant Secretary for European Affairs said recently it was in America’s interests to see a “strong British voice within the EU”.

He added: “We have a growing relationship with the EU as an institution, which has an increasing voice in the world, and we want to see a strong British voice in that EU. That is in America’s interests. We welcome an outward-looking EU with Britain in it.”

In other words the ‘special relationship’ between Britain and the US would not be so ‘special’ should the UK decide to exit the EU. Britain is an important actor on the world stage, but if it had to leave the European bloc, its global relevance would be greatly diminished.

Furthermore, leading British business figures recently warned Cameron, in a letter in the Financial Times, that the Prime Minister risked destabilising the UK economy by unintentionally taking Britain out of the EU if he attempts to go for a “wholesale renegotiation of our EU membership”.

The businessmen said Cameron was right to insist on reforms to the Single Market, the EU budget and the working time directive, but a more fundamental renegotiation “would almost certainly be rejected”.

“To call for such a move in these circumstances would be to put our membership of the EU at risk and create damaging uncertainty for British business, which are the last things the Prime Minister would want to do,” they said.

And Eamon Gilmore, Ireland’s Deputy Prime Minister (whose country holds the EU presidency) said Britain should not be allowed to set up a type of membership different from other members.

“We’re either a union or we’re not. This is not going to work if we have 27 or 28 categories of membership,” he said. “The European Union is not an à la carte menu.”

Significantly, Lord Heseltine, a former Conservative Deputy Prime Minister, and Cameron’s adviser on economic growth, last week warned that the Prime Minister’s European policy could create uncertainty in the British economy and drive investment away from the UK.

Interviewed by the Financial Times, Heseltine warned that Cameron’s wish to renegotiate Britain’s EU membership and have the electorate vote on the package could lead to an exit from the bloc.

Heseltine quoted Lady Thatcher, saying: “Never enter a room until you know how you’re going to get out of it.” He added: “There is a very powerful political force [the country’s growing eurosceptic movement] which is driven by a number of our national newspapers, which have become, effectively, propaganda sheets.”

Heseltine is, of course, right about Britain’s eurosceptics dominating the debate about the EU, and unfortunately this movement has been consistently backed by most of the country’s media – which has become hysterically (and very unreasonably) anti-EU, especially the tabloid press.

However, Britain’s political class (including Tony Blair, probably Britain’s most pro-European Prime Minister) has also failed miserably to explain to the electorate just how beneficial Britain’s EU membership has been, especially in terms of jobs and investment.

Britain’s voters should keep in mind that roughly half of UK exports go to the EU, 10 per cent of British jobs depend on the Single Market, every UK household ‘earns’ between £1,500 (€1,814) and £3,500 (€4,232) every year thanks to the Single Market and only 6.8 per cent of UK primary legislation and 14.1 per cent of secondary legislation have anything to do with implementing EU law.

Furthermore, should the UK opt for a free trade agreement instead of membership, this would come at a huge financial cost. Just ask Norway or Switzerland how much it costs them to access the Single Market. Britain would also have to abide by all the regulations of the Single Market without having a say when these rules are drawn up.

Britain would lose out should it exit the EU, and so would the EU which has benefitted from British membership. Brussels gains from the UK’s links to the US as well as its liberal beliefs within the Single Market, to name two benefits.

Perhaps Heseltine summed up the situation best when he said last week: “Britain’s self-interest is inextricably interwoven with Europe. There isn’t anywhere else to go.”