Wednesday, 13 February 2013

Britain and the EU: what future?

"The European Union that emerges from the Eurozone crisis is going to be a very different body. It will be transformed perhaps beyond recognition by the measures needed to save the Eurozone." – David Cameron

The speech by the British prime minister, David Cameron, on the future of Europe is of great importance for all who are interested in future developments in the European Union (EU). He presents not only the British position, but also gives important clues regarding the future direction that the union will take. In this essay, I discuss Britain's relationship with Europe, the possibility of Britain leaving the union, the new structure of the EU that will probably evolve over the next few years through treaty changes, and what the EU of the distant future would look like. And how Turkey and the Muslim democracies of the Arab world will eventually be included.

An important new phase has started in the long process of constructing the European Union (EU). A process that could totally alter the form of the union as we know it today. This new phase is already long in the making, but the speech of the British prime minister, David Cameron, on 23 January 2013 has officially opened this new discussion on the future of Europe – a discussion that will lead to treaty changes and a total restructuring of the EU. Cameron wants "a better deal for Britain", and "a better deal for Europe too". The question is: What will this new Europe look like? In this essay, I make some proposals in this regard.

Britain and Europe

When one read David Cameron's speech, it is clear that Britain's involvement with Europe was, is, and will probably always be, very ambivalent. On the one hand Britain shares a long history with Europe, but on the other hand, it views itself as an "island" off the coast of Europe. This basic observation, namely that island states and continental states view geopolitics very differently, lies at the heart of its ambivalent relationship with Europe. Island nations like Britain (and Venice or Tyre before it) has become influential through trade – and to this day Britain is primarily a trading nation. Continental states traditionally became influential when they gained control over the surrounding areas with its resources and access routes – which requires political unification.

In Europe, this conflict of interest – with Britain trying to stop continental states like (Napoleonic) France or (Nazi) Germany from becoming too influential and thereby endangering her own commercial interests; with the continental states trying to form alliances or consolidate power in opposition to Britain – has lead to many European wars. And Britain knew how to play these continental powers against each other to further her own interests (see my article Predicting a war against Iran? - an inquiry into war and peace cycles). But after the last great war, the main continental states decided to build a Europe of peace – a Europe that will be united politically and therefore never be able to fight each other again. And they (especially general De Gaulle) originally tried to keep Britain out of the union – because they knew that Britain would try to sabotage the whole project. But Britain saw both a threat and an opportunity in this – the threat of an opposing power rising next door and the opportunity of a great market for trade. The result was that Britain eventually joined the union - but only after the process of unification was irreversible.

Britain, a country with a proud history – and without the motivation of European powers like Germany and France to unite – always had a problem to surrender sovereignty. And the closer the union grew, the more Britain became uncomfortable with the goal of an "ever closer union among the peoples of Europe" as is stated in most treaties since the Treaty of Rome in 1957 (which established the European Economic Community). With the Lisbon Treaty of 2007 (in force since 2009), which gave the union a legal identity, increased the power of the European Parliament, established a President of the European Council and a High Representative of the Union for Foreign Affairs and Security Policy, Britain has reached the limit of its willingness to surrender sovereignty to Brussels. In fact, she wants to take some of those powers back. And maybe even leave.

Will Britain leave the union?

It is clear from Cameron's speech that he does not want Britain to leave the union. He said: "I believe that Britain should want to remain in the EU". Although there are many voices – especially from the United Kingdom Independent Party (UKIP) – that want Britain to leave, this is unlikely to happen. Why? For the same reasons that Britain has joined the union in the first place. It is not in Britain's strategic interest to leave the union altogether. Such a move would leave Britain adrift on the large and dangerous sea of international politics – and result in it becoming a second Venice. Nice to visit – but without any political power.

The reasons for Britain to stay in the European Union are straightforward and Cameron has mentioned them in his speech. First of all, it gives the Anglo-American establishment some influence in the future process of development in the union. Britain, with its special relationship with the USA, is effectively the voice of those interests in the EU. One of the greatest fears in these circles is that the EU would develop into a political block which is independent – and even in opposition – to the USA. This is a real fear – some French voices (in the Gaullist tradition) have proposed working towards a multi-polar world in which the USA's power will be effectively restricted. Britain's involvement as a major player in Europe serves as an effective hedge against any future developments in this direction. Without Britain in the EU, it is even possible that the Anglo-American alliance can unravel because the USA might not see the use of it any more. Direct alliances with the EU would be better.

The second reason is that the City of London – the heart of Britain's commercial power – provides access to the European Market. Many businesses and countries outside the union use the City of London as a springboard into Europe. David Cameron mentioned that "Britain has been the destination of one in five of all inward investment into Europe" since 2004. If Britain does not have influence in the union – even if she still have access to the market in a way similar to Switzerland or Norway (who have "no say at all in the setting of rules; it just have to implement its directives") – the whole strategic position of the City would be undermined. Outsiders (Britain would be one of them) would rather use other channels in the EU to facilitate their interests. When the City loses its influence, Britain will lose her's too. So, although Cameron has promised an in-out referendum for 2017 if he is re-elected, the chance of Britain actually leaving the union is very slim. There are powerful interest groups that will do everything to stop that from happening. With a new arrangement on the table, voters will probably choose to stay put.

Building a new Europe

The real fear of the Anglo-Americans is that the measures that the Eurozone countries have taken to overcome the financial crisis will eventually result in a two-speed Europe (it actually already has), with a strong group of European countries (which will not include Britain) gaining political cohesion, leaving the others behind. That countries like Britain, who is outside the core, will have much less influence in the union; that they will not be able to stop the rest from taking decisions that could in principle be harmful to British interests. Cameron tried previously in 2011 to veto the Fiscal Compact, but the Eurozone countries and other countries who joined them, bypassed his veto by agreeing to an inter-governmental treaty, i.e. outside the EU (although compatible with EU law). Since the financial crisis all talk has centred around the Eurozone - this after more than 50 years during which it centred around the EU (and the European Economic Community).

With his speech, David Cameron is trying to influence the process of change in Europe while he is still in a strong position. The Eurozone countries have so far tried to integrate aspects of their economies without EU treaty changes – but eventually, they will need some changes. And this is the opportunity that Cameron wants to use to negotiate a better deal for Britain. What Cameron proposes, is that the "core of the European Union must be, as it is now, the Single Market". The Single Market – with Britain at its heart, must be the foundation of Europe. Upon this structure could all the various diverse structures of the union be built: "We need a structure that can accommodate the diversity of its members... some of whom are contemplating much closer economic and political integration". He mentioned the Schengen group of nations which excludes Britain but includes even some outside countries like Switzerland, Norway, Lichtenstein and Iceland. He also mentioned the military alliance between Britain and France, both countries who are "willing and able to take action in Libya or Mali". His proposal is not too different from that of Tony Blair, a previous British prime minister, who proposed a community of European "clubs".

What Cameron does not want, is a "two-speed" Europe. But it is too late to stop this from happening. The European Union has effectively developed into two groups of countries, namely those who are part of the union but do not participate in the Euro, and those who do. The Eurozone countries form a core group of countries which are integrating their economies more and more – working towards a full monetary, fiscal, banking and economic union. With the introduction of the Euro, the monetary union became a reality. And now, during the financial crisis, important steps were taken towards a fiscal union (with the Fiscal Compact), banking union (agreement was reached in December 2012) and economic union (this year will probably see some steps to equalize economic policy). The EU is beginning to look like the "core Europe" as proposed by Wolfgang Schäuble and Karl Lamers in 1994.

So, there are two proposals as to where the "core" should be. The Germans and French want to see a core group of countries which move towards full economic and, eventually, political union. The British want the Single Market to be the "core", as Cameron said in his speech: "At the core of the European Union must be, as it is now, the Single Market". So where will the core be? Cameron actually made another interesting remark, namely that the Single Market should be the "foundation" of the European Union: "Let's start with this proposition: we are a family of democratic nations, all members of one European Union, whose essential foundation is the Single Market rather than the single currency". He proposes that the Single Market be the foundation upon which all the European clubs are built – even the Eurozone. In a future compromise, it is possible that we will indeed see the Single Market (which the Germans also strongly endorse) being established as the foundation upon which the central core of Eurozone countries, and later the political union, is built.

Pieter Bruegel's tower?

The main problem that the Europeans have with Cameron's proposal, is that he wants Britain to stay in the union, but with some powers that have previously been transferred to Brussels, returned to London (they don't like the idea of "cherry picking"). This implies that he wants to create another grouping in the union (if other countries were to join Britain in this regard) which would be even less integrated with the union than those European Union countries who are not part of the Eurozone! This means that we will have countries like Britain who are part of the European Union, part of the Single Market, but at a lower level of integration than the present European Union countries which have not yet joined the Eurozone. 

If this level represents those countries who are only interested in joining the basic Single Market (and not the rest of the EU structure), then we can envision a future EU structure where this serves as the foundation upon which all the other levels of integration within the union are built - each upon the other. This means that the various layers will build upon each other like that of a ziggurat or step pyramid. Such a structure will correspond to some degree with the proposal that the union should become a "concentric circles Europe", with some countries at the periphery, others somewhere in the middle and a core group of countries at the center (as proposed by Michael Mertes and Norbert J. Prill, advisers to German Chancellor Helmut Kohl). This reminds one of a painting by Pieter Breugel of the tower of Babylon (painted in 1563) which have been used on an EU poster in the period when there were 12 countries in the union (1986-1993) (these were represented with twelve stars – of which only eleven were visible – in the sky above the tower). There is, interesting enough, a Brussels-based think tank named after the painter! The British idea of clubs would ensure that these layers are interconnected in various ways, like structures within this larger pyramid.

Such an EU structure could be built through negotiation between the core and the periphery – between the continental countries and Britain. Since Britain's inclusion in the union an unspoken rule has regulated her relation with the other EU partners, namely that for every step of "widening" (enlargement of the Single Market), there would be an equivalent step of "deepening" the union (with growing political cohesion). The best example of this is the enlargement of 2004 when 10 new countries (mainly from Eastern Europe) joined the union, which was followed with a considerable deepening of the union through the Lisbon Treaty in 2009 (after years of difficult negotiations).

But this process has reached its limits – Britain does not want to participate in any further deepening of the union. I propose that the rule will in future be applied in a different way: for every step to deepen the union (allowing a core group of countries to move towards economic and political union), an equivalent step of widening the union through enlargement, i.e. of adding more countries to the Single Market (as the "foundation" of the union), would follow. In this way, the deepening of the core will go hand in hand with a widening of the base. Once Britain takes a step backwards from its present arrangement with the union, many other countries (still outside the union) could in principle join her to become part of the European Union on that basic level.

Such a European structure will solve another problem – how to accommodate Muslim countries like Turkey in the union. Although Turkey's application for membership has been accepted, there are many countries (especially France) who do not want Turkey in the union. The reason is simple: if a large country like Turkey joins the union, the whole balance of power in the union would change. Suddenly France and Germany will not have the prominent position they always had (Turkey would have more votes in the union than any of them); Britain's position will be considerably strengthened because Turkey's interests will align for the most part with hers (Turkey will obviously not be part of the core). But a new arrangement that allows such countries to enter the union without upsetting the balance of power in Europe – maybe their voting power will be restricted to issues regarding the Single Market – would allow them to join. For Turkey it is important not to have an inferior position in the EU; in this scenario, Turkey will be on the same level as Britain.

Under such circumstances, it is possible to envision many of the other countries surrounding the European Union joining it over time. Not only countries like Turkey and Ukraine, but many of the countries of the Arab Spring could one day join the EU. In the same way that the Eastern European democracies joined the union, one can envision the Arab democracies joining. And in the same way that the union was dramatically deepened through the Lisbon Treaty, one can envision a dramatic deepening of the core – proceeding eventually to form a real political union. Although this basic structure could become visible in the next decade, the above-mentioned things will not happen so soon – for the next few years, it is mostly Balkan countries that will join the union. All of this will change Europe into an enormously important player on the world stage. With the financial crisis of 2007-2012 forgotten, the restructured economies of Europe growing strong, and the new Europe taking shape, the world will be a very different place from today.


David Cameron's speech is an introduction to the discussion on the future structure of the European Union. Although this is but a small step, it is the beginning of a new phase in Europe – a phase that could eventually see a totally new Europe being born. As he said, the problems in the Eurozone are driving fundamental change in Europe. And "at some stage in the next few years, the EU will need to agree on treaty change to make the changes needed for the long-term future of the Euro". Britain still has a lot of influence in the union – she even has a veto right in various areas. She is in the position to make proposals, especially regarding her future role in Europe. Although some EU countries are sceptical about her commitment to the union (in which they are right), she is in fact very committed to the Single Market. Britain does not want the changes in the Eurozone to restrict her access to that market.

The structure that Cameron proposes, one which includes various clubs built on the foundation of the Single Market, will not be realized. The rest of Europe is moving in the direction of a "core Europe"; for many of the continental states (Germany excluded), the market is not of special concern. But some compromise will eventually be reached between the "Europe of clubs" and the "concentric circles Europe". David Cameron is right in saying that "the European Union that emerges from the Eurozone crisis is going to be a very different body... transformed perhaps beyond recognition by the measures needed to save the Eurozone".

What I propose in this essay is that the structure of the future European Union will look a lot like the ziggurat in Pieter Bruegel's painting. There will be various levels of integration, all built on the "foundation" of the Single Market. These levels will include various countries which are willing to integrate only up to a certain level. In the centre will be a core group of countries which will proceed to form a true political union. Most countries in the geographical area of the old Roman Empire will be included in this structure – it could easily become some sort of new Roman Empire. But that is very far in the future. None of our generation will live to see it. But the slow process of forming an "ever closer union among the peoples of Europe" will continue for generations to come. 

Author: Dr Willie Mc Loud (Ref.

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