Saving Britain from a bad divorce

FT.com

The relationship between Britain and the EU looks like a marriage gone bad. Rows are becoming more and more frequent. The two parties are talking openly about separation. The chances that Britain will eventually leave the EU are rising inexorably. This weekend an opinion poll showed that 56 per cent of Britons now want out.

In Brussels, this possibility is increasingly greeted with a resigned shrug. It is widely believed that David Cameron is behaving in an impossible fashion. At this week's summit, the UK prime minister is likely to be the only leader arguing for a freeze in the EU budget. Many in Brussels now believe that the union would work better without a British wrecking crew on the inside. In the long run, they say, it is the British themselves who will suffer.

That is the conventional argument. But it is dangerously short-sighted. Britain might well suffer if it leaves the union. But so would the EU itself. The idea that British demands are so unreasonable that they can never be met is simply wrong. A few eye-catching changes in Britain's relationship with Europe could alter the nature of the debate in the UK – and save both Britain and the EU from a mutually damaging divorce.

There are a few voices in continental Europe who are beginning to make this argument. Ulrich Speck of the Carnegie Endowment has written a piece entitled 'Why Britain is vital for the European Union'. He argues that "without Britain's active participation, the EU can forget its dreams of becoming a global power”.

But the case for keeping Britain within the EU goes well beyond the military and diplomatic assets that it brings to the union or the fact that Britain is a large net contributor to the EU budget. Ultimately, it goes back to the very purpose of the EU, which was to overcome the divisions that led Europe into repeated wars. It is worth remembering that Britain was a key participant in almost all the big European wars of recent centuries. A European "peace project” that fails to incorporate Britain is leaving out a central piece of the jigsaw puzzle.

A British departure from the EU would also send a bad signal about the future. The eurozone crisis has already led many Americans and Asians to doubt the future of the European project. If Britain – one of Europe's largest economies and its oldest democracy – chose to leave the EU, the project would look even more wobbly. Eurocrats respond that there are several countries that still want to join the union. But losing Britain and gaining Croatia would not be a like-for-like swap.

In Germany, where public opinion increasingly makes a crude distinction between law-abiding northern Europeans and the unreliable and indebted south, it is often noted with regret that both Switzerland and Norway have opted not to join the EU at all – and continue to prosper. The departure of the British, who have traditionally allied with Germany to make the case for the single market, would further weaken the northern European group. Some in France might welcome the departure of Britain, for that very reason. But even the French might come to miss the British, who tend to share their views on questions of national sovereignty.

Even as I make these arguments, I can hear the exasperated response from eurocrats: "That's all very well. But the British keep making impossible demands and threatening to veto everything if they don't get their way. One day it is special protections for the City of London; the next it is a budget freeze.”

But are these British arguments so very unreasonable? Take the budget freeze. At a time of cutbacks in national budgets across Europe, it seems entirely reasonable that EU spending – much of which is notoriously wasteful – should, at least, be frozen. Until quite recently, this was actually Germany's position as well. The British are also right that, unless the perks and conditions of EU operatives are cut back, the Brussels Brahmins will seem ever more remote from the plight of austerity-hit Europeans.

Beyond the budget, the basic British objection is that the EU is involved in all sorts of things that are better left to nation-states – and that the flow of powers has, for decades, all been towards the centre. A repatriation of some powers from Europe would go a long way towards addressing that complaint – and would give the British government the arguments it needs to win a referendum to stay in Europe.

A good start would be the repeal of some job-killing social legislation – such as the working time directive, or the agency workers directive. A broader cut back of EU powers in areas such as education, health and safety legislation and regional spending would also be helpful.

In previous decades, repatriating powers would have been regarded as heresy. But the eurozone crisis provides both a need and an opportunity to rethink old certainties. Keeping the single currency going has already involved smashing some taboos. Northern European taxpayers are underwriting massive bailouts for the Greeks and others. The European Central Bank is proposing highly unorthodox policies that many Germans regard as downright illegal.

All this has been deemed necessary to keep Greece within the euro. So is it not worth making some less radical, less expensive, moves to keep Britain inside the EU?

Copyright the Financial Times 2012.