10 November 2015

What’s in the letter and speech?

There were no real surprises in either David Cameron’s speech or his letter to European Council President Donald Tusk given that both have been heavily trailed. The key points in terms of reform are:

  • A “formal, legally-binding and irreversible” end to Britain’s obligation to work towards an ‘ever closer union’ as set out in the Treaty,
  • Legally binding safeguards to protect the integrity of the single market from Eurozone integration,
  • A more ambitious push on economic competitiveness consisting of further deepening the single market, cutting red tape and concluding FTAs with other global economies,
  • An enhanced role for national parliaments including a collective veto right over new legislation,
  • Four year restriction on new EU migrants’ access to UK benefits and a more general crackdown on abuse of free movement.

What’s not in the letter and speech?

Given there were no major surprises it might have disappointed some people’s expectations that he would pull some kind of rabbit out of the hat. While this remains possible, it also has to be considered that some EU states may not take kindly to additional demands being added late in the negotiation process. The demands remain quite high level with few additional technical details and, as we have said before, the devil will be in the detail. For example, in terms of the competitiveness agenda, it will be relatively easy to get other EU leaders to endorse this principle but it remains to be seen what concrete progress will be made on top of the reforms already taking place. In his letter, Cameron calls for a “target to cut the total [regulatory] burden on business” but this is very vague and open ended.

The exact implementation or formulation of these reforms will be important. Not just in terms of whether they can actually be agreed but also on how they will be viewed in the UK. They need to be seen as permanent and legally binding to be taken seriously. As such, there is still a lot of uncertainty over exactly how the reform package will look. People can no longer complain they don’t know what the UK wants, but they can still question exactly what form this will take.

Notably, on the question of securing a four year restriction on new EU migrants’ access to benefits, Cameron left open the possibility of achieving this either at the EU level or domestic level, possibly via a new residency test, arguing that “I understand how difficult some of these welfare issues are for other Member States and I am open to different ways of dealing with this issue.” While this would achieve the objective set out in the Conservative manifesto, it would also impact on UK nationals whose access to in-work benefits would be similarly restricted, and he will come under substantial pressure from the media, Tory MPs and above all the Leave campaigns for not actually having achieved changes to EU-level rules.

In terms of content, there are issues which we believe still need to be on the reform agenda, especially in the longer term, including but not limited to: serious EU budget reform, reform of the European Court of Justice, devolving employment policy back to member states and restoring UK judicial control over justice and home affairs laws. Cameron skated over these issues – for example, on the question of justice and home affairs, he said that “the UK will need confirmation that the EU institutions will fully respect [and] preserve the UK’s ability to participate.” This is very vague and appears to demand only a reiteration of the status quo.

Did Cameron spell out his vision for the UK’s place in Europe?

Cameron has been criticised for failing to spell out his broader vision for the UK’s place in the EU but he addressed this existential issue today arguing for a flexible Europe which can accommodate both member states who want a more pragmatic trade-based relationship as well as those who have a deeper ideological commitment to European integration. He argued that the EU ought to recognise these different visions and “celebrate their diversity as a source of strength”. However, in seeking a UK-specific opt-out from ever closer union, Cameron has arguably undermined the principle of a more flexible Europe for everyone and underlined the UK’s exceptionalism. Cameron also hit back at claims that the UK is a ‘disengaged’ EU member pointing out its key role in foreign policy in forcing through EU sanctions against the likes of Russia and Iran.

What will other member states make of these proposals?

On Sunday, Open Europe published its assessment of where all EU states stand on the key reforms outlined by Cameron and how they might react to his demands. The graphs below highlight our assessment of where they stand on the overall package based on their views on the individual areas. You can find the full press release here and the full report here.

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Questions for both EU referendum camps

In his speech David Cameron followed Open Europe’s lead in asking questions of both sides. He is undoubtedly right that both sides will have to come up with fresh arguments to convince undecided swing voters and move away from preaching to the converted. Most polls suggest a third, if not more, of the population remain undecided on which way to vote while Open Europe research suggests a large majority of Conservative MPs are yet to make up their minds. These are the people who will decide the referendum and may well be influenced by the reform process.

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Cameron also pointed out that this is not about the survival of the UK, it is about whether it is more prosperous for the UK to be inside or outside of the EU. The national security theme is a relatively new one with Cameron flagging up the uncertainty around the world in the wake of Russia’s expansionism in Ukraine, the rise of IS and the refugee crisis triggered by the war in Syria, which suggests that this could be one his key messages if he chooses to campaign to stay in the EU. Ultimately, both sides of the campaign like to construct apocalyptic caricatures of what life might be like if we stayed In or Left the EU, while the reality is far more nuanced.

Cameron warns he has not yet decided which way he will campaign

While not entirely new, Cameron took a more forceful approach on this issue, insisting that he has not yet decided which side he will back. The move seems designed to assuage fears amongst the Conservative party that Cameron and Chancellor George Osborne will campaign to Remain no matter what, but also to apply pressure to other EU states on the day when he lays out his EU reform demands. Whether or not the former will be achieved remains to be seen. In pointing out that the UK was the second biggest economy in the EU, the second largest contributor the EU budget as well as its foremost military power, Cameron is trying to make other member states seriously consider what the impact of a potential Brexit would be on them. The risk though is that he fails to convince the domestic audience he is targeting while also alienating his foreign audience, though there is no doubt that if he returns empty handed on any of his key reform proposals, it will be very tough for him to convince some of the swing voters mentioned above.

 Background reading

Open Europe has already laid out in detail what it believes Cameron should seek in terms of EU reform, how some of these measures can technically be achieved. In the coming days we will also present papers on ‘ever closer union’ and a red card for national parliaments.

EU reform Heat-map: where do EU states stand on the UK’s EU reform demands?
http://openeurope.org.uk/intelligence/britain-and-the-eu/open-europes-eu-reform-heat-map-where-do-eu-countries-stand-on-the-uks-eu-reform-demands/

Open Europe poses ten questions for the EU referendum Remain and Leave campaigns
http://openeurope.org.uk/intelligence/britain-and-the-eu/open-europe-poses-ten-questions-for-the-eu-referendum-remain-and-leave-campaigns/

Safeguarding non-Eurozone states’ rights is key to new EU settlement – here’s how to do it
http://openeurope.org.uk/intelligence/britain-and-the-eu/safeguarding-non-eurozone-states-rights-is-key-to-new-eu-settlement-heres-how-to-do-it/

A blueprint for reform of the European Union
http://openeurope.org.uk/intelligence/britain-and-the-eu/a-blueprint-for-reform-of-the-european-union/

What if…? The consequences, challenges and opportunities facing Britain outside the EU
http://openeurope.org.uk/intelligence/britain-and-the-eu/what-if-there-were-a-brexit/

See the PDF reader below, or click here, to read in full the letter sent by David Cameron outlining his EU Reform proposals to European Council President Donald Tusk.

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