Paterson’s EU strategy – leave first, ask questions later

Jonathan Lindsell, 25 November 2014

Yesterday former environment secretary Owen Paterson told Business for Britain his EU views. On the premise that the Eurozone will inevitably require greater integration until it becomes one effective country, Paterson argues the status quo is not an option: we will either be strong-armed into the Euro, or ‘they will leave us’.

Bearing this in mind, Paterson claimed bolder tactics should be taken in pursuing the Conservatives’ strategy of renegotiation and referendum. He contended that, if David Cameron wins a majority in 2015, he should immediately activate the Lisbon Treaty’s Article 50, notifying the EU of intention to leave. This article then allows a two-year window for hammering out ‘an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.’

Paterson argued this treaty-enforced exit negotiation was the best gambit for getting what the Conservatives want, as it would send other European states a clear message of intent, and because it’s cleaner and faster than an intergovernmental conference process or ‘everyday business’ reform, both of which could drag and are hard to quantify to the public. Formerly famous mainly for failing to kill badgers, Paterson endorsed the ‘Norway Model’ for a stripped-down, politics-free European relationship that retains access to the single market. (This is also known as the EFTA-EEA option). His assessment is thoughtful – he points out how Norway has more influence than Britain in many of the international standards-setting bodies (WTO, G20, IPPC, WHO, Basel etc.) that sets the global agenda before Brussels to write up.

However, Paterson’s tactic will raise eyebrows. Under his scenario, the 2017 referendum will cease to be between ‘reformed EU’ and ‘exit’, because we will have already left. Instead it will between the ‘Norway option’ (usually seen as ‘out’) and ‘EU re-entry’, which Paterson admits would probably mean re-entry without our current rebate, opt-outs or Euro immunity. It would, in other words, be a choice wherein one option is committing to a settlement of which even current pro-Europeans are deeply suspicious. They might argue Paterson was committing the same offence he often accuses Brussels of – acting without democratic legitimacy, leaving the EU without an express mandate.

Strategists in CCHQ may also dislike the plan. Cameron’s current argument is that no-one should go into a renegotiation assuming they won’t achieve success and have to leave. Paterson’s ploy also puts negotiations under huge time pressure, which might work for a Norwegian blueprint, but flounder if the Foreign Office aimed to limit migration. Norway has more EU migrants per capita than Britain.

Article 50 is usually seen as powder better hinted at, used as a threat, but kept dry unless either the EU’s other states refuse to seriously engage with reform, or later if the UK public clearly votes ‘Out’. Setting it off too early might terrify otherwise-cooperative European allies, forcing them to prepare contingencies and ‘red lines’ for actual Brexit rather than focussing attention on constructive EU-wide reform.

It isn’t actually clear the Eurozone will coalesce into a Berlin-dominated superstate. The inner core looked like it would in late 2012, but since then the ECB and Commission have proven adept at coercing insolvent states to reform, all without any additional treaty of unification. There are many new bodies to make the Euro robust – banking stress tests, the €500 billion Stability Mechanism, the Fiscal Compact. Dutch finance minister Jeroen Djisselbloem argues 80-90% of Eurozone integration can be done without treaty change, while pro-Europeans contend a ‘two-tier EU’ is possible, with states like Poland, Denmark and Britain protected, but allowing the Euro core to integrate further.

In that case, Paterson is jumping the gun. His proposal is certainly worth discussing, worth bearing in mind, but it’s too bold for the Prime Minister to endorse yet. The message that ‘Britain wants out’ would be too strong. However, a dynamic Tory grandee raising Article 50 as a serious option, immediately before Cameron makes his big migration speech, cannot hurt.