The Split

So, the UK and EU are finally separating it seems.

Like a divorcing couple who’ve been arguing for years, the split was perhaps inevitable, and the immediate cause seemed almost irrelevant.

After all, what were they actually arguing about?

Merkel and Sarkozy complained that the UK vetoed a treaty agreement on economic integration, but Commission sources are arguing that almost all of the elements of the agreement could be achieved within the current Treaty framework.

Cameron refused to sign up because of a failure to include an opt-out on regulation of the financial market… an issue which some commentators argued could easily have been conceded by Sarkozy. And why did Cameron pick this issue to provoke a split? The financial sector in the UK is currently about as unpopular as…well, as unpopular as the EU. It would have made more sense to create a Euro fight over something more dear to the hearts of the Brits… like saving the  British sausage for example.

So why did they fall out? Well, perhaps the leaders were driven by a very similar motivation: the desire to avoid the scrutiny of their electorate.

Cameron was well aware that he would have had little chance of being able to deliver a new Treaty. Had he returned having signed up to a deal he would have been under intense pressure to put the issue to a referendum, which would almost certainly have been lost, or he would have risked being defeated by a rebellion in the House of Commons. And it would not just have been the Eurosceptic extremes of the Tory party putting him under pressure, but the whole political spectrum. After all, even Nick Clegg, the Liberal Deputy PM (an ex-MEP, and leader of the UK’s most pro-EU party), agreed with the decision to veto an agreement. And even the opposition Labour Party have not said that they would have signed up for the deal.

Meanwhile, Merkel and Sarkozy could blame the British for the failure to agree a Treaty, whilst surely being relieved that that the rift has taken attention away from accusations of a Franco-German power-grab, and perhaps even that the deal would be easier to ratify as an inter-governmental treaty than through the more formal requirements of a full EU Treaty change.

The twenty-something Member States which do decide to sign up to the agreement still need to ratify the pact. It’s not yet clear what this will mean in various countries, and all the leaders will be keen to avoid any kind of public vote. But there will be pressure for exactly that in some countries, and that as everyone has more time to digest the results of this European Council, the relief that a deal has been made – with nearly everyone still onboard – may turn for some into concern and anger that further economic integration is going ahead without a popular mandate.

Will the citizens of the Southern European countries really be happy about giving up more control over their economies to Germany ? And will the German people be happy that Merkel has bound them in even closer to an economic union which seems bound to lead to the Germans continuing to pay a price to support the weaker economies?

This is not really a divorce of course – no-one has left the EU, there’s just an additional agreement between up to 26 countries to setup a new European economic club. But how will the new club relate to the EU Institutions? The Institutions are governed by the EU Treaties, and the new inter-governmental agreement falls outside of that framework. The UK is already arguing that this means that the new pact cannot be supported or enforced by the Commission – it’s not within their mandate, and indeed even the EU’s buildings should not be used for the 26’s club meetings. If the 26 have to find alternative ways of working which involve creating new non-EU mechanisms, then it may be the Institutions – and the European Commission in particular – which end up regretting this split, if they are marginalised and cast to one side. At the end of the day, it’s always the kids who end up paying the price of a messy divorce.


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