E.U. Referendum

All Roads Lead to Berlin

Merkel Cameron
We meet again Mr. Cameron.
  • Why it matters

    Why it matters

    Germany wants Britain to remain in the European Union, but won’t be blackmailed into offering concessions that damage the European project.

  • Facts

    Facts

    • Before the election on May 7, David Cameron promised a referendum on British membership of the European Union.
    • His surprise victory means that the British public will vote by the end of 2017.
    • Ms. Merkel and French president, Francois Hollande, are to propose closer ties within the euro zone, that would not involve treaty change.
  • Audio

    Audio

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As always in Europe, Angela Merkel’s opinion will be the most important one.

David Cameron knew that as he arrived in Berlin on Friday for talks with the German chancellor, the final and most important destination on his whistle-stop tour of European capitals this week.

The British prime minister is trying to drum up support for the British push for a comprehensive reform of the European Union ahead of an in-or-out referendum on Britain’s E.U. membership by the end of 2017.

In essence, Britain wants Germany and the rest of Europe’s political leaders to agree to loosen the legal ties that bind E.U. members to Brussels, in what would amount to a brake on European integration still sought by many on the Continent.

Mr. Cameron earlier this month won a convincing reelection victory in U.K. elections in part by promising Britons they could decide whether their country remains in the 28-nation E.U., a membership many euro-skeptics in Britain oppose.

For Mr. Cameron, it is essential to get Ms. Merkel, who supports more European integration, not less, on board. She has already made it clear that she wants to keep Britain in the European Union, but just not at any cost.

What is clear is that a Brexit — Britain leaving the E.U. — is now a distinct possibility.

After winning an outright parliamentary majority on May 7, Mr. Cameron is making good on his campaign promise to hold a referendum. Pressure from the euro-skeptic wing of his own Conservative Party and from the United Kingdom Independence Party, a right-wing upstart splinter movement, has made a vote unavoidable.

Mr. Cameron, however, has said that if he secures enough of a recalibration of the U.K.’s relationship with the E.U. then he will recommend Britons vote to stay in the bloc. On Thursday his government published the EU Referendum Bill, with the question: “Should the United Kingdom remain a member of the European Union?”

“My priority is to reform the European Union to make it more competitive and address the concerns of the British people about our membership.”

David Cameron, British Prime Minister

If Mr. Cameron can get enough concessions from his E.U. partners, he will recommend a “Yes.”

“My priority is to reform the European Union to make it more competitive and address the concerns of the British people about our membership,” Mr. Cameron said in Paris on Thursday at a news conference with French President Francois Hollande. “The status quo is not good enough,” he said.

The British leader also visited Mark Rutte, the center-right Dutch leader on Thursday and was in Warsaw on Friday morning for a meeting with the Polish prime minister, Ewa Kopacz, before heading to Berlin.

Cameron Brit flag AP
Battling for Britain. Source: AP

 

The question was what kind of a reception would he get in the German capital as he sounded out Ms. Merkel on his reform ideas.

Ahead of the talks, he said he hoped to persuade the chancellor of the need for “flexible and imaginative E.U. reforms.”

After their talks on Friday morning to two leaders sounded upbeat. “Where there is a desire there is a way,” Ms. Merkel said at their joint press conference. “That should be our guiding principle.”

“This is about starting the process,” Mr.  Cameron said of the talks. “Of course it is going to be difficult but the important thing is to get it underway.”

While the British have not yet laid out the exact substance of their wish list, the key areas for reform include giving national governments more powers to veto E.U. legislation, changing the rules for E.U. migrants getting welfare payments, and limiting immigration from other E.U. countries.

The issue of migration is the most contentious, as any attempt to curb the freedom of movement would breach a basic principle of the 28-country union.

Ms. Merkel has already said that freedom of movement is a red line. At the same time she has insisted that she wants the U.K. in a “strong and successful Europe.”

“From Angela Merkel’s perspective she would never put such crucial decisions on Europe to a simple yes or no vote.”

Julian Rappold, German Council on Foreign Relations

In many ways, Ms. Merkel would be a natural ally of Mr. Cameron’s, another pragmatic center-right leader, and is likely to be open to helping him clinch some sort of deal that he can present at home as a success.

“Generally, Germany is very willing to accept British proposals,” David McAllister, a member of the European Parliament, who holds joint citizenship of the two countries, told Deutsche Welle. Particularly, he said, he would welcome any ideas for making the E.U. more effective and less bureaucratic.

The question is whether London can actually get any of these changes within the existing treaties that govern how the 28-member bloc works or if it requires treaty change.

There is little appetite for reopening the treaties, which would require referendums in several countries.

The push for any change to the treaties was dealt a blow this week with news that Ms. Merkel and Mr. Hollande have come up with a plan for closer ties between the 19 countries in the euro zone, which does not include Great Britain.

The two leaders are to present a plan at a summit in June, and it is said not to include any treaty changes.

From Berlin’s point of view, the British are often regarded as awkward partners in the European Union, constantly looking for exemptions and special treatment.

At the same time, Britain is a major net contributor to the bloc, the second largest after Germany, and its economy accounts for 15 percent of the E.U.

Losing the British would be a major blow, not just in terms of their financial contribution, but to the gravitas and influence of the European Union on the world stage.

And for Germany, the British focus on free trade, the single market and fighting red tape, is appreciated. They regard the British as allies on this front, and a counterbalance to the more pro-state, protectionist approaches by southern European countries and above all, France.

“In quite a lot of aspects, Britain and Germany have a similar agenda, with regards to free trade, with regards to pushing competitiveness and in general, of course with regards to security issues, Britain is a vital partner,” Julian Rappold, analyst at the German Council on Foreign Relations in Berlin, told Handelsblatt Global Edition.

In addition, while Germany opposes any curtailing of the fundamental right to freedom of movement, that doesn’t mean it isn’t sympathetic to British pushes to prevent migrants coming to the country to claim welfare.

Yet at the same time, the British referendum comes as an unwelcome distraction, just as the euro zone is embroiled in difficult negotiations with Greece to keep it in the European Union, and with the rise of populist euro-skeptic movements in many countries.

“At the moment for Angela Merkel, the main issue is really to stabilize the euro zone and make it crisis resistant,” said Mr. Rappold . “In the end it is weighing up to what extent can we concede to the U.K. while actually maintaining our priorities in the euro zone.”

Meanwhile, since winning the May election, Mr. Cameron and his government seem to be trying to frame the push for reforms as being to the benefit of the entire European Union, while at the same time trying to tell the British people that he will get the best deal for them.

“He uses a different rhetoric domestically than with European leaders, which could turn into some problems for him in the negotiations,” said Mr. Rappold.

Fundamentally it reveals a difference in the German and British perceptions of the European project. Whereas Britain sees it primarily as a free market that benefits its economy, for Germany it is much more about a political project, one that ensured peace in Europe just a decade after the end of World War II.

And even if the British prime minister wrests enough concessions, he still has to sell that to the British public. The fact that he has maneuvered himself into this position is something that master tactician, Angela Merkel, finds incomprehensible, argued Mr. Rappold.

“She perceives Cameron as coming out of the elections strengthened but she sees a lack of strategy: That he has been forced into a situation where he has to hold a referendum. From Angela Merkel’s perspective she would never put such crucial decisions on Europe to a simple yes or no vote,” he said.

The fact that Britain is using the prospect of referendum to put pressure on the E.U. partners is not particularly appreciated in Berlin, either within political circles or within the business community.

Volker Treier, deputy chief executive of Germany’s chamber of commerce and industry, told the BBC that the German business world was “astonished” the United Kingdom was holding a referendum at all. And he said Ms. Merkel should not accommodate British requests. “Our recommendation is not to deal under such circumstances.”

 

Siobhán Dowling is an editor with Handelsblatt Global Edition and covers European politics from Berlin. To contact her: dowling@handelsblatt.com

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