The UK’s Future in Europe Looks Very Swiss

December 14th, 2011 at 2:37 pm | 7 Comments |

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Despite what the sensational media coverage might suggest, EU-UK relations did not experience a watershed moment last week.

The EU has indeed become a two-tier organization but the divide has not occurred between the UK and Europe but between the Northern “fiscal hawks” and the slump European South, which has dragged the EU into its financial turmoil.

David Cameron’s failure to bring home the concessions he wanted for the UK can be attributed to both bad timing and the tactlessness of the British prime minister. It is understandable that many European heads of state felt irritated when Cameron was putting financial technocratic issues on the agenda while many were consumed with the larger question of how to prevent the collapse of the union.

Cameron can be penalized for misunderstanding the gravity of the summit but not for using the UK’s democratic right to withhold a European Union treaty.

Many back in Britannia fear that with the recent fallout that the UK will face a hard time getting any leverage on the EU negotiating table as it lost the few allies it had in continental Europe after this weekend.

However many Euro skeptics in the UK are now looking to Switzerland as a model to emulate. The goal would be to keep the UK and the City of London independent and financially competitive while still reaping the benefits of the common market.

Switzerland has been the elusive poster boy for many Euro skeptics in the past and a closer look shows that while Switzerland remains an EU pariah that it has also undergone closer cooperation with the EU.

Good examples of such behavior is the 2005 incorporation into the Schengen treaty, and the 2007 decision to accept workers from Bulgaria and Romania. Today, Switzerland has amassed around 210 trade treaties with the EU.

The U.K. can be more like Switzerland but it must remember that future EU financial regulations will be decided by majority vote. Hence London has to be aware of the anti-UK sentiments within Brussels. The UK can nevertheless build on the recent summit proceedings from Brussels that have set the EU into the right direction: not that inter-governmental supremacy looks to trump the centralized supranational dictate of Brussels.

Gideon Rachman of the Financial Times makes a very valid point when he suggests that the recent decisions made in Brussels will, “…end up as a footnote in the history books [rather] than a bold new chapter.” Boris Johnson, mayor of the City of London rightfully points out the ridiculous “…epoch-making about David Cameron’s use of the veto – as though some national Excalibur had been finally plucked from the rock..”

There is nothing epochal about David Cameron’s withholding and therefore both sides would be well advised to continue the work on setting up safeguards and mechanisms, which will ensure a sustainable and fiscally responsible European union in the future.

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7 Comments so far ↓

  • Cyberax

    Who cares how Germany or France would think about the UK?

    Unlike them, UK has a good central bank which actually is effective in what it does.

    • althing7

      Given Germany’s dominance in the ECB and their obsession with fighting imaginary inflation at the expense of real economic growth, Britain is–at least for right now–fortunate not to have the euro and is undoubtably better off keeping its own currency for the foreseeable future. However, Britain can’t just blow off France and Germany–the three of them are giant economies that are intractably interlinked, and for this reason, Britain has a vested interest in everything France and Germany do.

      Precisely because Britain is so interested in what France and Germany do, I don’t think the Swiss model this article points to is really a viable model for them. Switzerland reaps the benefits of the common market while maintaining an aloof relationship with the EU at the expense of surrendering influence over EU decisions, so they really are at Europe’s mercy. Britain may (sometimes justifiably) not want to play by the EU’s rules, but if the EU starts making rules without even including Britain, Britain may find itself in an even worse position.

  • dugfromthearth

    The UK is like ancient Rhodes. It survived a world of great powers by playing them off against one another, trading with all, and maintaining its independence. It annoyed everyone but they needed its power. Then Rome rose and Rhodes could no longer play games. Rome controlled trade and largely bypassed Rhodes, the island collapsed and became irrelevant.

    The UK lives on trade. It survives as long as trade is multi-directional and it can maintain its influence. A unified Europe without the UK makes the UK irrelevant. The EU will have its internal trade which favors the EU. The UK will be locked out.

    The politics which worked in the 18th and 19th century with Great Powers failed when the world settled down to 2 superpowers. Likewise the trade and isolation policies of a multi-polar world will fail when the world changes. And it is changing.

    • hisgirlfriday

      How can you compare the Eurozone to Rome? There is no overwhelmingly powerful Eurozone army or charismatic emperor to hold everything together in Europe. Just bureaucrats and bankers.

      I don’t buy that Europe is so unified or that it can maintain unification even in times of crisis such that the UK will suddenly become irrelevant because Cameron stood up to Merkozy. Just look at how wildly different the reactions were to Cameron’s veto in France and Germany. Sarkozy is carrying on histrionically like it’s the end of the world (which it may be for his political career if France loses its AAA rating as expected) but Merkel is calm, cool and collected and saying the UK is still a strong partner in the EU.

  • dugfromthearth

    First, the rise of Rome was pre-Emperors so there were no charismatic Emperors that made the difference.

    Second, Rome did not defeat Rhodes through warfare. They turned the city of Delos into a free port, which lured almost all trade away from the city of Rhodes. Rhodes was forced to sign a treaty on Rome’s terms in 164 BC.

    Third, there is no option for Europe but to stay unified. The countries all benefit greatly from the EU and leaving it would be a disaster for all involved. There is no realistic chance that an EU nation will leave it, or will abandon the Euro and re-instate their own currency.

  • Carney

    Free movement of capital and products, but not of people. How hard is it to grasp?