Dinner was indigestible last night in Brussels. On the menu for the 28 European Council members: David Cameron’s threat of a Brexit.
The Council closed a particularly arduous 2015 for the European Union, with problems in Greece and Ukraine, terrorism, and an influx of refugees. Now the British Prime Minister has arrived in Brussels ready to fight, vowing to campaign for London’s exist from the European Union if the members refuse his requests.
A British referendum on membership, which Cameron has promised to hold by 2017, could take place as early as 2016. For the E.U., already in serious trouble on several fronts, a Brexit would open a huge crisis, greater than the threat of a Greek departure.
Dramatic reactors from the Council are expected at the next summit in February. To Cameron, this is already a partial defeat — he wanted a response before the end of 2015.
Cameron, who is under pressure from euro-skeptics, has four demands: He wants the E.U. to commit itself to becoming more competitive, he wants Europe’s energy, he calls for different governance between eurozone and non-euro countries, and finally he wants to curb European immigration by imposing a period of at least four years of residence before immigrants can access welfare services.
For London, becoming more competitive begins with reducing regulations on business and with the completion of the integrated market, especially in regards to the free movement of capital. Cameron asks for the integration of the euro area not to be detrimental to the single market. He wants the explicit recognition that the E.U. “has more than one currency,” and that the goal is not to force the integration of all countries to the euro. In fact, Cameron wants to remove from the Preamble of the Treaties that the purpose of European integration is “an ever closer union among the peoples of Europe.”
He’s also demanding a black-and-white statement that taxpayers of non-euro countries will never be solicited for euro operations, though states could contribute if they desire. And above all, in this time of migration crisis, London would exclude E.U. citizens residing in Britain from British welfare benefits for at least four years.
This is the most controversial issue because it contradicts the principle of “free movement of people,” one of the pillars of European integration. The goal is to avoid the so-called “social tourism,” of which especially the citizens of Eastern Europe are suspected, with Poland in the lead (850,000 Poles are living in Britain). Cameron traveled to Warsaw a few days ago, and the meeting with Prime Minister Beata Szydlo was tense.
Yesterday, the President of the European Council, Donald Tusk, pointed out that some of the British demands “seem unacceptable.” German Chancellor Angela Merkel said that “on the one hand, we want to reach an agreement so that the British government can successfully campaign to keep the country in the E.U. in the referendum, but on the other hand, we do not question the fundamental achievements of European integration.” French President François Hollande stressed that the eurozone “principles do not change.”
The referendum on membership of the E.U. is the latest act in the history of an ambiguous relationship London has had with Brussels since 1973, the year of adhesion. In 1975 there was a first referendum, held by the Labour government, which ended with 67 percent in favor of accession to the E.U., but with concessions on the budget.
Then, Margaret Thatcher obtained in ‘84 the “rebate,” a discount on British contributions to the E.U. budget followed by the “opt-out” clauses: The U.K. remains out of the euro and the Schengen Area; it keeps its control over immigration, asylum and security; it is out of the Common Foreign and Security Policy; and it can block banking regulation issued in the eurozone if it considers them damaging the interests of London.
But right now, it is London that should be most concerned about a possible Brexit for the risks of losing financial prominence and untold numbers of jobs.