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SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MAY 17 • 2015
Almost two and a half
years ago, Prime Min-
ister David Cameron
of Britain sought to
pacify his Tory
Eurosceptics and keep
the insurgent UK Inde-
pendence Party at bay
by promising an in-or-out referendum by the
end of 2017 on Britain s membership of the
It worked. The election on May 7 barely
featured Britain s vexed relations with the EU.
The UKIP won only a single seat, while
Cameron earned an astonishing---if small---
Now the bill falls due.
The referendum is winnable. During the
next year or so, Cameron and Chancellor of
the Exchequer George Osborne can probably
extract enough from their partners in Europe
to persuade Britons to vote to stay in.
That victory must be only a first step, how-
ever. The real agenda, the one that matters to
Britain s prosperity and to the EU as a whole,
will take longer to bear fruit. It also will demand
a more sustained effort than Cameron so far
As the economy and Scottish secession
threatened to wreck Cameron s first term, so
Europe looms over his second. No issue riles
his party like the EU, on which Tory opinions
range from sceptical to head-bangingly furious.
If Britain votes to leave the union, it also will
end up outside the European Economic Area,
the world s largest trade bloc, which is governed
by EU-set rules.
A country which concludes that EU mem-
bership is an unreasonable infringement of its
sovereignty surely would balk at taking orders
from a club it recently had voted to leave. For-
eign investors would put their money else-
where, and Scotland might well vote to break
away from the United Kingdom.
Much energy will be expended telling
Cameron how to win the referendum. Tactics
change, but even now it makes little sense for
him to wait until 2017.
By then Britain s government may well be
in a midterm funk, and both France and Ger-
many will be holding elections and thus less
likely to give ground. Besides, a long period
of uncertainty would be bad for business.
The prime minister also should stop prom-
ising to amend the EU s treaties before 2017,
as though this were a yardstick for measuring
his seriousness. There is neither the time for
that nor the willingness in the Europeans to
enter into what would be an arduous procedure.
He could limit himself to scoring some populist
victories, such as limiting immigrants access
to welfare and making it clear that the EU s
formal commitment to "ever-closer union"
does not apply to Britain.
Even if they sway a few voters, however,
such changes ultimately are trivial. The problem
with trying to deal with populist gripes is that
another one is always right around the corner.
The Tory party has been plagued by divisions
on Europe for decades. Partly because of that,
Britain recently has failed to get the best deal
for itself in Brussels.
Cameron really should be aiming beyond
the referendum, to long-term reforms that
would benefit the EU as well as its most iras-
That larger task entails work on three things.
First is the single market in services. The
bosses of Britain s successful services com-
panies complain of obstructions on the con-
tinent. Only 37 per cent of British services
exports go to the EU, compared with 49 per
cent of the nation s goods exports and thus,
as the economy tilts toward services, the EU
seems less worthwhile. Completing the single
market in services will take longer than a year
or two, but it is vital to establish progress in
Others expect Britain to lead on this and
would welcome its efforts. Britain largely cre-
ated the single market, back when it was seen
not as too detached but as too influential.
In the same vein, Cameron should back the
efforts of Frans Timmermans, vice president
of the European Commission, who is working
to cut business regulations and transfer powers
to national parliaments. By the time of the
referendum, Cameron ought to be able to
claim some successes. If he continues after it,
he could chalk up many more.
All European leaders, Cameron included,
need to answer the question of how the EU
will function now that most of its members,
but not Britain and eight others, share a cur-
Ways must be found to prevent caucusing,
the rigging of negotiations in advance by euro-
zone economies which have enough votes to
force through decisions without the say of
non-euro countries. That would be a recipe
for the EU s breakup. Europe s banking union
shows that the euro zone can come up with
institutions that do not threaten other coun-
tries. Now, before caucusing has begun, is the
best time to find rules to prevent it.
Cameron can get things done in Europe.
His surprise election victory makes him seem
stronger, so at the least the other leaders know
that they must deal with this glossy Englishman
and his referendum. It also makes him more
resilient against domestic political attack, for
a while anyway.
However, his success also depends upon an
inconvenient fact: More single market requires
much more EU regulation. Britain can extend
the market only if it becomes a fully committed
partner in the club, rather than an absentee
@2015 The Economist Newspaper Ltd.
Distributed by the New York Times Syn-
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