Why Cameron's timing on EU reform is off

Why Cameron's timing on EU reform is off

Rem Korteweg
26 March 2014

British prime minister David Cameron is in a tight spot on EU reform. He must balance calls by eurosceptics in his Conservative Party to repatriate powers from Brussels, and the political reality in Europe that favours less far-reaching change. Cameron hopes to start renegotiating the terms of British EU membership after the 2015 election and believes Germany and the Netherlands will support him in this endeavour. But their plans and timetables do not match his.

Across the Union the debate about reform is gathering momentum. It has reached EU foreign ministers at General Affairs Council meetings in November 2013 and March of this year. Cameron has said that he wants to reform the EU, and renegotiate the UK’s relationship with it, before an in/out referendum in 2017. But instead of leading the debate, Cameron has been holding his cards close to his chest. It is an unwise strategy that threatens to leave him empty-handed.

His wish list for reform is unclear and Europe’s leaders are left to guess which changes Cameron wants. In an op-ed published in The Telegraph on March 15th 2014, Cameron said he does not want to “lay all Britain’s cards on the table”. This reflects the difficult position he is in. No proposal for EU reform acceptable to his European colleagues will be enough to appease the eurosceptics in his own party. Besides, his government cannot reach a common position because his coalition partners, the Liberal Democrats, disagree strongly with his ‘renegotiation and referendum’ strategy. Instead, he wants to wait until after the 2015 general election before discussing reform in earnest. But his caution is making potential European allies impatient.

Cameron has mentioned few practical steps to improve the Union; in general he thinks powers should flow back and forth between the national and European levels and he wants to remove the words “ever-closer union” from the EU treaties. But beyond this, there have mostly been vague promises of repatriation and reforms (for instance, about restricting benefits to migrants and cutting red tape) in the event of treaty change. The latter is particularly problematic for other member-states. Some European governments, like the Netherlands or France, may favour changes to the EU treaties in theory, but they dread the mechanics it involves; a potentially long-winded intergovernmental conference which would require referendums that increasingly eurosceptic populations might not support. Or, like Germany, they see treaty change as a long-term endeavour, not a short-term issue.

Cameron however, needs allies if he hopes to get the change in Brussels he wants. In his op-ed, Cameron pointed to the leaders of the Netherlands and Germany as his fellow travellers for EU reform. Downing Street has been flirting with The Hague and Berlin for some time. In February, Cameron rolled out the ‘reddest of red carpets’ for German Chancellor Angela Merkel, inviting her to address the Houses of Parliament. That same month, Dutch prime minister Mark Rutte sat down for an ‘informal dinner’ at Chequers to talk about EU reform.

But instead of opening up the treaties and repatriating powers, The Hague and Berlin are thinking differently. Their focus has shifted to reform initiatives that do not require cumbersome treaty change. And their views are gaining traction across Europe.

Central to their thinking is strengthening subsidiarity. This concept – enshrined in the Treaty on European Union – holds that the Union should act only when doing so achieves better outcomes than member-states acting separately at the national level. Subsidiarity is not an instrument for repatriation, since it accepts the division of competences, but where the treaties are ambiguous it does allow greater flexibility in deciding where powers lie, and it is a check on an overly ambitious Commission.

Subsidiarity will not be a panacea for the Union’s problems, but lifting the concept out of its technical and legalistic environment, and onto the highest political platform, would be helpful. For too long subsidiarity – an important but ill-defined concept – has been allowed to shelter in the dark recesses of the EU treaties. Putting subsidiarity into practice means paying more political attention to it.

In an op-ed in Handelsblatt on March 18th 2014, Germany’s foreign minister Frank-Walter Steinmeier and Dutch foreign minister Frans Timmermans called for an EU that is more selective in the issues it tackles, saying it “should be big on big issues and small on small issues.” Stronger enforcement of subsidiarity, they say, would cull unnecessary initiatives from the Commission and reduce the EU’s democratic deficit since national parliaments would become more involved: better use of ‘yellow card’ procedures would allow European parliaments to co-operate and block Commission initiatives they deem unnecessary or inappropriate. The two ministers continue that if Commissioners were to work in clusters, rather than pursuing 28 separate dossiers, the EU would be more focused and effective, and increase its legitimacy with the European public. (The CER made similar suggestions in ‘How to build a modern European Union’, October 2013.)

Among the few things Cameron has spelt out that he wants are a stronger role for national parliaments and better enforcement of subsidiarity. So he is giving intellectual support to the Dutch-German idea. It also resonates with Finland, Sweden and France. (Some of these countries, like France, may prefer treaty change in the long run – for instance to strengthen eurozone governance – but realise this is currently not politically feasible.) An added benefit of the Dutch-German plan is that it can be done within the existing treaties; it would require a political deal.

In her speech at Westminster, Angela Merkel referred to such a deal when she said “more attention needs to be paid to the subsidiarity principle in Europe. [European governments] should set priorities for the future Commission’s work.” Indeed, a political agreement between the European governments, the European Parliament and the Commission could set the agenda for a more focused Commission – outlining the areas where the Commission would, and would not legislate – underline the centrality of subsidiarity and support stronger involvement of national parliaments.

When could such a deal be reached, since the European Council, the European Parliament and the Commission must all be involved? Germany and the Netherlands foresee a window of opportunity between the election of the new European Parliament on May 22nd, and when the new Commission takes office in the second half of 2014. Only then, they believe, will the new European institutions be receptive to a political ‘gentlemen’s agreement’. There is no point in making a deal with the current lame-duck Commission or the outgoing Parliament, and it makes little sense to strike a deal after the next Commission has already started proposing EU policies.

This suggested timing will cause problems for Cameron, who hopes to keep his powder dry until after the UK general election in May 2015. He would have to support a political agreement that reined in the Commission and strengthened subsidiarity – because he agrees with the need to do both – particularly if the initiative came from his allies in Berlin and The Hague. But if a deal is done in late 2014, and then in May 2015 Cameron wins a majority without the Liberal Democrats and embarks on his renegotiation strategy, momentum for reform among his European colleagues will have dissipated. This would cause a major headache for Cameron who has been betting that he does not have to seriously discuss renegotiation or reform until next year.

Instead, Cameron should make his objectives on EU reform clear; embrace the prospect of reform by political agreement – rather than treaty change; and start contributing to the European debate with a British subsidiarity agenda, for which the government’s balance of competences review could provide the basis. If the moment passes him by, other prospects for reform may become increasingly unlikely.

Rem Korteweg is a senior research fellow at the Centre for European Reform.