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08 November 2015

Policy Network: Cameron's EU reforms - steering between the trivial and the impossible

With the referendum on Britain's membership of the EU now a certainty, David Cameron now has to finally spell out exactly what EU reforms he intends to seek. He does this knowing full well that proposals cannot at the same time satisfy his rightwing backbenchers and Britain's EU partners.

Getting out of 'ever-closer union' 

Securing this change would require maximum political effort (treaty change, unanimously agreed and ratified) for minimum impact (this wording appears in the declaratory preamble of the EU treaty and in the aspirational Article 1, and has no direct legal effect). Changing it would be purely symbolic. [...]

What Cameron might fall back on is the text he managed to get into the conclusions of the June 2014 European council meeting which interpreted ever closer union in the following way:

"The European council noted that the concept of ever-closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen anymore".

It could be a possible to get this text, already agreed by all national leaders, turned into a solemn declaration interpreting the treaty, reassuring those who really think this is an issue.

Red card for national parliaments

Cameron says parliaments must be able to “combine” to block regulations – he has not taking up Bill Cash's suggestion that a single national parliament should be able to exercise a "red card" – which would amount to a unilateral veto.[...]

So Cameron is proposing to reinforce a little-used procedure that simply duplicates an easier option to block proposals later on. It is at best an extra safeguard, but is not spectacular.

He also neatly avoids the obvious way to strengthen national parliamentary scrutiny – one which would not be restricted to questions of subsidiarity and one which does not require negotiation with anyone! This would be to apply in Britain what the Nordic countries already do – to require any minister going to a meeting in Brussels to discuss their negotiating position with the relevant parliamentary committee before leaving, rather than just telling them about it afterwards.

Procedurally, to turn the "orange card" or "yellow card" into a “red card” would normally require a treaty amendment (to the protocol on subsidiarity, which has treaty status). However, the same result could be achieved if the commission were simply to undertake to withdraw any proposal in the event of an orange (or perhaps even yellow) card being triggered by national parliaments. This should not be a major sacrifice for the commission – after all, if so many national parliaments oppose a proposal, it is anyway unlikely to get through the council.

A suggestion taken up by the House of Lords is to allow national parliaments to make suggestions to the commission for new European proposals, called a "green card procedure". This too would simply require a commission undertaking to examine any such suggestions sympathetically.

Protection for non-eurozone members

The government has long argued that the eurozone needs further integration and that it might become a hard core within the EU, marginalising non-euro countries.

In fact, although the countries that share a common currency do need to do more together to manage that situation, the bulk of what the EU does remains at the level of the whole union: the single market and the legislation that sets the common rules for that market (on competition policy, consumer protection, environmental standards, some workplace rights, etc), research and development programmes, foreign policy, trade, police and justice cooperation, the Erasmus student exchange programme, agriculture, fisheries and so on. Britain will only be on the margins if it marginalises itself.

The area where there is arguably a danger that the eurozone might act as a cohesive caucus within the wider EU is in the field of financial sector regulation. But in this area, the EU has already agreed to have a “double majority” rule, where a majority of both members and non-members of the eurozone is required to agree any new rules. This was done through ordinary legislation, without needing a treaty change, when the rules for the European Banking Authority (EBA) were laid down.

Migration and freedom of movement

This issue did not feature in Cameron's Bloomberg speech. Since last year, under pressure from the United Kingdom Independence party and the Tory right wing, he has made it his key issue.

Most migrants in Britain are from outside the EU – entirely a matter for national regulation and nothing to do with the EU. Within the EU, there almost as many Britons in other member states as there are other Europeans in Britain. [...]

Cameron’s main proposal in this area is to change tax credits and child benefits for employed (and therefore tax-paying) EU migrants. This would save the exchequer about 0.3 per cent of public expenditure – but risks much greater amounts if his strategy fails.

It is an area most fraught with difficulty and complexity.

Directive 2004/38 (on free movement of citizens) is the key piece of legislation in this field. [...]

Regulation 883/2004 (on the co-ordination of social security systems) provides that migrants from other member states shall enjoy the same benefits and be subject to the same obligations under the legislation of any member state as that state’s nationals (see Article 4). This right extends to special non-contributory cash benefits. Further, in conferring benefits host states are to take into account periods of events (e.g. employment, contributions etc.) in the national’s home state (see Article 6).

Cameron's demands in this field will require modification of (or exemption from) this legislation. Even if then, the treaty principles of non-discrimination on ground of nationality and freedom of movement apply.  Changing legislation requires the approval of a qualified majority in the council and a majority in the European parliament. Changing the treaty requires unanimous agreement of all member states and national ratification.

An alternative could be to modify the UK system to introduce a qualifying period before benefits can be claimed. This would have to be in a non-discriminatory way, eg a requirement to have been resident for two/three/four years, applying to British citizens too.

Transitional controls

The idea here is that future accessions to the EU should be subject to longer transitional periods before freedom of movement applies. As this issue is negotiated in accession treaties, which have to be unanimously agreed and ratified, there should be no problem for any future UK government to insist on that. No accession is expected for the next four years (when the most likely candidate to be ready is Montenegro, with its population of 0.6 million).

The open goals of on-going reforms

In fact, the EU is a non-stop reform process. It is a constant renegotiation of existing policies and procedures. Most EU legislation nowadays is about revising, updating, adapting or repealing existing EU legislation.

Cameron could and should claim as a victory various recent or on-going reforms which Britain has supported, including:

● the (much needed) 2013 reform of the common fishing policy, which even Greenpeace hailed as very good. It is still subject to implementing measures being adopted.
● the 2014 settlement on the budget (the MFF - the Multiannual Financial Framework until 2020). Cameron is already claiming as a success that he cut the overall budget ceiling. More significant is the shift within the ceilings away from agriculture to R&D, transport links and other items where spending at EU level saves money at national level through economies of scale or avoiding duplication.
● the Refit programme, revisiting all existing EU legislation to simplify, adjust or repeal it, not least in order to lessen any unnecessary regulatory burdens.
● the negotiations that have just started on "better regulation":  this involves providing for systematic use of impact assessments and stakeholder consultations on legislative proposals as well as stronger provisions on evaluation of previous legislation to see if it has worked.

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