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Analysis
Consequences of a non-settlement

Consequences of a non-settlement

Prime minister's miscalculations in EU strategy

by David Marsh in London

Wed 1 Jun 2016

The European Union’s sorry state of paralysis is summed up in a tale of two speeches, three years apart. The chronicle provides ammunition for both sides in the UK’s in-out debate ahead of the 23 June EU referendum.

In a 40-minute address to the Bloomberg media group in January 2013 setting down the framework for a possible plebiscite, David Cameron mentioned no less than seven times hopes for an EU ’settlement’ to improve the bloc’s cohesiveness. In a speech of similar length at the British Museum on 9 May, how many times did the UK prime minister utter the word ’settlement’? Not once.

In his EU strategy, Cameron has made two key miscalculations. The first – less forgivable, in view of prior knowledge of the Conservatives’ predilection for knifing themselves in the back – was his belief that the referendum ploy would heal divisions within his party instead of, as is now apparent, inflaming them.

The other, more excusable, was Cameron’s assumption in 2013 that, by now, Europe would have taken firm steps towards becoming a more integrated political and economic community to meet its longer-term needs, above all in holding together monetary union.

Britain, for its part, he foresaw in 2013, would be able to negotiate flexible arrangements in keeping with UK desire to retain control over key decision-making on security and economics.

The depressing reality is that, in the intervening 36 months, in nearly all important areas, Europe has made practically no progress in preparing a better long-term basis – beyond taking further steps to implement already overdue plans for ’banking union’.

Thoroughgoing treaty change on which the French and Germans can agree is still years away – and may never happen. Brexiteers say the disarray shows the EU is unreformable. Pro-EU campaigners can point out, somewhat half-heartedly, that at least it demonstrates the unrealisablity of a European 'superstate'.

Europe’s stasis is symbolised by the inconclusive 24 May finance ministers’ accord on Greece. This allows Athens sufficient liquidity to make essential repayments this summer, but postpones until the end of the year (and probably until after next year’s French and German elections) key decisions on restructuring debts. Crucially, the International Monetary Fund will not decide until end-2016 whether to take part in the latest bail-out – although this merely postpones vital questions on whether and how Greek creditors will provide longer-term support.

The challenges confronting the EU – over migration, defence, social security, jobs, investment, education, growth and money – have increased in inverse proportion to its ability to resolve them. 

Cameron in January 2013 said the EU’s ’main, overriding purpose’ was ’not to win peace, but to secure prosperity’. He foresaw ’a new settlement subject to the democratic legitimacy and accountability of national parliaments where member states combine in flexible co-operation, respecting national differences, not always trying to eliminate them.’

On 9 May, Cameron offered no hint of any forthcoming positive changes, emphasising far more the security, defence and economic risks of upsetting the status quo.

The migration crisis and tensions over Russia and the Middle East have inevitably darkened the backcloth. In January 2013 Cameron mentioned ’security’ twice and ’war’ three times; in his May 2016 address there were 20 references to ’security’ and six to ’war’.

In both speeches, Cameron brought up Commonwealth war cemeteries and the hundreds of thousands of British servicemen who died in two world wars. So Europe in 2016 offers a chance, perhaps, of averting some undefined tragedy, but very little hope of a better future. Hardly surprisingly, the vote is finely poised.

David Marsh is Managing Director of OMFIF. This is No.77 in the series – the 100th article will appear on 23 June.

OMFIF’s series on the UK EU referendum presents a wide variety of perspectives from Britain and around the world ahead of the 23 June poll. We are assuring a balance between many different points of view, in line with OMFIF’s overall neutral stance on the issue.

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