Europe on the Brink? Economic, Political, and Constitutional Issues

Graham Avery, Honorary Director-General of the European Commission, and Senior Member of St. Antony's College, Oxford
16 Aug 2012
The European Union is going through a difficult period mainly because of the economic and financial crisis from which the world economy is struggling to recover, and because of poor management of the rules for the euro. While one can justifiably criticize the conduct of the EU’s member states, including the United Kingdom, and the EU itself, first in allowing the crisis to develop, and then in dealing with it, I have no doubt that without the EU framework we would be in worse difficulties.
 
As an insider with experience of the workings of the EU, I am sure that its institutions can cope with the stresses and strains now being experienced. The EU will emerge stronger from this crisis, as it has from past crises. The members of the eurozone are determined to remedy some of its design faults, and all member states wish to safeguard Europe’s single market of 500 million. In fact, the crisis is spurring efforts to improve the single market, for example in the field of financial services where we need better regulation. 
 
I will begin by assessing the role of the European Commission. When errors were made in the management of the eurozone – the acceptance of false economic accounts presented by Greece, the transgression of the rules by Germany and France with budget deficits exceeding 3 per cent – then the Commission should have acted more vigorously in its role as guardian of the law. In developing new policies it should be more proactive in the European interest, not act as a secretariat for the member states: but it has suffered from the wish of the bigger member states to impose the intergovernmental model, not only in the field of the euro but also in foreign policy.
 
When errors were made in the management of the eurozone – the acceptance of false economic accounts presented by Greece, the transgression of the rules by Germany and France with budget deficits exceeding 3 per cent – then the Commission should have acted more vigorously in its role as guardian of the law.
 
When errors were made in the management of the eurozone – the acceptance of false economic accounts presented by Greece, the transgression of the rules by Germany and France with budget deficits exceeding 3 per cent – then the Commission should have acted more vigorously in its role as guardian of the law.
 
The economic and financial crisis has restored the Commission’s authority in some ways; even the British government accepts that the Commission has an important role to play in resolving the present crisis. Paradoxically, the more the United Kingdom adopts an off-shore, semi-detached position in the EU, the more it depends on the Commission to defend its interests in the inner councils. The Commission has systematically tried to ensure that the seventeen members of the eurozone do not ignore the interests of the ten non-members, including Britain.
 
My answer to the question posed in the title of this conference – is Europe on the brink? – is ‘certainly no’. Frankly, I am more concerned these days with the question, is the United Kingdom on the brink of Europe? To which my answer is ‘possibly yes’.
 
There has always been a tendency in this country to view the European Union as an economic enterprise – a common market and little more. But the leaders who took Britain into the EU did not think that. Let me quote what Prime Minister Harold Macmillan said to Parliament in 1961 when his government announced its application for membership. He said that membership ‘is a political as well as an economic issue’.
 
Later, in 1971 the then Foreign Secretary, Sir Alec Douglas-Home, said in the House of Commons, ‘On two counts I am in full agreement with the most vocal opponents of our entry into Europe. The first is that our application is a step of the utmost political significance, and the second is that there is a danger of its political importance being overlooked in the public debate on the economic issues’. He also said, ‘It seems to me that the only way to preserve our independence for the future is to join a larger grouping. It may seem paradoxical but I believe it to be true’.
 
These quotations show how from the beginning the approach of British politicians to the EU was not ideological, but pragmatic. Britain’s reasons for joining had nothing to do with sentiment and everything to do with realpolitik. They can be summed up by the maxim ‘if you can’t beat them, join them’.
 
That maxim remains valid today: despite the complications and frustrations of EU membership, there is no good alternative for this country. Some commentators argue that the eurozone will disintegrate, that the EU is in decline, and that Britain should therefore move its focus of attention away from its continental neighbours to wider horizons.
 
Sometimes this analysis is tinged with Schadenfreude: we British enjoy seeing the euro in difficulty, we had the good sense not to join it, let’s hope that it will collapse and then we will be vindicated. It’s reminiscent of British attitudes to the Messina Conference in 1955: ‘we don’t think the common market will work, so let’s not join the Six in creating it’. That proved to be wishful thinking, and an error of judgment on a big scale. A similar risk exists today for those who predict failure for the process of European integration.
 
I did not say ‘there is no alternative’ to EU membership for Britain, because there certainly are alternatives. A European state outside the EU can function very well: the classic examples are Norway and Switzerland.
 
If Britain left the EU, it would need to develop a relationship with the EU, and it is often said that the default mode would be the European Economic Area (EAA). But it is not the policy of the present British government to leave the EU. What it did soon after taking office was to enact a European Union Act with a ‘referendum lock’ that subjects to a national referendum any future transfer of power from the UK to the EU.
 
We could have a long debate here about the use of referendums and their place in the British constitutional system – personally I am against them – but let’s simply note that the British Eurosceptics (in the sense of those who oppose an increase in the powers of the EU) should be largely satisfied with the present state of affairs.
One of the illuminating features of the European debate in this country, and indeed in other European countries, is that although political parties in opposition may take a negative stance on EU affairs, when they come to power they compose rapidly with the realities of international affairs, and cooperate with the European partners. This has certainly been the case for Conservative ministers in the present government: David Cameron and William Hague both affirm that they want Britain to play a full role in the EU, and to remain in it.
 
I can readily accept that they believe what they say, but the problem is that a vocal section of their own party disagrees with them. I am sure that Mr Cameron and Mr Hague really do want to avoid a referendum on any aspect of the EU, whether on the limited question of a change in the Treaties or on the wider question of British membership, yes or no. But what worries me is that they could slide accidentally into a referendum without planning it. The tactical errors and the diplomatic debacle that led up to Mr Cameron’s so-called ‘veto’ on 10 December suggest that in European affairs this government can be accident-prone.
 
I am sure that Cameron and Hague really do want to avoid a referendum, whether on the limited question of a change in the Treaties or on the wider question of British membership. But what worries me is that they could slide accidentally into a referendum without planning it.
 
I am sure that Cameron and Hague really do want to avoid a referendum, whether on the limited question of a change in the Treaties or on the wider question of British membership. But what worries me is that they could slide accidentally into a referendum without planning it.
 
Some commentators see the affair of the ‘veto’ last December as a watershed in Britain’s policy on its place in the European Union, as the beginning of a conscious policy to embrace a formalised multi-tier structure of membership, in which Britain would be in the second or third tier. From what I have heard from insiders about the events that led up to the ‘veto’, it was definitely not planned: it was the unexpected and undesired denouement of a summit that was badly prepared. But nevertheless it casts light on what may happen next.
 
On the one hand, it represented a demonstration by the members of the eurozone, followed by most of the other member states, that for them there is a ‘red line’ in relations with the UK. It is one thing for Britain to act as the ‘reluctant European’ and to refuse to join with them in important projects such as the Schengen zone for free movement of persons, or the eurozone.
 
They will accept, usually with regret, that kind of ‘opting-out’. But if Britain tries to prevent them from doing things together, even without Britain, or asks concessions in return for allowing them to proceed, they will not accept that. Specifically in this case they did not accept Britain’s threat to stop the EU institutions drafting a treaty to be signed by twenty-five members without the British and the Czechs. To put it more simply, the other members said ‘stay out if you want, but you can’t stop us from going ahead’.
 
On the other hand, it demonstrated a reluctance on the part of the British government to bring an important EU matter to the House of Commons for approval, even though it involved no transfer of power from Britain, because of the risk of being asked to obtain concessions in return – concessions such as opt-outs or repatriation of policies which the European partners would surely refuse.
 
This analysis suggests that Britain’s EU policy is uncomfortably situated now between a rock and a hard place. Almost by default, it may encourage the development of a two-tier or three-tier structure of membership in which Britain would be in the outer circle. The member states in the inner circle would develop common action and common policies, on which they would take decisions without Britain being at the table or having a vote.
 
This situation could lead to serious economic and political problems for us. If you are not at the table, then your point of view is not likely to be taken into account; decisions taken without you may not go in the direction that you prefer, and they may even go in a direction that is against your interests. I have heard this expressed more brutally in the following way: ‘if you are not at the table, you will be on the menu’.
 
Britain’s EU policy is uncomfortably situated now between a rock and a hard place. Almost by default, it may encourage the development of a two-tier or three-tier structure of membership in which Britain would be in the outer circle.
 
Britain’s EU policy is uncomfortably situated now between a rock and a hard place. Almost by default, it may encourage the development of a two-tier or three-tier structure of membership in which Britain would be in the outer circle.
 
That is why I think that Britain is now possibly on the brink of Europe. Unless it acts in a more positive and energetic way within the EU, it may relegate itself to a lesser role. The EU is an imperfect, difficult, and frustrating system of organising the European continent, but it’s the best system that we have. It is in Britain’s interest to exploit it, to influence it, and to make it work better.
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Graham Avery is Senior Member of St. Antony’s College, Oxford University, Senior Adviser at the European Policy Centre, Brussels, and Honorary Director-General of the European Commission. 
 
This Opinion Piece originates from a presentation made at a Panel Debate, held at Wolfson College in April 2012, entitled 'Europe on the Brink? Economic, Political, and Constitutional Issues'
 
 

 

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