Transatlantic Take

On May 7, Prime Minister David Cameron’s Conservative Party won a majority in the United Kingdom’s general elections. With a new political mandate, Cameron is expected to attempt to renegotiate the terms of Britain’s membership of the European Union and push for an “in/out” referendum on Britain’s membership by 2017. How do other European states view these developments? The German Marshall Fund’s experts based in Brussels, Berlin, Paris, and Warsaw weigh in on the implications of the U.K.’s renegotiation with the EU, discuss what terms might be feasible, and identify some of the implications of a so-called “Brexit.”

Michael Leigh

BRUSSELS—The Conservative Party’s victory in the U.K.’s May 7 general election reflected Prime Minister David Cameron’s record in government, especially the improvement in the economy, his hard-hitting messages, and the disarray of the opposition. A victory by the opposition Labour Party would have led to Cameron’s replacement as leader of the Conservatives by a more euro-skeptical politician.

Instead, Cameron has received the backing of his party for his election pledge to negotiate a new deal for Britain in the EU, to be followed by an “in/out” referendum to endorse it. The prime minister, the Labour Party, the Scottish National Party, rump Liberal Democrats, and much of British business would argue in favor of continued membership ahead of such a referendum. Opinion polls are showing a ten-point lead for those favorable to continued membership. So at first sight, the prospects for Britain remaining in the EU are good.

However, this scenario is far from certain. Cameron’s demands, including immigration control, the right to limit access to social benefits by foreign workers, , and the repatriation of certain powers to national capitals, will meet stiff resistance from other member states. Central European governments have declared their opposition to any limitation on the free movement of workers. German Chancellor Angela Merkel and French President François Hollande share some of Cameron’s reform goals on immigration, the single market, and labor law but will not pay any price to keep Britain inside the EU.

The greatest threat to Cameron’s strategy and to continued EU membership comes from his own party. Cameron’s tiny House of Commons majority of 12 seats will be whittled down by by-elections, desertions, and deaths. Up to 60 Conservative members of parliament would vote against continued EU membership in a free vote. Their numbers will probably grow. Many Tory MPs and voters want to leave the EU and do not care about renegotiation terms or the possible reaction in Scotland.

If Cameron’s strategy for keeping Britain in the EU is to succeed, he must act on two lessons from the past. First, he should negotiate a reform package quickly, preferably by the end of 2015, before his popularity has eroded. This should be followed by an early referendum, in 2016 not 2017 as announced. Secondly, he should not confront other member states with red lines that they cannot meet. Many of his demands can be accommodated through political deals under existing rules. Any call for treaty change, anathema in countries where this would require perilous referenda, should be put off until after the French and German elections in 2017.

If he bears these lessons in mind, Cameron can probably count on the electorate’s common sense, economic self-interest, and fear of the unknown to deliver a vote for Britain to stay in the EU. Washington should be supportive and should work for early breakthroughs in negotiations for the Transatlantic Trade and Investment Partnership, furnishing another reason for Britain to remain within the EU.

Sir Michael Leigh is a senior fellow with the Transatlantic Academy, an initiative of the German Marshall Fund of the United States in Washington, DC.

Daniela Schwarzer

BERLIN—Ever since British Prime Minister David Cameron announced in January 2013 that he would hold a referendum on a renegotiated British EU membership agreement, Berlin has been a top destination for British policymakers and diplomats intent on exploring what renegotiated membership might look like. Given Germany’s increased weight in European policymaking, France’s current weakness, and Poland’s preoccupations with upcoming elections, Cameron will have to give this conversation priority if he wants to place the question of EU membership before British voters by 2017.

The good news for London is that the German government has a strong interest in keeping the U.K. in the EU, especially for economic reasons. The U.K. overtook France as the second-largest economy in the EU in 2014. But Britain is not only a market in Berlin’s eyes. Like Warsaw, Berlin sees the U.K. as a strong proponent of the single market and a country that traditionally subscribes to the idea that competition rather than political interventionism is a driver for innovation and growth. There is therefore some sympathy for Britain’s push for the EU to cut red tape and do less, in particular because the German domestic debate now includes a euro-skeptic voice with the right-wing populist party Alternative für Deutschland (AfD). There are, of course, differing traditions of macro-economic thinking, and Britain’s foreign policy tends to be closer to that of the United States or even France. But as the U.K. is not anywhere close to joining the euro, these differences are not a major concern for the Germans, who continue to view economic growth and fiscal policy predominantly through a neo-classical lens and spend enormous amounts of political energy on making sure the eurozone follows this paradigm.

The foreign and security aspect of Britain’s role in the European Union is also important to Berlin. Germany itself has become more active in these arenas, including as one of the primary EU negotiators with Russia, along with France. The German government has decided to strengthen its crisis anticipation and management capacities and has reaffirmed its commitment to a strong rules-based order, both in Europe and globally. From Berlin’s perspective, an EU that includes the U.K. is needed to pursue these priorities. A situation whereby the EU’s foreign relations are largely determined by the Big Three of France, the U.K., and Germany is preferable to a Franco-German approach. This, however, requires the UK to be more proactive than of late.

Germany also understands the symbolic value of Britain remaining in the EU. The acrimonious exit from the EU of such a large member state would be a huge blow to the EU’s credibility just as the Union and Western values more broadly are being increasingly challenged, notably by Russia. Britain’s exit would comfort euro-skeptics that claim the EU is unable to reform.

But there are limits in substance and style to what Germany believes is acceptable. Berlin is as sensitive to being pressured as it is about populist politics. The idea of cutting red tape and deepening the single market will certainly gain traction in Berlin, as will some restrictions on so-called “welfare tourism.” But Berlin will not agree to weaken the free movement of people in the EU. There are also concerns that negotiating treaty amendments without a clear mandate could produce a result that cannot be ratified by all 28 member states. Despite its strong interests to see Britain remain in the European Union, Germany will not cross every line to accommodate Cameron’s wishes.

Dr. Daniela Schwarzer is GMF’s senior director for research and director of the Europe Program.

Alexandra de Hoop Scheffer

PARIS— France would not want the United Kingdom to leave the EU despite its historical ambivalence toward Britain and their divergent views on Europe’s future. The United Kingdom remains a key partner, and many in France see it as a valuable counterweight to Germany. France, like many other member states, thinks that the union would be weakened by the loss of its second-largest economy, a global commercial power with significant military and diplomatic influence. However, Paris is critical of the British vision of an “à la carte” Europe designed to serve purely national interests and opposes any renegotiation of the EU Treaties.

French President François Hollande is prepared to consider British demands for EU reform and could accept changes that simplify EU procedures and cut red tape. Paris, however, is firmly set against any move to grant the U.K. opt-outs on issues such as the free movement of people, workers’ rights, environmental protection, or food safety rules. A middle ground could be found. On free movement of workers, for example, the EU could allow member states more scope to determine conditions for access to social benefits without a treaty change. France could support Britain on speeding up moves that are underway toward better regulation of the EU’s single market.

France and the U.K. differ about the EU’s role on security and defense. France had hoped that the 2010 Lancaster House Treaties — which pledged closer operational, military-industrial, and nuclear cooperation between Britain and France — would strengthen the EU as a strategic actor. The U.K., however, does not share this ambition, which it sees as potentially undermining NATO. Despite these differences, pragmatic Franco-British strategic leadership has enabled the first steps to be taken towards an EU Common Security and Defense Policy.

Military expenditure as a proportion of GDP has been declining in both France and Britain. But the U.K. appears more reluctant to project military power, after the wars in Afghanistan and Iraq. Britain now plays a modest role on many major foreign policy issues. On Ukraine, Berlin and Paris have taken the lead, at times in liaison with Poland. The British Parliament’s rejection of military action against the Assad regime in Syria to prevent the use of chemical weapons in August 2013 contrasted with the French government’s readiness to act.

France is perplexed by Britain’s absence from key foreign policy, security, and defense initiatives and is concerned that a British decision to leave the EU could accentuate this trend. By contrast, a British referendum vote to remain inside the EU would revive prospects for closer cooperation between France and Britain in a number of fields. Overall, Paris is likely, therefore, to seek accommodation with the U.K., provided this does not call into question any of the EU’s fundamental principles or require treaty change.

Dr. Alexandra de Hoop Scheffer is a senior transatlantic fellow and the director of the Paris office of The German Marshall Fund of the United States.

Michal Baranowski

WARSAW—British Prime Minister David Cameron’s decisive win in the general elections was seen in Warsaw as both surprising and largely welcome — as well as reason for caution. Britain’s EU membership is important for Poland for security and strategic reasons. At the same time, Poland is not willing to give Cameron whatever he wants in order to keep Britain in. Specifically, scaling back the free movement of people is going to be a red line for the Polish government, given that over 1 million Polish voters now reside now in the U.K..

If Europe is to ever develop a more substantial Common Foreign and Security Policy — which is important for Poland, given its dangerous neighborhood — the U.K.’s strategic culture and military capabilities are critical. Despite its diminishing defense budget, Britain remains one of the main European powers, and without it, a hope that EU can ever become a player in security and defense diminish. The U.K.’s departure from the EU would also have unwelcome consequences for NATO, where its voice would become less relevant, just as the peace and stability of Europe is being challenged by Russia.

An active, outward-looking, and confident U.K. firmly rooted inside the European Union is therefore clearly in Poland’s interest. Poland would be largely supportive of creating a good package of EU reforms that Cameron can sell at home as a success. But it will also have red lines in these negotiations — most notably the free movement of people. The rights of Poles residing in the U.K., if undermined, would easily become an issue in Polish domestic politics. The ability to freely move and work across the EU is one of the Union’s most cherished rights, and according to public opinion polls one of the top reasons for the popularity of the EU in Poland. The Polish government will have very little room to maneuver on this point.

This calculation, however, might change after parliamentary elections in Poland this fall. After all, the U.K. is not the only place capable of producing electoral surprises. Incumbent President Bronislaw Komorowski recently lost in the first round of voting against an opposition candidate, Andrzej Duda, despite public opinion polls predicting a slim — but healthy — victory. The second round of the vote will take place soon, and the outcome is far from determined. But no matter the final result, the vote has shown a desire among the Poles for change, and increased the likelihood of the opposition, the conservative and euro-skeptic Law and Justice (PiS) party, winning.

Such an outcome would have an impact on Poland’s place within the EU, and its position on negotiations with the U.K.. Two years ago, the U.K. approached Poland with an idea of creating a non-euro caucus within the EU. This idea was then rejected by the government of Prime Minister Donald Tusk, who is now president of the European Council. Such an offer might not be rejected by a PiS-led government. If power changes hands in Poland in the fall, the new government might be far more willing to accommodate Cameron, and in fact share some of his ideas on reforming the EU.

Michal Baranowski is the director of GMF’s Warsaw office.