Britain is running out of friends in Europe just when it needs them most Nov 15th 2014
ARGUMENTS about money are always tiresome, particularly when the sums are meagre. Take the European Union budget, a monstrous carbuncle apparently designed to sap the life force of anyone who comes near it. It accounts for just 2% of European public spending, but at least half the hot air that is blown during summits. So it proved recently, when a recalculation of national statistics led to unexpectedly large bills for Britain, the Netherlands and others, with a demand for payment by December 1st.
Although some countries faced higher surcharges per person, Britain’s overall bill, at €2.1 billion ($2.6 billion), was the biggest—and the reaction of its prime minister, David Cameron, the stormiest. At a press conference in Brussels on October 24th he hammered the lectern and vowed not to pay on time. Lo and behold, last week the British chancellor, George Osborne, won agreement from fellow finance ministers to change the rules on late payments. Under the proposal, which must still work its way through the EU’s legislative machinery, Britain and others will not have to settle their bills until September 2015, with no interest due. A classic victory for hard-nosed British diplomacy.
A pity, then, that Mr Osborne felt obliged to strut out of the meeting declaring that he had “halved” the bill. This claim was based on the rebate that Britain automatically receives on its contributions to the EU budget, which next year may reduce the new charge by €1 billion or so. Mr Osborne says it was not clear that the new bill would be covered. But for 30 years the rebate has applied to all British payments; there was no reason to think this would be an exception, and EU officials have said as much. Not all Mr Osborne’s colleagues disguised their irritation at his triumphalism. A bigger problem is that other budgetary hawks, such as Germany and Sweden, feel betrayed, since reopening the rules may let the European Parliament restart its argument that the budget should be much bigger.
The affair sums up much of what is wrong with British EU diplomacy. In some ways Britain could be likened to a petulant teenager unable to understand that other people have problems, too. Old friends, such as the Germans, Nordics and Dutch, are increasingly exasperated. Britain used to understand the distinction between feeding the press pack and conducting diplomacy, sighs a representative of one ally. But “now the spin has moved inside the negotiating room.” At a euro-zone summit immediately after Mr Cameron’s outburst, say sources, heads of government indulged in a sustained bout of “Cameron-bashing”.
Sympathy for Mr Cameron is running out. Many EU leaders face populist insurgencies similar to that of the UK Independence Party. Should he remain in office after next year’s election, Mr Cameron has promised a renegotiation of Britain’s EU membership, with the results put to an in/out referendum. Ministers have hinted that this may involve tampering with the EU’s rules on free movement of labour, a proposition that has scant support. Reports that Angela Merkel, Germany’s chancellor, would not yield to Britain on this came as no surprise to anyone who had been paying attention. The fear was that this group did not include 10 Downing Street. “Britain,” says an official from a friendly country, “is manoeuvring itself into a corner from which it becomes harder and harder to escape.”
British diplomatic clumsiness is becoming hard to ignore. In December 2011 Mr Cameron’s claim to have “vetoed” the fiscal compact, a treaty about budget rules, was undermined when every other EU member bar the Czechs signed up anyway. In February 2013 he redeemed himself by winning a reduction in the EU budget, with German backing. But in May the prime minister was again humiliated when he failed to stop Jean-Claude Juncker, a veteran EU insider, becoming president of the European Commission, believing, again wrongly, that he had Mrs Merkel’s backing. It is impossible to imagine the Juncker imbroglio happening in the past, says one diplomat: the British objection would have had more weight and been handled more shrewdly.
Indeed, many insiders speak of Britain’s declining influence under Mr Cameron. In part, that is unavoidable: the euro crisis has sharpened the divide between those that use the currency and those that do not. But today even “outs” such as Denmark, which used to look to Britain for leadership, feel better off sticking as closely to Germany as possible. And some of the British drift is hard to explain. Commission officials were baffled when Britain, unlike 13 other countries, did not take up an offer of a detailed explanation of the calculations underlying the increased bill.
Mr Cameron’s excellent adventure
The game is not yet lost. Britain remains influential in foreign policy, trade and the single market. The new European Commission that took office earlier this month has an Anglo-Saxon tint, not least in its first vice-president, Frans Timmermans, a plummy-voiced Dutchman with a mandate to slash red tape. The British commissioner, Jonathan Hill, has been given the financial-services post. And many powerful figures, including Mrs Merkel, want to keep Britain in the club (even if French-accented whispers urging its departure are growing louder). Should Mr Cameron be re-elected, he will find friends who would like to help him in his quest, so long as he does not touch any sacred cows.
And there lies the rub. Mr Cameron is due to give a speech soon outlining his demands on immigration. Britain’s finest legal minds will be working overtime to find a solution that satisfies his promises to crack down on EU migration without forcing a reopening of the treaty commitment to free movement. But for such sophistry to have a chance, the prime minister will need to draw upon reservoirs of goodwill from among his fellow leaders. And they are running dry.
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