What does the government claim it wants to do?
The government has stated it wants fairness across all 28 member states when legislation is implemented. It wants to ensure the single rulebook accommodates all and is fair for both eurozone and non-eurozone countries.
It believes that it is in their interest that the euro is a strong currency, so wants to support the eurozone as it undertakes necessary further integration. In return it wants an agreement on a defined relationship between the eurozone and the United Kingdom, and other non-eurozone member states, to protect the single market in ensuring it is fair and stable for all.
What does this really mean?
The government is not seeking a member state veto mechanism as some seem to suggest. It appears that David Cameron is trying to ensure there is no ‘two-tier’ system for Europe between the eurozone and non-eurozone countries.
Securing safeguards for the single market for non-eurozone members and restating a European Union-wide political guarantee to a union which works for all its members could be achieved with an agreement on uniform supervisory practices to avoid divergence between member states.
However, if there were any proposal to extend powers to the EU which would see the eurozone benefit disproportionately through further integration, treaty change would be required. We are told treaty change would not be possible before 2017.
Non-treaty solutions include inter-governmental treaties; however, these are limited in a legal sense as anything substantial would require formal treaty change and there is a general view among member states to oppose this.
The bottom line is that, until Cameron sets out exactly what he hopes to achieve, it is practically impossible to say what changes could be negotiated. We are told the commission want to accommodate the UK’s requests as far a possible but they need to have a clear idea of what is wanted and it has to be acceptable to the other member states and indeed the European parliament.
What would achieving this mean for the UK?
The single market is protected by EU laws in which the free movement of goods, persons, services and capital is ensured. Protection of the single market would be of huge benefit to UK business as over half of our trade is with other EU member states.
The UK would also benefit from increased financial stability in the eurozone which in turn would support the global trading role which Britain aims for. A clear agreement between eurozone and non-eurozone countries would strengthen the UK within the world.
Plus, the UK would be able to continue shaping rules affecting its vital financial services sector by maintaining its involvement in EU policymaking.
What would achieving this mean for the EU?
The UK is not alone in believing the EU needs reform and here lies the opportunity for other member states to use the UK’s negotiations as a vehicle for their own benefit too. The EU is in a position to propose changes to the way it conducts its business during this process.
The citizens of all EU member states would benefit from a restructured EU. An agreement on the balance of interests between eurozone and non-eurozone states will help create a focus on coordination and cooperation going forward. The proper functioning of the single market is vital to all of the 28 member states.
Such an agreement, helping to keep the UK in the EU, is also of importance to the union as a whole. The UK is the EU’s second largest economy and among the globes’ top financial centres. The UK’s political strength also helps keep balance within the union.
What should Labour do about it?
One of the reforms Labour wants to see is the recognition that the EU must work for those countries which are, and will remain, outside the euro. Many countries outside the EU invest here because we are a gateway to Europe. And, as a non-euro member, we have all the advantage of our own currency, but we still get full access to the single market with 500m consumers across Europe.
If Cameron cannot achieve this, it is a failure on his part. However, it would not be a reason to leave the EU. Europe is by far our biggest export market and to continue to have a say over how the EU operates is vital for our economy. But, if Cameron were to secure the non-eurozone recognition he seeks, I feel Labour should support him – provided we are comfortable with the details.
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Catherine Stihler MEP is vice-chair of the European parliament committee on internal market and consumer protection. She tweets @C_Stihler_MEP
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