The UK in the EU: The Pitfalls of Renegotiating Membership

There is a real risk that the Conservative Party’s plan for a renegotiation of UK membership terms in the EU, followed by an in/out referendum, will damage both the EU itself, as well as British interests. This becomes clear when one examines the issues that might arise in the renegotiation.

In particular, the terms the UK might get if its voters decide to withdraw from the EU, could be quite damaging. Such an exit by referendum is, moreover, made more likely by attempting renegotiation because the results of such talks will not match the expectations created.

In fact, it may prove easier for the UK to negotiate terms for its withdrawal from the EU, which only requires a majority in the EU Council, than it would be to negotiate a change in the treaties to suit UK interests. A treaty amendment requires unanimity among all 28 EU states.

This sequence of events could occur after the UK’s 2015 General Election. If it does not happen then, it could occur after any subsequent General Election, unless or until the Conservative Party changes its policy.

EU paralysis

This outcome could also be precipitated if the EU itself chose to revise its treaties. A treaty revision would require the consent of the UK. Any UK government will be under pressure to use that treaty negotiation to press the UK’s renegotiation agenda.

This is partly why many EU leaders are unwilling to attempt any further treaty change. Thus, internal UK politics is already a paralyzing force in EU politics.

EU leaders have taken a vow of silence on the internal UK referendum/renegotiation debate, even though it is one in which their own electorates have a vital interest. They do not want to aggravate UK public opinion, which might claim to resent “foreign” intervention in what would be construed, inaccurately, as a purely “domestic” UK matter.

In fact, EU countries are already so integrated with one another that almost anything the UK might ask for is a domestic issue for all members.

The downside of this hesitation on the part of other EU leaders to speak up is that UK public and media opinion may develop unrealistic expectations of what it could achieve in a renegotiation. The disappointment could lead to an increase in support for outright withdrawal.

Corroding the EU in its wake

Even if the UK leaves the EU, it will remain important for the UK that its largest trading partner, the EU, is able to function in a decisive fashion. Some likely UK negotiating demands go in the opposite direction.

The UK needs to take account of opinion in other EU states because the consent of a majority of the other EU states will be needed if

• a renegotiation is to be concluded to the satisfaction of the UK, or
• if the UK outside the EU is to enjoy continuing privileged access to the EU Single Market (for example for financial services), over and above those available to all WTO members.

Neither of these can be taken for granted. All EU states have national agendas, and frequently fail to compromise when they should.

The precedent of an EU member state looking for preferential terms, on the basis of a threat of withdrawal, could corrode mutual confidence among the remaining 27 members. One has the sense that some in the UK do not care about this, while others have not thought about it. A further group would actually be happy if the whole process tore the EU apart.

My own sense is that, whether continuing as a member or not, the UK does have an interest in the EU remaining effective. An effective EU keeps Europe at peace, and of creates a single open market that is good for British trade. Britain would not sell as much in a Europe that had reverted to 27 different markets, with 27 different currencies.

An EU, that cannot make decisions because it was paralyzed by fear about who might be next to follow the UK out the door would not be good for Britain.

Destabilizing proposals

Furthermore, some of the likely UK proposals in a renegotiation would undermine the effectiveness and stability of the EU in an even more direct way.

One such proposal is a so called “Red Card”, whereby a minority of national parliaments could veto an EU law, even though that law

• had already been passed by majority in both the Council of Ministers, where all states, including the UK, would have had a vote, and
• has been passed by a majority in the European Parliament, where all states including the UK have directly elected MEPs.

This idea of a Red Card has won support from the British Foreign Secretary and even from some in the Labour Party.

However, nobody can deny that this “Red Card” would paralyse EU decision making. It could be used by others to block the very measures that the UK itself wants, like the liberalization of the EU Services market.

The Fresh Start Group of 100 Conservative MPs has gone further yet. It said that an unspecified group of national parliaments should be able to repeal existing EU laws, bypassing the European Parliament and the EUs existing decision making structures.

A provision whereby shifting majorities among national parliaments could by pass the EU’s democratic decision making procedures, and unilaterally repeal settled EU laws and agreements, would undermine the stability of the EU Single Market.

Reopening old problems

It would become an instrument for reopening the long settled compromises on which the EU Single Market is based, making them subject populist pressures on an ongoing basis.

Both of these proposals would require a treaty change, because the role of national parliaments in the EU process is defined in a protocol to the existing treaties. In the EU, a protocol has the same legal status as a Treaty article. To change the protocol in question, every one of the 28 member states and the European Parliament would then have to agree.

Another likely UK renegotiation demand would be to opt out of having the European Court of Justice as the final adjudicator on disputes concerning the meaning of EU agreements on the fight against crime.

The UK is likely to demand that these issues be adjudicated instead in national courts, which could mean 28 different interpretations. That would yield many new loopholes through which well advised criminals could evade justice.

Negotiating the exit

If the UK electorate is not satisfied with the terms offered to keep the UK in the EU, and votes that the UK should withdraw from the EU, a new negotiation would start. This would decide the terms on which the UK, outside the EU, would have access to the EU for its people, goods and services. This second negotiation would have to be concluded within two years.

It would be conducted under Article 50 of the EU Treaty. That provision requires a qualified majority in the European Council and a majority in the European Parliament to agree to the terms to be granted to a country withdrawing from the EU.

It is likely that such terms would include a continuing financial contribution to the EU budget, in return for UK access to the EU Single Market.

But if no agreement is reached within the two-year deadline, the UK would be out of the EU. It would also automatically be subject to the appropriate restrictions and tariffs on its exports to EU countries of goods and services. Customs posts would have to be reintroduced on the border in Ireland and at cross-channel ports.

Furthermore, if the UK, then outside the EU, wanted to restrict immigration from the EU, it would have to introduce passport controls on the Irish border, a measure that would undermine the work done to promote peace and reconciliation.

These would, of course, be an entirely unintended consequence of the UK Conservative Party’s proposed renegotiation/referendum tactic. But the unintended often happens in politics, and initiatives can get out of the control of their initiator.