Over the past decade the EU has become far friendlier to British interests, both economically and politically. Yet over the same period Euroscepticism in Britain has gained ground. The EU's constitutional treaty codifies the new pro-British EU, but few people seem happy to vote for it. What's gone wrong?by Anand Menon / November 21, 2004 / Leave a comment
Published in November 2004 issue of Prospect Magazine
It is barely six months since the prime minister made his dramatic Commons statement announcing a referendum on the European Union’s new constitutional treaty. Yet one could be forgiven for thinking that this was nothing but a bad dream, given the deafening silence about Europe since. The referendum campaign, it would seem, has been put on the backest of back burners. The government can win this vote, but to do so it must start to make its case. And that case must be one based on the fact that the EU, now more than ever, serves Britain’s interests well. The excesses of popular Euroscepticism are well known to Prospect readers. The sometimes uncritical views of parts of the pro-Europe lobby are less often remarked upon. Yet Europhile approval of anything the EU does, and its constant desire to see it do more, have reinforced national anxieties about the nature and development of the EU. It is Europhiles, after all, who popularised the “bicycle theory,” according to which integration must be continually deepened if the endeavour is not to collapse. This has raised the spectre of a ceaseless draining of power to Brussels from national capitals. Europhiles can even outdo the Europhobes when it comes to spreading speculation disguised as fact. Thus while the Sun claimed that 2m British jobs were at risk if Britain signed up to the constitutional treaty, Europhiles were busy proclaiming that non-entry into the euro would cost us 3m jobs. The dialogue of the deaf between Eurosceptics and Europhiles does little to enlighten the many people who are uncertain about the purpose of the EU and the nature of Britain’s relationship with it. But the case for membership is actually rather prosaic. It is based on the need to address both a very old and a relatively new problem of international relations. The former problem is interstate conflict. The EU provides a legal and institutional framework for the resolution of conflicts between its member states. Without the EU, the only responses open to Britain for dealing with the unilateral ban imposed by France on British beef exports would have been either to retaliate in kind, raising the prospect of a mutually damaging trade war, or to pursue a lengthy review of France’s action before the WTO. As an EU member, Britain had swift recourse to a court with the authority to force the French to back down. The newer problem concerns the regulation of high levels of interconnectedness between European countries. EU member states are more interdependent than any group of sovereign states has ever been. Flows of people, trade, money and information have grown sharply since 1950, raising the delicate issue of how best to manage them. Neither national nor bilateral regulation is adequate, but a regional regime over which all countries have some say provides an effective and equitable answer. A British company offering telephone services to French customers is now regulated by laws which both countries have helped to shape, and which is open to legal challenge by competitors and consumers throughout the EU before national courts and, ultimately, the European Court of Justice. A company from a non-member state trading in the EU has to respect rules over which its government has had no say. The EU has developed into a potent source of laws and regulations – Europe’s transnational space. This has allowed businesses to trade more easily across frontiers in order to create a more competitive and productive economy; helped police forces to co-operate against transnational crime; guaranteed a few minimum standards both at the workplace and for such things as drinking water; and created, in much of western Europe, an area without frontiers. These are conditions that Europeans have rarely, if ever, been able to enjoy. In addition, co-operation on the world stage has allowed EU states to maximise their influence not merely in global trade negotiations but also in attempts to manage and prevent international crises: it is rarely mentioned that the EU has recently played a crucial part in preventing another Balkans conflict erupting in Macedonia. In order to ensure that these functions are carried out effectively, the member states have created a network of institutions designed to regulate their interactions. Their national representatives meet in the council and agree binding legislation. The parliament, directly elected by the voters of Europe, ensures that this legislation is democratically scrutinised. The European commission acts as an institutional lubricant. It is responsible for preparing and proposing legislation, and it does so in an independent manner, on behalf of all the member states. It is also responsible for ensuring in an impartial way that member states respect the agreements they sign – a task in which it is aided by the court. This network is the “Brussels” of popular mythology. The defining characteristic of the system is its dependence on the member states. Popular parlance refers to “the EU” as if it were an autonomous entity, but the truth is that it does not really exist separately from the member states. Its legal instrument of choice is the directive, a text agreed on by the member states which must be turned into 25 separate national laws. This allows for a great deal of variation and suppleness in the system. In the absence of a large central bureaucracy, the EU relies on the member states to implement these laws. In sensitive areas such as foreign policy, where the EU does not make law, co-operation is based on the need for unanimous agreement between member states. And this is real unanimity, of a kind which would not allow what happened at the UN in 1950 when, in the absence of the Russian representative, the security council voted for military intervention in Korea. In contrast, total paralysis followed De Gaulle’s withdrawal of French officials from the council in 1965. Even in those areas where there is a provision for majority voting, the member states tend to work by consensus, ultimately the only tenable basis for interstate co-operation. The notion that the EU – with its tiny budget and small staff – represents a nascent superstate is simply unsustainable. Both Europhiles and Eurosceptics like to claim that 60-70 per cent of all new legislation in Britain comes from the EU. The real figure is closer to 50 per cent. Moreover, most of it deals with relatively neutral, technical issues like health and safety. This “red tape” would still exist even if the EU did not – it would simply come from London instead of Brussels. Indeed, as Andrew Moravcsik has pointed out in Prospect (March 2003), what is striking is how little of what matters to national voters is handled in Brussels at all: health, education, pensions and welfare, law and order, and tax are all, and will remain, national prerogatives. As for the commission, this is an under-resourced institution barely capable of carrying out its core tasks, let alone cunningly attempting to wrest new powers for itself from national capitals. Its autonomy is confined to specific tasks of implementation and regulation – areas not handled by elected politicians in any democratic system: imagine an elected head of Oftel or the civil service. The effect of the single market – inspired in part by Margaret Thatcher – has been to liberalise and open markets to the benefit of consumers. And no country will benefit more than “rip-off Britain” from such trends. Indeed, Britain is widely regarded by other EU countries as the member state which has benefited most from the single market. Air travel, energy and financial services are among the sectors to have felt the impact of the EU’s efforts to open markets to competition. The commission, for example, has recently blocked public subsidies to Germany’s regional savings banks – in the long run, this should benefit Britain’s relatively competitive financial sector. It is British companies such as Vodafone, used to operating under highly competitive market conditions, which often enjoy a comparative advantage over their more cumbersome European service sector competitors. It is no exaggeration to say that one of the effects of EU membership has been to allow Britain to export its economic policy preferences to its partners. Britain has also become one of the most skilled countries at shaping the EU. Ask a representative of any other member state in Brussels and they will confirm that British officials routinely prove the most effective at getting their way in negotiations over EU legislation. The same observer would also confirm that British companies are the most accomplished lobbyists, and highly effective at making use of legal actions before the European court of justice. Indeed, the court and the commission have proved reliable allies in the quest for market liberalisation. It was, of course, not always thus. Euroscepticism did have a rational basis. The European Economic Community that Britain joined in 1973 was not a very welcoming place for the somewhat reluctant latecomer. The relative continuity of British history has made this country more cautious about new political institutions and perhaps more jealous of its sovereignty than some continental states, where regime change has been a routine event over the past 200 years. And there were many Britons, even among supporters of entry, for whom the act of joining represented an admission of failure. More concretely, the economic rules of the EEC, as it then was, were written by France and Germany to favour small farmers and successful manufacturers – both noticeable by their absence in 1970s Britain. And while Britain considered itself to be joining an economic club for economic reasons, the original six member states believed that economic integration served political purposes. These were linked to the effort to overcome the psychological and material traumas inflicted by the second world war and driven by a Franco-German motor. No wonder Europe felt an uncomfortable place for Britain – especially in the late 1980s and early 1990s with Jacques Delors at the commission and federalist ideas once more on the march. The contrast with the position today could hardly be more dramatic. The arrival of an EU of 25 has not only killed the federalist ambitions of the late 1980s but also dethroned a Franco-German partnership which can agree on less and less. Moreover, in an enlarged EU there is no conceivable project for significant further integration that would win the support of all member states – the one possible exception being defence and security, where British exclusion is unthinkable. The commission, meanwhile, has been weakened by a series of treaty changes that remove it from the centre of power. Furthermore, the single market has expanded aggressively to cover service industries – far more central to the British economy than either agriculture or manufacturing. Active British membership has ensured that EU provisions benefit us. If Britain had not been a member, our financial services sector would still have been bound by the original provisions of the investment services directive. Before the amendments insisted upon by British negotiators this would have cost our firms an estimated £200m. Thus, as a consequence both of the skill with which Britain has handled EU membership and of structural changes to the union itself, we now participate in an organisation in which English is the dominant language; where market rules rather than political intervention shape the economy; where recent rounds of enlargement provide London with more allies than ever before; and where European defence policy aspirations are tied to the continued primacy of Nato, rather than to ambitious schemes for the EU to act as a counterweight to the US. It is also an EU in which José Barroso’s new economically liberal European commission seems anxious to echo London’s enthusiasm for economic reform. How incomprehensible, then, that John Redwood’s objective is a relationship with the EU that is “more closely modelled to what we originally joined.” The constitutional treaty on which Tony Blair has called for a popular vote is scarcely more than an attempt to codify this situation. Small wonder that the French press has been full of articles wondering whether to support a text which enshrines an “Anglo-Saxon” EU. The treaty does nothing to undermine the EU’s liberal economic bias; it reinforces the primacy of Nato over European security affairs; it tinkers with the EU’s institutional structures only in order to strengthen the role of the member states while shifting some power back from small states to big ones. All in all, it is far less radical than several treaties that have preceded it, and pales into insignificance when compared to the reforms achieved by the 1986 Single European Act (negotiated and signed by Margaret Thatcher). Its purpose is to make minimal changes to ensure that the EU can function with 25 members. Oxymoronic though it may sound, the treaty amounts to an important tidying-up exercise. While the changes it brings in the structures and workings of the EU are relatively minor, it puts an end once and for all to radical schemes for the creation of a federal Europe. Tax harmonisation, a key objective for some member states, is now dependent on unanimous agreement in the council. The fears of the CBI concerning the impact of the charter of fundamental rights have been assuaged by wording which severely limits its applicability. And a new full-time president of the European council will provide strategic leadership for the EU, reinforcing the primacy of the member states over the commission. Opponents of the treaty claim that it represents a further big shift in power to Brussels. There is remarkably little evidence for this. It is true that there is some transfer of responsibility to the commission in the field of justice and home affairs – covering issues like cross-border co-operation on crime and immigration – but Britain has been one of the main drivers of harmonisation in this field. It is also true that a new “foreign minister” might create momentum for a more visible foreign policy. But his or her powers will be limited both within the EU (where the European council president will provide a constant source of rivalry) and over member states, who will retain the right to set their own foreign policies. It is true that the new text is hardly a model of brevity or clarity. Yet this should be cause for celebration, not concern. The US is a federal state. It can afford the kind of snappy constitutional text that an international institution cannot, because its citizens are bound together by national structures – such as political parties and media – and a common sense of identity. Consequently, Washington can impose its decisions on the states – witness the National Guard in Birmingham, Alabama during the civil rights protests. The EU, on the other hand, is a curious amalgam of a state-like entity and an international organisation. Securing its effectiveness is crucial, given its centrality to the day-to-day economic lives of the member states. Yet these same states are also jealous guardians of their national prerogatives. Balancing the two requires a lengthy document. Those who, when not attacking the EU for being power-hungry, criticise it for being complex, are missing the point. This complexity stems precisely from a desire to ensure that the member states retain ultimate control in a system which, nevertheless, manages to function for their mutual benefit. Given that the constitutional treaty introduces only minimal changes, the EU could survive without it. Yet the significance of British ratification has come to exceed the implications of the text itself. Much of the debate in the run-up to the vote will concern membership rather than the details of the treaty itself, so a “no” vote would be viewed in many quarters as a vote against continued British participation and would strengthen the hand of those seeking that outcome. It is uncertain what the other member states might try to do if confronted with a British rejection. Legally, the situation is clear. The treaty cannot be adopted without unanimous consent of the 25 member states. If any of them reject it, the only option would be to try to negotiate some kind of political “fix.” If a small country were to vote no, the problem would be resolved via a declaration by the heads of state and government amending or “clarifying” the text. This would clear the way for a second referendum and a second chance for the country in question to decide – as with the Maastricht and Nice treaties in Denmark and Ireland respectively. The implications of a failure to ratify by a large member state would depend on which one it was. A French non, according to diplomats in Brussels, would make it inconceivable that the EU would go ahead with the treaty as it stood. A British failure to ratify would not be susceptible to the small country solution. It is highly unlikely that the Conservative party would let the Blair government get away with calling a second referendum on essentially the same text. But the idea that a British failure to ratify would mean the death of the treaty is not compelling. It is important not to underestimate the frustrations generated within the EU by Britain’s historic role as the constraint on integration. While Tony Blair is arguably the most pro-EU prime minister the country has ever had, exasperation with him is as high (if not higher) as it was with his predecessors because he has failed to live up to his rhetoric. If Britain were the only country to vote no, the other member states might attempt to make use of the provision in the treaty for “enhanced co-operation” to implement as much as possible of the treaty as a “core group.” Another option is what some analysts have dubbed an “institutional rupture.” Assuming that 24 member states had ratified the treaty, they would not want to ditch a text which represented the culmination of more than three years’ hard labour. To circumvent the British problem they might consider the creation of an “EU mark 2” – a new, separate organisation parallel to the EU. Those willing to do so would join, while the others would be left in the “rump” EU. Some in the more integrationist member states would look on a British failure to ratify as an opportunity, and would shed few tears if London were joined on the outside by, say, Denmark and one or more of the new entrants, such as Poland. And while the institutional details of any such scheme would require careful thought, there is nothing in legal terms to prevent it happening, so long as the (mark 2) member states remained faithful to their obligations under the existing EU treaties. So not only would it be most paradoxical if Britain were to vote against a treaty that many of our partners see as enshrining a very British vision of the EU – a no vote would also raise serious questions both at home and among our partners about our continued participation as a full member. This alone should be sufficient to prompt a “yes” vote, given that non-membership would impose serious costs. Norway – a member of the European Economic Area and Efta, but not of the EU – pays around half of the British budgetary contribution for the right to participate in a single market over whose rules it has no say. And Britain stands to lose out more than most if it has no say in shaping the legislation dealing with financial and other services now emanating from Brussels. One need only look at the negative effects on consumers and the developing world of the common agricultural policy, set up before Britain joined the EEC, to realise what can occur if we are not present at the negotiating table. Looking to the future, a British withdrawal might leave the fate of Turkey – whose membership is rightly seen by the British government as part of the battle for hearts and minds in the Islamic world – in the hands of a continental Christian Democratic right with deep, and in some cases rather sinister, reservations about Turkish accession. The referendum, therefore, has to be won. This will be no mean feat. A recent Mori poll carried out for the Foreign Policy Centre indicated that only 31 per cent of British voters are in favour of Britain adopting the treaty. This is hardly surprising: similar surveys have consistently revealed the hostility of British public opinion towards the EU. The Eurobarometer poll in the spring, for instance, found that just 30 per cent believe that Britain has benefited from EU membership (although in most polls around 50 per cent continue to favour membership). But the high levels of distrust among the British for European institutions (only 10 per cent said they trusted the EU) must be placed in context. For one thing, the British are notoriously wary of trusting anything (only 19 per cent expressed trust in the British government and 25 per cent in parliament). Moreover, the public opinion data reveals consistently high levels of uncertainty and ignorance, raising the hope that better information might generate more favourable opinions. Indeed, the Mori poll indicated that only 35 per cent of respondents have made up their minds about the treaty. Securing a victory in the referendum will be an uphill struggle, but it is quite possible if the yes campaign is effective. The British vote will only take on real importance if it is preceded by yes votes in all the big states planning to hold a popular vote before ratification. Assuming no other state has rejected the treaty before we come to vote, the timing of the British referendum will be crucial. The prime minister has no intention of acting until after the general election expected next spring. This leaves a relatively narrow window of opportunity. No government wants to hold a popular vote in the dark, cold winter months. And there is a World Cup in June 2006. Participation in such events does not bring out the internationalist streak in the English – the coincidence of the European championships and European parliament elections almost certainly helped the Ukip cause this year. The fact that this competition will be held in Germany makes things worse (where is the Ryder Cup when you need it?). That probably means a vote in April or May 2006. With significant ground to make up and only 18 months to go, defenders of the treaty need to mobilise support as early as possible to prevent further inroads being made by the no camp. Many undecideds are Liberal Democrats or Tories. Persuading them to vote yes could best be achieved by respected members of their own parties. Yet the partisan approach adopted by the government has, so far, stymied attempts to fashion a big tent for the yes campaign. The attractiveness of the Britain in Europe organisation as a campaigning tool is mitigated by what many see as the tendency on the part of ministers to treat it as a branch of the Labour party. Moreover, the manner in which the referendum was announced – as a partisan ploy to prevent the Tories from exploiting the issue – has not endeared Blair even to Tory Europhiles. And his failure to hold a referendum on euro entry, or to deliver on promises to counter anti-EU mythology, have made many natural allies reluctant to put themselves on the line for what they still see as an unnecessary vote. The need for full government engagement is as important as that for cross-party support. The entire cabinet must be clearly behind the yes camp. The appointment of a high-profile, cabinet-level minister for Europe would be a useful step. Crucially, the chancellor must be an active participant in the campaign. Indeed, Blair should try to persuade Gordon Brown to take the lead role in the campaign for ratification. Brown is more trusted than Blair on Europe and it would give him a reason to give it his best shot. Even assuming the timing and the political structures are right, the yes camp faces the question of the best basis on which to run its campaign. Should it be that the treaty does not matter? Or rather, that a no might lead to costly exclusion? There are elements of truth to both these claims. But since its opponents will argue that ratification will mean more integration, which would be bad for Britain, it is imperative that it settles upon a clear, consistent and unambiguous message. This is not an easy task. Campaigning on the contents of the treaty itself will be insufficient – there is not enough in the document to drive a positive campaign. On the other hand, making the vote about membership would be dangerous because of the implications of a rejection. (The yes camp, however, should certainly exploit the huge rift that will surely emerge on the other side between those who are anti-treaty and those who are anti-EU membership.) The optimal strategy would be to fit a positive assessment of the treaty within a supportive argument about the EU’s new pro-British status quo. The case for the treaty is that it codifies a situation that has steadily become more favourable to us. This is a great deal easier said than done in current circumstances. For one thing, Britain is doing relatively well economically, while many of our European partners are not. Co-operation based on perceived weakness is one thing; selling Europe when we are successful is quite another, as Sunder Katwala argued in Prospect (July 2004). Yet the single market provides us with the opportunity not only to export our economic policy preferences to France and Germany, but also, through the economic gains made by the removal of barriers to trade, to gain a larger share of an ever larger pie. Nevertheless, as the EU has become friendlier to British interests in the past decade, Euroscepticism has gained ground. What explains this paradox? It may be partly that Euroscepticism is now about things other than Europe: about the rise of “identity” issues in Britain and the rest of the EU; about the scepticism towards elites of all kinds; and about an anti-political negativity fed by the national media. Selling something as complex as the EU requires a strong narrative with positive associations to the best things in British life. This has always been hard, and it is becoming harder. But to accept that Euroscepticism is now its own justification and that rational argument cannot penetrate its dyspeptic worldview is to concede defeat before battle has been joined. It is also to let the politicians off the hook. Portraying the EU, over a generation, as at best a necessary evil tends merely to reinforce the impression of evil in the minds of the public. Politicians have traditionally managed to have their cake and eat it when it comes to the EU. They appreciate the benefits it provides while conceding to anti-EU sentiment at home by attacking it at every opportunity. How could any elected politician resist the temptation to blame the EU for its failings while taking credit for its successes? The behaviour of Gordon Brown is a case in point. His tendency to deliver patronising lectures to his colleagues in Brussels in the British press before adopting a more conciliatory tone once safely within the confines of the council chamber does little to convince an already sceptical public that the EU serves us well. The yes campaign must, therefore, be based on a frank explanation of the benefits of EU membership and the necessity of its complex institutional structure. Thus, the commission is not simply an unfortunate annoyance foisted on us by foreign federalists. It is an essential part of an institutional system intended to enable states to work together more effectively, and an institution, moreover, that serves British interests well. This is not a message too complicated for the average voter to understand. Sadly, after decades of attacks on “Brussels,” it is one that he or she might struggle, initially, to believe. Ultimately, the task of the yes campaign is to persuade the public that membership of the EU is not a lonely, brave struggle against perfidious partners intent on foisting European federalism upon us. It is, rather, a unique and highly sophisticated attempt to regulate interstate relations. Not only has this attempt been staggeringly successful, it has recently come to benefit Britain disproportionately by favouring British views of public policy – views codified, enshrined and entrenched in the latest revision of the founding treaties. Surely even our government should be capable of selling such a success story?