The single market: you can’t write the rules of the game on your own

It’s one of the interesting things about the Conservative Party’s EU crises: the militant Europhobes force the more moderate Eurosceptics to sound both more and less anti-EU. So we have David Cameron referring to the European Union’s achievements as a “precious thing” at the same time as he talks about using the eurozone crisis to repatriate powers from Brussels. Boris Johnson accepts that the City wouldn’t want the UK to find itself without a vote on single market rules, while he argues that we should opt out of pretty well everything else. And David Lidington talks about repatriation of powers, in order to “feel comfortable with membership of the EU”.

Lidington is no swivel-eyed Brussels-hater: he can see why some form of European co-operation matters. And clearly, you can have major opt-outs within an EU framework (the euro, the abolition of passport controls, large areas of justice and home affairs …) – and this will increase for the UK and for at least some other EU member states, as the eurozone integrates further.

However, the fact that other EU member states are going to need to integrate further in order to make the eurozone viable does not mean that they will suddenly agree to grant the UK a whole series of opt-outs on existing agreements. The UK already has pretty much zero goodwill left right now with most of its European partners. It isn’t hard to see exactly what they would think of London for deciding to halt the very measures it has called for the eurozone to take – which it has called vital for the sake of the global economy – in order to settle a purely domestic debate about ‘Brussels’. Furthermore, they would be very likely to do exactly what they have already done with the Fiscal Compact: that is, move ahead outside the EU Treaties and hope to incorporate the new measures later on. Depending on the exact reforms involved, this could be more difficult to achieve, but the amount which can be done without Britain’s say-so is likely to be a great deal more than Tory hardliners like to think.

Part of the problem is that the British are underestimating the commitment, when push comes to shove, of most of Europe’s political elites to the euro. They always do. They assumed that EMU would never actually happen; then they assumed it would never launch in 1999; many of them assumed in 2011 that eurozone governments would let the eurozone fall apart. They won’t – partly because they’re terrified of the consequences (and rightly), but also because they are committed to European integration in a way which London is not. British elites (mostly) see the putative collapse of the euro as an economic disaster: so do most continental ones, but they also see it as a disaster for the European idea. In the end, therefore, the rest of Europe simply will not be willing to let British self-obsession wreck the whole show: and the experience of the Fiscal Compact shows that they will probably find a way to stop it from doing so.

The other point which the British fail to see is the way in which other governments view their particular demands. Many Britons talk about focusing on the single market and nothing else. For most other Europeans, social and employment law aren’t separate from the single market, but part of the package. In order to remove barriers among ourselves to commerce and trade, we have some common rules to ensure that national rules aren’t putting new barriers in place. Most of these are meant to ensure that our laws are similar enough that we can recognise each others’ and thus operate freely in each other’s countries. From the point of view of other Europeans, if we’re going to remove those barriers, then part of the common framework should be a certain set of minimum standards of how European workers are treated, to prevent a race to the bottom.

So other European governments are going to see this as an attempt to access the single market without playing by its rules – and to undercut their own businesses in the process, by being allowed to treat employees in a way which none of them would tolerate. This is one thing from developing countries, who frequently compete on labour costs, for obvious reasons: it’s quite another thing from a fully developed country which joined the Social Chapter over 15 years ago. Furthermore, it’s dangerous to the whole concept: if one country can unpick bits and pieces of the single market, why can’t another? And where does it all stop?

Some commentators in Britain talk about Germany as a potential ally in helping London here. If anything, Germany is likely to be particularly stern in its opposition: it takes rules seriously. Angela Merkel may well want Britain to be involved in moving the EU in a free-market direction: that’s different from letting Britain drop the regulations and leave the others to it.

It’s perfectly true that other EU members want to ensure that eurozone integration doesn’t exclude non-euro countries from decision-making about the single market, either in theory or in practice. That is a separate, crucial debate. However, no other EU government wants to unravel large parts of what the EU has already created … or to allow one country to duck out of anything it sees as inconvenient. And they won’t allow Britain to impose it on them.

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