Thomas Raines
Research Fellow and Programme Manager, Europe Programme
The deal outlined Tuesday is probably as good as the prime minister could have hoped for, and should give him useful arguments to use with voters and wavering MPs.
David Cameron shakes hands with Donald Tusk at the European Council in Brussels on 24 September 2015. Photo by Getty Images.David Cameron shakes hands with Donald Tusk at the European Council in Brussels on 24 September 2015. Photo by Getty Images.

Compromise is the essence of the European Union; hard-fought, imperfect, sometimes ugly. Tuesday, European Council President Donald Tusk sketched the outline of a compromise on the British question which he will hope all EU countries can agree to at this month’s crunch summit.  In the best traditions of the EU, it is an artful bureaucratic agreement, deftly navigating many of the tensions in the negotiation through its brand of dense legalese.  

The renegotiation strategy had two main aims: first, to allow Cameron to declare he has a new settlement which addresses the concerns of sceptics and second, to minimize splits within the Conservative party. He wants to campaign having fought for the UK’s interests and won concessions. He wants to claim that the status quo is not on the ballot paper. And he wants to give some political cover to the reluctant Europeans in his party whose support is up for grabs.

This deal, if it is reflected in the final agreement, is probably as good as Cameron could have hoped for on the issues he chose. It offers solutions to the four ‘baskets’ of issues that David Cameron laid out in his November 2015 speech at Chatham House, even if it doesn’t meet all of his demands.

Competitiveness

The draft is vague, but broadly positive on the issue of competitiveness. The current European Commission is already pursuing much of this agenda and the text ticks British boxes with its references to reducing the burdens on small businesses, extending the single market and an active and ambitious trade policy.  This should be easy to agree.

Sovereignty

On sovereignty, the text does two valuable things for Cameron. First, it makes clear that the phrase ‘ever closer union’ does not offer any basis to extend the EU’s powers. This is partly to allay fears that the European Court of Justice can continue to use the phrase to frame some of its judgements.  It also proposes a specific treaty change to absolve the UK from any obligation to deeper integration, but only when the treaties are next amended. The issue is largely symbolic, and so is the solution.

Second, the sovereignty section proposes a ‘red card’ system, through which national parliaments can block new EU laws, if a qualified majority of 55 per cent of them can agree in a 12-week period.  This is a more significant power than national parliaments have had before but the threshold is set so high that it is hard to see its being used with any frequency, if at all. It would be much easier for the UK government to build a blocking minority through the existing route at the EU Council (where the threshold under qualified majority voting rules is four countries representing 35 per cent of EU population). Cameron may yet push for a lower threshold, but it is highly questionable whether that would serve Britain’s interests in the long term - the UK could find its own initiatives blocked.

Economic governance

On this issue, the text goes a long way to meet the UK’s concerns about the long-term effects of an increasingly integrated eurozone. The British government fears that eurozone decisions could harm the single market and London’s role as a financial hub. There are few signs so far of the eurozone acting as a cohesive bloc or informal caucus.  Nonetheless, the text prohibits discrimination on the basis of currency, protects the UK from any financial obligations to support the euro, and creates a mechanism for non-euro states to state their opposition to eurozone proposals. It is not a veto, which other euro states would not accept. But it creates a more stable balance for the medium term. Once again there is ambiguity around when these changes could be incorporated into the treaties.

Benefits

The issue of social benefits for EU migrant workers in the UK is the final and trickiest part. It is presented as an issue of fairness by both sides: other EU governments do not believe their citizens working in the UK should be denied social benefits on the basis of nationality, while the UK government believes migrants should not be able to draw from a pot they have not yet contributed to. In a way, both arguments miss the point since Cameron’s real aim is to reduce overall levels of immigration. He has seized upon the benefits issue because of his inability to restrict migrant flows by other means. Cameron hopes that by changing the incentives for migrants to work in low-paid employment, fewer will come to Britain, even though there is little evidence to support this.

The text proposes an emergency brake, triggered by migration of ‘an exceptional magnitude over an extended period of time’. The brake would prevent EU migrants claiming in-work benefits on arrival, with workers gradually gaining access to welfare over the course of four years. On the plus side for Cameron, the documents suggest the Commission would let Cameron pull the brake straight away. But it is not yet clear for how long the mechanism is in place. And in future, the UK will need the Commission and other member states to authorize its use. Agreement on this basket is still far from guaranteed.

The referendum campaign

This package will not convince the hard-line sceptics, some of whom had nominally kept an open mind on the renegotiation process but are not really persuadable. To satisfy them, Cameron would have needed to get other states in the EU to reverse some of the union’s fundamentals – the free movement of people or the supremacy of EU law. That would be regarded as too high a price to pay to prevent Brexit.

The chief benefit may well be rhetorical. It should give some political cover to those in the party who are more agnostic on the EU issue, and willing to show loyalty to the PM.  And it will give Cameron some useful campaign ammunition for voters who are unlikely to delve in to the nuances, though he should be careful not to oversell the deal. Overall, Cameron has calculated correctly that it is better to have made modest demands and largely succeeded, than to have grandstanded and failed.

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