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15 October 2015

Bloomberg: What the U.K. Needs From Europe, and Vice Versa

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Having made a promise he cannot deliver, U.K. Prime Minister David Cameron must now turn for assistance to what one of his predecessors called the source of most of the world's problems. That's right: He needs the help of Europe.

Cameron has promised British voters a referendum by 2017 on whether to remain part of the European Union. He's on track to keep that promise; the "In" and "Out" campaigns for and against membership have begun in earnest. It's another pledge he has made -- that the EU would first undergo "fundamental, far-reaching change" -- which is causing him problems.

There's little doubt that the EU is in desperate need of reform. Yet no EU member state can force change on the other 27. The way out of this little box Cameron has built for himself is for the EU itself to propose major changes in the way it does business.

Disillusionment with the EU, after all, is not a purely British phenomenon. Other governments also want to change the kind of meddling, top-down policy making that has eroded the European project's popularity. The U.K.'s demands for new EU welfare rules for migrants, for example, are hardly unique or even far-reaching. Europe desperately needs to modernize its immigration policies as a whole, and should use the upcoming U.K. referendum as a spur.

Granted, the British attitude can be hard to take. [...] Britain has also been right about the need to reduce the absurd proportion of the EU budget devoted to agriculture. 

More broadly, a departure from the EU would be as calamitous for the EU as it is would be for the U.K. Britain is not Greenland, which left the EU in 1985. It is the EU's second-largest economy and dominant financial center, and it's an essential balance to German power in the union. Without it, the EU would be significantly weaker at a time of growing economic and security challenges.

In short: EU leaders should see Cameron's drive for reform as an opportunity to bring Europe's federalizing ambitions in line with its reality. It isn't just Britons who would benefit from a restructured EU.

Cameron, for his part, needs to say -- soon -- what specifically Europe needs to do for the U.K. to remain comfortable within it. The sooner Cameron and his EU counterparts answer the question of reform, the more time he and other supporters of membership will have to make their case on the merits.

Full article in Bloomberg

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