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Analysis - EU designs permanent outer circle to keep Britain in
February 2, 2016 / 4:07 PM / a year ago

Analysis - EU designs permanent outer circle to keep Britain in

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Detail of a European map, including Great Britain, is seen on the face of a Euro coin in London, Britain, January 31, 2016.Toby Melville

LONDON (Reuters) - The European Union formally abandoned on Tuesday the founding principle that all of its members are heading towards ever closer integration, only at different speeds.

But whether that will be enough to enable Prime Minister David Cameron to win a referendum perhaps as early as June on maintaining British membership of the EU remains to be seen, given hostility in his Conservative party and the depth of public anxiety about immigration.

A draft deal negotiated by EU authorities with the aim of keeping Britain in the 28-nation bloc recognises for the first time that some countries do not share the objective, enshrined in the 1957 Treaty of Rome, of "ever closer union" and may never go further in political integration.

A legally binding decision up for approval by EU leaders says references in the bloc's founding treaties to an ever closer union among the peoples of Europe "do not compel all member states to aim for a common destination".

In other words, member states will no longer be obliged to order the full set menu at European Commission President Jean-Claude Juncker's restaurant, but have a recognised right to pick and choose their courses.

The text makes explicit a long-term shift in Europe's architecture towards a two-tier or multi-tier system, with the 19-nation euro zone destined to move to deeper political and economic integration even as others stand aside.

Until now, the Brussels orthodoxy had been that all members of a "two-speed Europe" would eventually participate in all European policies, but at their own pace.

Britain is already the most semi-detached of EU members. It has opted out of the euro and the Schengen zone of passport-free travel and only participates in judicial and police cooperation on an "a la carte" basis.

EU officials are keen to avoid the terms offered to Britain triggering a "me too" wave of efforts by others, such as Poland, to row back on existing commitments.

Poland, Hungary, the Czech Republic, Romania and Bulgaria all bound themselves in their EU accession treaties to join the single currency once they meet the economic criteria. Since the euro zone's debt crisis, most have stalled preparations.

At Britain's behest, the text recognises that "not all member states have the euro as their currency" but it avoids undermining the others' obligation to join. Warsaw's new Eurosceptic government has said it does not intend to adopt the euro during its four-year term.

Insubstantial?

Cameron secured concessions on a range of demands from more say for national parliaments, to denying welfare benefits to new EU migrants arriving in Britain, and a procedure to make it harder for euro zone countries to outvote non-euro members.

But hardline Eurosceptics dismissed the package in advance as insubstantial and too weak to restore national control over immigration, while even some supporters of EU membership said the deal created no new rights or constraints.

"There is nothing in the text that substantially alters the EU rules and laws as far as they apply to Britain or any other country," former Europe Minister Denis MacShane of the opposition Labour party said.

"There is no veto for the House of Commons which would have to find 13 other parliaments and governments to object to a EU proposal. Some benefits to EU citizens working in the UK face some changes but that is happening in other member states. There is no interference with the principle of free movement," said the strongly pro-EU MacShane.

Cameron has secured an immediate right to deny newcomers in-work benefits by using a new provision that, if approved, would recognise a state of emergency in Britain's social services due to immigration.

However, experts including the head of Britain's independent fiscal watchdog doubt whether the measure will have much impact on migration from poorer EU countries, given that a buoyant labour market is sucking in workers into low-skilled jobs.

Britain neither sought nor received a veto over further euro zone integration, which its finance minister George Osborne has said is in the remorseless logic of sharing a single currency.

The EU has fudged the issue of assuaging UK fears of being outvoted by euro members on regulation affecting the City of London's global financial centre without giving Britain a veto right over such rule-making.

The deal includes a procedure allowing a country or group of countries to force a special deliberation and additional efforts to find a solution when it feels disadvantaged.

But how high the issue can be escalated remains to be agreed, and the final decision would rest with finance ministers by majority vote. So Britain could still be outvoted.

Similarly, the text gives national parliaments a slightly greater power than before to stop legislative proposals by the European Commission that a majority deem to infringe national prerogatives. Previously, a smaller group of legislatures could send a proposal back to the EU executive for redrafting.

However, the short deadline and large number of parliaments needed to stop a European bill make it unlikely that the so-called "red card" will be waved more frequently than the current "yellow card", which has been used only three times since 2009.

For its part, London gave a commitment "not to create obstacles to but facilitate such further deepening" of the economic and monetary union.

That would appear to preclude any repeat of a 2011 incident when Cameron tried to veto a fiscal compact treaty designed to strengthen enforcement of EU budget rules in the euro area, only for other member states to adopt the measure as an inter-governmental treaty, bypassing Britain.

Writing by Paul Taylor; Editing by Mark John

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