Crossroads Europe

Jean Claude Juncker may be on the verge of a compromise. But, what does it mean for the European project?

Two weeks ago, Jean Claude Juncker, the President of the European Commission, stated that he is ‘quite sure’ Britain and the EU will reach a deal on Cameron’s renegotiation demands at the February summit. Speaking at a press conference, Juncker said he is neither optimistic nor pessimistic about negotiations, but recognises the need for Europe to “deliver”. The President of the European Commission has given the strongest hint so far that an agreement to possibly avoid a ‘Brexit’ should be reached sooner rather than later and he might be right to do so.  The latest Survation opinion poll published by the Mail on Sunday showed that a majority of British voters (53%) would opt for leaving the EU, whereas only 47% want to stay. Only a few weeks earlier, opinion polls have shown a majority for the “in” movement.

The Eu Commission’s president needs to make commitments to convince the British public that it is worth ‘staying in’. He is well aware, however, that it will be tough, if not impossible, to reach an agreement on all items on London’s wish list. Particularly challenging will be Britain’s demand to ban in-work benefits for EU migrants for the first four years of working in the UK.  Most notably member states from Eastern Europe, such as Poland, are continuing to fight against limitations on freedom of movement and curbs on benefits, which for many Poles is one of the biggest perks of their EU membership.

The two biggest member states, Germany and France, however, are keen to keep Britain in the EU. So keen, in fact, that they might be willing to support the British demand for a stricter welfare policy. German Minister for employment, Andrea Nahles, and her French counterpart Myriam El Khomri stated in an interview with the newspaper ‘Frankfurter Allgemeine Zeitung’ and the magazine ‘Les Echos’ that they are “willing to find solutions to the question of in-work benefits for EU migrants.”. They added that in their opinion there are indeed “gaps in the regulation concerning the avoidance of giving migrants wrong incentives”. The French and German governments might therefore combine concessions to the British renegotiation demands with their own interest in reform of welfare policy, which might turn out to be a huge advantage for Britain at the negotiating table.

The other demands on Cameron’s renegotiation checklist, including an exemption from the commitment to an “ever-closer union”, protection from Eurozone integration and an improved competitiveness, seem to be much easier to achieve. The demand for a cutting of “red tape” is part of Juncker’s own agenda and most member states agree with the protection of the single market for non-euro countries with the exception of France, who believes that London merely wants a veto to block new financial regulation.  There will be a few objections to the demand for an exemption from a commitment to an “ever closer union” but most member states regard this issue as merely symbolic and European leaders have acknowledged that not every state has to pursue this objective at the same speed. Overall, issues are therefore sensitive but not impossible to solve.

However, even if a timely agreement between the EU and Britain can be reached, it is still questionable, whether this will suffice to convince voters to say “yes” to the EU at the ballot box. One of the biggest factors impacting the referendum might be Europe’s continuous struggle to solve the refugee crisis, which hangs like a sword of Damocles over the European community. The majority of member states refuses to take any (more) refugees and increasingly trades the European idea back for national sovereignty putting the European Union to a hard test. Council President Donald Tusk even warns of a breakdown of the European Union, should the crisis not be solved within the next two months.

However, David Cameron recently stated in Davos that he is “not in a hurry” and would rather fight for the right deal. But would British voters want to be part of a European Union that is already beginning to fall apart from within? Indeed, even if the refugee crisis could be solved by  member states agreeing on taking a fair share of migrants, might that just further deter voters from staying in the EU particularly post-cologne?

The UK is standing at a crossroads. At this point the result of the referendum is uncertain and might considerably depend on the political situation within the European community at the time of the referendum. David Cameron is probably right not to agree to a deal that is not significant enough to convince voters to give the EU ‘another try’, however, if he waits too long the outcome of the renegotiation debate might not even matter that much anymore.