Britain's prime minister vows to refashion the EU, not to refashion Britain's relationship with the EU

David Cameron: we Eurosceptics are only trying to help

CONSTRUCTIVE criticism, from a Britain at the heart of EU decision-making. That was the new tone on Europe from David Cameron this evening, as he climbed into white tie and tails and gave his annual Lord Mayor's banquet speech on foreign policy.

To believe the rather lazy instant headlines, the prime minister took the same Eurosceptic line at the Mansion House tonight as he did in the House of Commons last month, when he tried to head off a European rebellion by describing the euro crisis as a great opportunity to advance Britain's national interests.

According to the BBC, for example, Mr Cameron used tonight's speech to say that: "The current turmoil in Europe is an opportunity for the UK to "refashion" its relationship with Brussels." TheDaily Telegraph, meanwhile, asserts in its report that: "The Prime Minister insisted that leaving the EU was “not in our national interest” but said he felt “very personally” that now was the time for a fundamental reconsideration of European relations".

Actually, Mr Cameron's speech was more subtle than that, and more pragmatic than his House of Commons intervention last month. That October statement was calculated to leave the impression with MPs that the prime minister shared their yearning to hijack future EU treaty changes and demand back a raft of powers from the EU under threat of a British veto (with Mr Cameron differing with MPs only over the likely timing of such a confrontation).

In fact, Mr Cameron's speech tonight suggested that the euro crisis might be an opportunity for the EU's 27 members to agree on serious reforms of their club, in all their interests. That marks a clear shift, and surely reflects recent high-level briefing by other members, notably Germany and France, that if Britain asks too high a price for agreeing to new rules within the euro zone, those rules will be agreed without Britain, in a treaty outside the EU's structures.

Faced with a direct threat of a two-speed Europe in which big decisions on the internal market are cooked up by an inner core of the 17 countries that use the single currency, Britain is now back in its familiar stance of seeking allies within the club for deeper market liberalisation, less regulation, lower spending and an EU that is more responsive to national democratic voices. Mr Cameron did use the phrase "we sceptics" tonight, but most of the EU section of his speech could have been given by Tony Blair or Gordon Brown without blushing.

That is not such a bad thing. Those MPs calling last month for Britain to seize the golden opportunity of the euro crisis were falling into the familiar British Eurosceptic trap of swerving in a heartbeat from excessive pessimism (oh no, Britain has no influence at all over a rampant European superstate) and excessive complacency (oh yes, lots and lots of other countries agree with us or are so dazzled by Britain's foresight, wealth and dynamism that they will concede a very great deal to keep us in their club). More simply still, they badly underestimated the danger to British national interests from an implosion in the euro area.

Here is what Mr Cameron said tonight at the Mansion House. Forgive me if I quote him at some length:

Out of crisis can come opportunity for the European Union, if its Member States are ready to grasp it. Now is the chance to ask: what kind of Europe do we actually want? For me, the answer is clear. One that is outward-looking – with its eyes to the world not gazing inwards. One with the flexibility of a network, not the rigidity of a bloc – whose institutions help by connecting and strengthening its members to thrive in a vibrant world, rather than holding them back. One that understands and values national identity and sees the diversity of Europe's nations as source of strength. I feel this very personally... what needs to change? Of course, the immediate answer is growth. Europe's arteries have hardened. As a continent we are slipping behind, growing less fast than the rest of the world. European countries have indulged in debt and overspending… …and looked uncertain – or worse – when confronted with the consequences. Unless we all get a grip on growth the European Union will remain an organisation in peril representing a continent in trouble. And now every member of European Union can see it. That's why Britain's EU growth plan is focused – together with other allies – on promoting open markets, flexible economies and enterprise. And it's why we must continue to work with the European Commission for the completion of the single market in services… …the opening up of our energy markets… …and the scrapping of the bureaucracy that makes it so hard to start a new business. European countries account for 50 per cent of our trade and much of our inward investment. Leaving the EU is not in our national interest. Outside, we would end up like Norway, subject to every rule for the Single Market made in Brussels but unable to shape those rules. And believe me: if we weren't in there helping write the rules they would be written without us – the biggest supporter of open markets and free trade – and we wouldn't like the outcome. For too long, the European Union has tried to make reality fit its institutions. But you can only succeed in the long run if the institutions fit the reality. For years people who have suggested doing less at European level have been accused of not being committed to a successful European Union. But we sceptics have a vital point. We should look sceptically at grand plans and utopian visions. We've a right to ask what the European Union should and shouldn't do… …and change it accordingly. As I said, change brings opportunities. An opportunity to begin to refashion the EU so it better serves this nation's interests… …and the interests of its other 26 nations too. An opportunity, in Britain's case, for powers to ebb back instead of flow away… ….and for the European Union to focus on what really matters. To underpin prosperity, stability and growth. That is kind of fundamental reform I yearn for. And I am determined to do everything possible to deliver it.

Note his talk of refashioning the EU in a more open, competitive, dynamic and fiscally prudent direction, in the interests of Britain but also the other 26 nations. Note also his careful citing of other allies: he does not want to make this all about Britain delivering lectures.

By way of contrast, here is what Mr Cameron said about using the crisis to refashion Britain's relationship with Europe last month, as he urged MPs not to support a motion calling for a three-way referendum on Britain's ties with Europe, offering the choice of in, out or renegotiate the relationship:

Fundamental questions are being asked about the future of the eurozone and, therefore, the shape of the EU itself. Opportunities to advance our national interest are clearly becoming apparent. We should focus on how to make the most of this, rather than pursuing a parliamentary process for a multiple-choice referendum. As yesterday's Council conclusions made clear, changes to the EU treaties need the agreement of all 27 member states. Every country can wield a veto until its needs are met. I share the yearning for fundamental reform and am determined to deliver it. To those who support today's motion but do not actually want to leave the EU, I say this: I respect your views. We disagree not about ends, but about means. I support your aims. Like you, I want to see fundamental reform. Like you, I want to re-fashion our membership of the EU so that it better serves our nation's interests. The time for reform is coming. That is the prize. Let us not be distracted from seizing it.

Tonight's speech at the Mansion House is not just more pragmatic. It is a direct pitch, among other things, to Germany, whose chancellor Angela Merkel has told Mr Cameron that she would strongly prefer to decide the future shape of Europe by agreement with all 27 nations, and not just within the 17-member euro area. Mrs Merkel wants to have all 27 at the table because she wants support for German ideas about fiscal rigour and the need for greater competitiveness from the ten countries that do not use the euro, such as Britain, Sweden, Denmark, Poland and the Czech Republic. The German chancellor does not want to be left alone in a room of 17 countries that use the euro, because to quote the words of one senior German official to an Italian colleague, "at 17, the dose of the Club Med is a little too high for us." British ministers do not want the euro area members caucusing together without Britain, in advance of big decisions.

Mr Cameron is to fly to Berlin later this week to make his pitch to Mrs Merkel that Britain is still a key ally. On Thursday, a group of British ministers are to visit Brussels to discuss ways of deepening the single market and promoting a more open, outward-facing Europe with the president of the European Commission, José Manuel Barroso.

In short, Mr Cameron takes the risk of British marginalisation seriously, and is facing down his most zealous Eurosceptic MPs. None of that means that reform of the EU is a done deal. Many British governments have vowed to engage constructively with Europe and been disappointed and frustrated. Membership of the EU is very often maddening. But, on balance, as Mr Cameron correctly noted tonight, the alternatives for Britain are worse. That is the real message of his speech tonight.