EconoMatters, Rethinking Europe

Cameron’s EU Treaty Change: No Chance, Really?

Whether EU leaders like it or not, an EU Treaty change debate is definitely on the agenda.

Credit: Johann Helgason Shutterstock.com

Takeaways


  • Whether the EU leaders like it or not, an EU Treaty change debate is definitely on the agenda.
  • UK and Germany – as the Union’s two biggest destinations for migrants – have a lot in common.
  • Cameron, Merkel, Tusk & Sarkozy want to see EU Commission President, Juncker’s wings clipped.
  • The barrier to the next Treaty change in the EU is much more likely to be France than the UK.

The last time that an EU Treaty change was attempted in the EU was in 2011. It failed because UK Prime Minister David Cameron, then in his second year in office, refused to bend to the will of German Chancellor Angela Merkel, French President Nicolas Sarkozy and Donald Tusk (then still the Prime Minister of Poland).

This time, in an true ironic twist, it is David Cameron who is doing the driving on the Treaty matter. And now, it is Angela Merkel — and perhaps soon again Nicolas Sarkozy — who are the opposing forces.

Meanwhile, Donald Tusk — no longer in Poland — now serves as President of the European Council. Whatever the ultimate outcome of this effort, let’s just hope nobody is holding a grudge.

One positive sign from London’s perspective is that , after an initial wall of refusal, there has been something of a spate of “what we want from any future EU reform” shopping lists being bandied about the European Union of late.

And while it is true that sniggering at the prospects of a UK-inspired EU Treaty change still dominates the public discussion, governments across the region have begun to realize in private that there is not only a certain need for it based on recent experiences (Read Greece), but also a certain inevitability to it.

One thing is for sure. Whether the EU leaders like it or not, an EU Treaty change debate is definitely on the agenda at some point in the future.

Of course, achieving such a treaty change in the EU is easier said than done. European Council President Donald Tusk once called it a “mission impossible.”

And other European leaders will not easily forget that the last time when Treaty change was attempted in late 2011, it was none other than David Cameron himself who wrecked the process by vetoing the changes, and forcing the other members into the Fiscal Compact.

the last time a Treaty change was successfully undertaken (the Lisbon Treaty), was in 2007 when Germany that held the EU Presidency. Chancellor Merkel, back then, did a considerable amount of forward planning and homework to ensure she maximized her chances of success.

But who, I wondered, held the Presidency of the Council of the EU back in 2011 when the parties failed to make a deal? Well, it was Poland presiding over the Council of the EU then, with none other than Donald Tusk as its prime minister. Little wonder he thinks that Treaty change is “Mission Impossible.”

Tusk and Merkel: “Don & Angie” of today

Which raises an obvious question: given that failure, how is it possible that the same Donald Tusk was selected as President of the European Council? (To be fair, in 2011, he couldn’t help but have been at least slightly distracted by the domestic re-election campaign that he was in the middle of.)

Mr. Tusk won his current EU job largely thanks Germany’s Angela Merkel who did most of the heavy political lifting for him to become President of the European Council.

In particular, Merkel persuaded other EU leaders at the time that a strong statement should be sent eastwards towards Moscow.

The Tusk message was clear enough: By making Poland’s leader head of the EU, Europe signaled that its eastern-most members were of the utmost importance to it.

What then are the odds? After he met with senior French leaders in Paris recently, UK Chancellor George Osborne emerged to say of the UK’s demands for Treaty change that “there is a deal to be done.” I think he is right.

But what exactly does the UK have to offer Chancellor Merkel, Nicolas Sarkozy (the presumed French President by mid-2017) and Donald Tusk, these three being the very people most upset at Mr. Cameron’s behavior the last time that Treaty change was in the air?

United against the common enemy?

For its part, France continues to like the idea of an “economic government” for Europe. For that reason, it was France – and Nicolas Sarkozy – who was most angry at the UK for its 2011 Fiscal Compact veto.

Of course, France does know a thing or two about vetoes, having earlier vetoed the UK’s original entry to the EU. But, if I’m right, then it will be France that will be most pleased at the notion that the UK is ready to unblock its Fiscal Compact veto when it comes up for renewal.

Not only that, but it might suit everyone by 2017 (including the French people, by the way) to have a less unpleasant way of giving Greece its drachma back but keep it in the EU.

In the recent wrangling over Greece, Germany seemingly became unhappy at the EU Commission’s lack of independence (tune into Wolfgang Schaüble’s latest musings on the subject if you are in any doubt about this).

But — surprise, surprise! — the German Finance Minister’s move, it turns out, establishes significant common ground with the UK. It has long wanted to wrestle power away from Brussels.

Not only that, but the UK and Germany – as the Union’s two biggest destinations for migrants – have more in common than one might think regarding the fully-loaded costs associated with the EU’s freedom of movement principle.

Actually, in this regard, the European Court of Justice’s 2014 ruling on migrant benefits probably already gives the UK government most of what it needs with respect to resolving the issue to its satisfaction.

Given that the whole migration issue has become something of a red herring in the Treaty renegotiation, if most UK concerns have already been met, then what is there to fight about?

As for Poland and Donald Tusk, the National Bank of Poland Governor – Mr. Belka – said recently that Poland would never want to join a “burning” eurozone.

Unfortunately for Poland, that’s exactly what the current EU Treaties, as presently constituted, say that it should be doing.

Poland isn’t the only non-euro country in the EU that does not want to be obligated by Treaty to move to the euro, by the way: Sweden, Denmark and Bulgaria don’t fancy it either.

Some more reasons

And try these three additional ideas for size if you think that anything else might be needed to sweeten the next EU Treaty deal for all the aforementioned parties:

  • UK Conservative MEPs moving back to the EPP fold in the next European Parliament. It’s a move that would simultaneously please Mrs. Merkel, Mr. Tusk and the next French President (assuming a Republican victory).
  • A second term as European Council President for Donald Tusk in mid-2017 (just as the UK takes on the Presidency of the Council of the EU) if he plays his part in moving towards Treaty change by mid-2017.

    Witness what happened to Mr. Dijsselbloem recently, if you don’t believe that horse-trading like this can possibly happen in the EU).

    Although there was a lot else going on at that last European Council summit in July, but Mr. Tusk did let Mr. Cameron make his “reform” presentation in the end, didn’t he?

  • If there are four people in the EU who would be happy to see EU Commission President Juncker’s wings clipped, it happens to be David Cameron, Angela Merkel, Donald Tusk & Nicolas Sarkozy, all of who have variously had issues with his Presidency of the Commission.

France, the troublemaker?

Actually, if there’s a big barrier to the next Treaty change in the EU, it is much more likely to be France than the UK, even though the latest soundings from Paris appear favorable.

Will it be the turn of France to play hardest to get at the next Treaty change? Or will it be Italy’s turn, on account of the lack of enough movement towards Political Union? Anyway, the culprit is not the one that everybody assumes — the UK.

Next EU treaty already planned?

A final note: It seems to me that the same four key players in the last, abortive Treaty change – Mrs. Merkel, Mr. Cameron, Mr. Tusk & Mr. Sarkozy – have buried the hatchet with respect to that particular debacle.

Unbeknownst to most –they have in fact already sewn up the biggest issues associated with the next Treaty change, at least at a political level.

As for the UK’s desire to see “ever closer union” revert to the past tense as opposed to the future tense, what did you really think that there were two European treaties for, if not for a big of ambiguity when needed!

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About Stuart Parkinson

Stuart Parkinson is an economist and writes at The Top Note, a blog discussing ongoing macro and micro-economic issues. Follow him @thetopnote

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