Britain in Europe part II

Following David Cameron’s speech on 23 Jan 2013, it seems worth reviewing our thoughts within the first article.

It would seem that if the Conservative party is under David Cameron’s leadership, and if they win the next general election in 2015, he has now committed the British people to an in/out referendum on the EU, probably in 2017 or 2018.

This will not be a vote on the single market.

Neither does he actually wish Britain to leave the EU, it is very clear that he would be uncomfortable campaigning for Britain’s exit. Rather, it is recognition of the necessary changes happening in the Euro countries, which will require significant treaty change, which will inevitably change our relationship with Europe as a country outside of the Euro. This treaty change will be an opportunity to make other changes.

It is not clear how he would campaign, if he cannot secure changes in Britain’s relationship, alongside the changes that the Euro countries will be pushing through regardless. This is an issue for all countries within the EU, but outside the Euro currency.

The single market will not change, so there will still be the free movement of goods, services and labour. Britain is an international country, with many people of international origin, and there is no anticipation of any change in those policies.

Usefully, we also know a bit more now on others views.

As predicted, it is clear that the USA would be uncomfortable with any outcome that involved Britain leaving the EU. They would lose a valuable partner within the EU.

As predicted if we did leave the EU, everyone knows that Britain would lose some influence in the world, and have virtually no say over the EU or and would most likely lose influence over the single market.

Our EU partners will not want to be seen to be swayed too much by a country outside the Euro. However they may well see that some of the necessary treaty change required, will not be relevant to those countries outside the Euro.

It does now seem that the only political party that wants the UK out of the EU is UKIP. They have gained some support from traditional Conservative voters, but are unlikely to win a general election – their existence might however stop the Conservatives winning the next election.

Business leaders don’t seem happy with the idea of Britain leaving the EU, or even the talk of it. They are right to say, that it could have a negative impact on big business.

It might also be the case that those same business leaders become pro Euro again once the difficulties around the single currency are dealt with. The pound is still relevant in international terms now, but I doubt that will be the case in 10 years, and the economic advantages of being within the euro, might outweigh the negatives – this was not the case in the past.

It is unclear that there would be any significant economic benefit of leaving the EU. In fact, the negative impacts will most likey dwarf the positive. Cameron’s argument is that the EU needs to be more flexible and competitive, and he can help achieve this more to Britain’s benefit within the EU than outside.

There will be trouble ahead though, regardless.

Some of our EU partners, do not like being flexible, it looks like they see it as being a weakness. Even where it is clear that countries outside the Euro will need a slightly different settlement on EU treaty change, they will probably have to fight for it. And some outside the Euro want to join, so the UK might not get too much help from them either. In fact, it looks likely Germany, Denmark, Holland and Sweden will be the most likely to support British proposals

The British public and papers will demand significant results from whoever is in power. David Cameron may have over promised, as even changes negotiated might not be seen or felt by the people, and under delivery on their expectations may well be his downfall. As for getting significant visible powers back from Europe, I don’t think this is very likely, and quite rightly David Cameron did not specify in his speech those powers he wanted back, he will need to choose his battles very carefully, or risk losing them all.

Thinking back to Ireland, and its own referendum on the Lisbon treaty, they initially rejected it in 2008, and then in 2009 after some further negotiation backed it. It takes time for people to realise what is really to their benefit. The key is individual countries keeping their sovereignty, the EU is however very gradually moving the other way, it probably has to in some ways for the sake of the Euro.

Probably an unpopular prediction for now, but in 20 years Britain will not only still be in the EU, but will also have joined the Euro, after further tax and social integration is completed – when it makes sense. It will have probably also have stopped everything being decided by Brussels though.