27 April 2016

A critical view of the EU deal, from Germany to Britain

By German professors group

The EU is facing two unprecedented crises: a never-ending currency and economic crisis, and an unprecedented migration crisis which threatens the foundations of the welfare state and the long-term social stability of its member states.

And, as so often, when the EU is facing problems created by premature integration, and no one knows what is to be done, Brussels, Paris and Berlin are responding not with plans for less, but for more EU integration. This is the message of the so-called Five Presidents’ Report which sets out the agenda for full-scale eurozone integration with important implications for the EU as a whole.

In the 1990s Britain, wisely decided not to join the common currency and she never became part of the Schengen ‘open borders’ regime. David Cameron has long called for fundamental reform of the EU. In February, with considerable political skill, he negotiated an EU-UK Agreement which confirms Britain’s opt-outs under the existing Treaties. In the circumstances this is probably the best deal that could be secured. But can the EU-UK agreement be the nucleus of much needed wider reform within the EU? Here we have doubts.

There are four principal areas to the UK-EU Agreement.

First, the provisions on economic governance and competitiveness. They generally do not go beyond vague commitments and otherwise merely confirm the UK’s non-participation in the eurozone banking union and future eurozone bail-outs. The Agreement also provides  some assurance to the United Kingdom that further eurozone integration will take account of the special position of non-eurozone EU members, although, in turn, the United Kingdom agrees to sincere cooperation in facilitating further integration within the eurozone. As for the promises to improve economic competitiveness and reduce regulatory burdens, one only has to look back at the launch of the EU’s Lisbon Agenda in 2000 which was aimed to transform the EU into “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010.” As the year 2010 approached, references to the Agenda were progressively expunged from EU documents and websites, and it now primarily survives on Wikipedia and in fading memories.

Second, there is the symbolically important declaration that the UK is not committed to ‘ever closer union’. However, there is not a single important judgment where the European Court of Justice has relied on this formula as the exclusive legal basis for driving EU integration, and it is difficult to see how, in practice, the UK could in future escape the uniform application of future judicial activism in the EU except in areas where the UK already enjoys pre-existing opt-outs.

Third, the Agreement envisages a legislative ‘red card’ for national parliaments. This is an innovation of potentially wider significance. However, it would only work if there were a mass revolt of national parliaments against their own majority governments.

Finally, the new ‘emergency brake’ would limit access to welfare benefits by EU migrants for up to four years for individuals and seven years in total. The ‘emergency brake’ could potentially save the UK Treasury a few hundred million pounds in total, but there will be administration costs and the net benefits are difficult to quantify at this stage. Further, there is an open question whether time-limited differential access to in-work benefits would, in the long term, significantly reduce EU immigration into Britain. Most EU migrants come to work and not, primarily, to claim benefits in Britain. Moreover, once non-EU immigrants are naturalised in Germany and elsewhere, there is nothing to prevent them from exercising their right to free movement and cross the Channel legally, not illegally. Thus, even if the United Kingdom is not part of the EU’s common asylum policy, no country will be able to escape its consequences

We believe that the EU needs the United Kingdom and her voice of reason, all the more at present when almost everyone appears to have quit reason. Whether Britain needs the EU just as much, is a choice for the British people. But it is not a choice between change and no change. Rather, it is a choice between leaving or remaining in an EU that would remain committed to further political integration, and there is nothing in the EU-UK Agreement that can offer the UK any permanent legal safeguards against being dragged along the path of further integration albeit with provisos and reluctantly. The Agreement cannot do so because it does little to reform the EU and does not exempt Britain from the jurisdiction of the Court of Justice and the uniform application of its pro-Union approach to judicial decision-making.

Authors and signatories:

Gunnar Beck, Barrister (EU law), Temple, London
Charles Blankart, professor (economics), Berlin
Gerd Habermann, professor (economics), University of Potsdam
Hans-Olaf Henkel, MEP and former president of the German Federation of Industry
Dietrich Murswiek, professor (public and EU law), Freiburg
Alfred Schüller, professor (economics), Marburg
Joachim Starbatty, MEP and professor (economics), University of Tübingen
Roland Vaubel, professor (economics), University of Mannheim