Europe: Will Cameron put national interest before ideological prejudice?

Cameron's call for a 'more open' Europe is contradicted by demands for special treatment for the UK


Today marks the 40th anniversary of the Europe referendum in Britain. The intervening decades have seen radical change in the European Union.

Those who today have pushed hardest for another referendum on our membership argue that the EU is ‘no longer the free trade area we voted to join’. They want a ‘reformed’ EU, British membership of which is confined to the limited purposes of ‘trade and cooperation’. They are searching for the wrong answers to the wrong questions, based on a false analysis of Europe’s central problems.

The founders’ aim from the outset was always political integration and ever-closer union. At one level this integrationist dream has come truer than anyone would have thought possible in 1975. A Europe, virtually ‘whole and free’ stretches from Ireland to Cyprus on one axis and from Malta to Finland on another. Enlargement has embraced the once fascist dictatorships of the south and the former communist tyrannies of the east.

It has bound its 450 million people together in what is still the richest single market in the world.  As the World Bank put it in its 2012 ‘Golden Growth’ report on Europe’s economy, the single market did once prove to be a remarkable convergence machine by which the wealth of more prosperous regions in Northern Europe spread out to the poorer south, and then to the east.

While this convergence machine still appears to be in good order for Poland and its immediate neighbours, the ‘double whammy’ of the financial crisis and the eurozone crisis appears to have permanently damaged its engine.

The reality today is one of structural divergence which threatens to pull the continent apart. Europe is increasingly a continent of division between north and south: growth versus stagnation; rising real incomes versus falling real incomes; strong jobs growth versus markedly higher unemployment.

In the wake of the crisis, Europe is increasingly seen as a continent divided between creditor countries who dictate – such as Germany – and debtors countries who are forced to obey – such as the southern Mediterranean states.The depth of the faultline is clearly unsustainable and poses major questions about the future viability of the European project. What has gone wrong?

As a result of the single market, Europe has undergone its own mini-globalisation which has increased the structural tensions between ‘winners’ and ‘losers’, both within societies and between member states.

Jacques Delors always recognised that single market integration would only secure lasting political support if it was accompanied by flanking measures of social, environmental and consumer regulation as well as transfers to the weaker regions through enlarged structural funds.

His vision of a liberalised ‘social market’ was thwarted by business opposition, particularly vigorous in the UK to Social Europe, and member state reluctance, often in defence of vested interests, to pool sovereignty on matters such as financial regulation, energy and business tax.

Delors was also right to press for the single currency as the logical extension of a borderless single market, where exchange rate stability would become impossible to secure when national capital controls were abolished.

But the euro fell far short of the genuine economic and monetary union once envisaged by its 1970s advocates such as Robert Marjolin, Donald McDougall and Roy Jenkins. A flawed monetary union was set up without proper mechanisms of fiscal coordination or banking regulation, dependent for its viability on textbook theories of wage and price flexibility far removed from the institutional realities of many of the member states allowed to join.

Today’s social reality is one of huge and growing divergence. This is fuelling a belief, particularly in the countries which founded the European Union, that the nation-specific values and interests that drove European progress in the immediate aftermath of the second world war now need be protected by increasing dis-integration.

This sentiment has been ruthlessly exploited, especially by rightwing populist parties, which have grown in strength across northern Europe. There is little room in this world-view for European solidarity underpinning the free movement principles of the EU’s founding treaties.

The emerging divide within Europe risks becoming a time bomb that threatens the stability of EU and its future political cohesion. It could provoke electorates to support policies that at best threaten the EU while, at worst, revive the continent’s worst memories of political extremism and intolerance.

The challenge is to defuse this ticking timebomb with policies that promote broad-based, Europe-wide improvements in growth, incomes and jobs.

This is the wider context in which the question of future British membership will be resolved. Having made a referendum pledge to appease Eurosceptic elements in his own party, Cameron is risking a Brexit with unpredictable and potentially grave consequences for the UK’s future.

If Brexit were to be Cameron’s legacy, he would be set apart from every Conservative prime minister since Macmillan, who ultimately fought to put the national interest before the ideological prejudices of their own parties.

In his 2013 Bloomberg speech, Cameron’s most considered contribution on the European debate, the prime minister called for ‘a more flexible, a more adaptable, and a more open Europe’. In principle these are admirable goals and there is little doubt that with goodwill, a reform agenda can be agreed that curbs unnecessary bureaucracy and regulation and gives a greater say to national parliaments.

But in practice, his language is code for a more free-market and liberalised Europe, without social and other safeguards, which risks driving further economic and social divergence. His call for a ‘more open’ Europe is contradicted by demands for special treatment on migration for the UK on the EU’s founding principles of free movement, which were they to be conceded, would be a political gift to the National Front in France and rightwing populists elsewhere.

The reality is that David Cameron’s case for remaining in the EU is quite different to the progressive case for why the UK should remain at Europe’s core. Progressives have to fight for a Europe which ensures the continent can grow together, rather than apart.

There has to be a positive centre-left agenda which seeks to expand Jean-Claude Juncker’s €300bn investment plan, mandates minimum wages and protection against low-wage exploitation across Europe, reforms the EU budget to promote growth-enhancing policies for research and innovation, and a migration policy approach that strengthens Europe’s common borders.

Europe has to be seen as a bulwark against the insecurity and inequality unleashed by globalisation, rather than a further means of advancing globalisation at the expense of ordinary citizens.

Roger Liddle is chair of Policy Network. Patrick Diamond is vice-chair and researcher director at Policy Network. They are co-authors of Policy Network’s forthcoming book ‘The Social Reality of Europe after the Crisis’

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