20 May 2015

Treaty change or not?

A central topic of the EU reform/renegotiation/referendum discussion is whether or not David Cameron will be able to secure changes to the EU treaties in the negotiations.

The Foreign Secretary Philip Hammond has recently said that treaty changes are not required “for the politics” i.e. for presentational value. Instead, the focus should be on the substance of the reforms and whether UK objectives are met.

This is a view we broadly subscribe to. My colleague Raoul Ruparel set out in an article for the Daily Telegraph that there are three sets of issues facing David Cameron – substance, process and timing – and that he should address them in that order. Our joint paper with the Fresh Start Project of Conservative MPs also set out a range of options for how various reforms could be achieved.

Elsewhere on this blog we have set out that so far there has been a lot of speculation and background noise, but Treaty change is a matter of ‘where there’s a will there’s a way‘.

Nevertheless, despite Hammond’s comments, the issue is of great political importance since Cameron has been so categorical about his ambition to secure a treaty amendment.

Has Schäuble opened the door to a grand EU bargain?

The Wall Street Journal today quotes the German Finance Minister as saying he has invited his counterpart George Osborne to discuss how British interests can be reconciled with those of the Eurozone.

We have talked about him coming to Berlin so that we can think together about how we can combine the British position with the urgent need for a strengthened governance of the Eurozone.

Wolfgang Schäuble, 20 May 2015

We have hinted at the prospect of a grand bargain before, and an optimist would argue that the interests of various blocks of member states are becoming increasingly aligned around the ‘three Ss’ whereby the German-led Eurozone hawks get more supervision of budgets and economic reforms, the French-led Eurozone block get more solidarity (perhaps via some sort of investment vehicle or Eurozone budget) and the Brits and other Eurozone outs, such as Denmark, Sweden and Poland, get a stronger single market (including safeguards against Eurozone caucusing).

This type of bargain could form the basis of a treaty change. On this specific point, Schäuble also seemed to offer an olive branch to the UK. Acknowledging that a full-scale treaty change might not be possible before 2017, he however added:

…we will try to move in this direction, possibly through agreements that would later be incorporated into Treaty changes. There is a big margin of manoeuvre.

Wolfgang Schäuble, 20 May 2015

Downing Street shouldn’t get carried away but I think it would be fair to describe Schäuble’s latest intervention as both significant and helpful.