Foreign Affairs CommitteeWritten evidence from Sir Colin Budd KCMG
Summary
The December European Council not necessarily a watershed for UK/Europe, but an important wake up call.
For the UK voluntarily to accept demotion from the top European tier would be a huge strategic error. On the contrary, we should wherever possible ensure that we are part of its leadership.
To maximize our leverage in EU policy making, the whole of UK plc must apply itself to that task, with energy, imagination and unceasing effort.
If we fail to wake up, we will increasingly find that we are living in Britzerland.
We can and should do better.
Introduction
The writer was a member of HM Diplomatic Service from 1967–2005, serving in Warsaw, The Hague, Bonn and Brussels. He was Assistant Private Secretary to Geoffrey Howe, then Foreign and Commonwealth Secretary, from 1984–87; Chef de Cabinet to Leon Brittan, then Vice President of the European Commission, from 1993–95; Director General for Europe in the Foreign and Commonwealth Office from 1997–2001; and Ambassador to the Netherlands from 2001–05.
Background
1. Sir Percy Cradock, who from 1983–90 was Margaret Thatcher’s foreign policy adviser, once observed that the story of British European policy since 1945 had to an alarming extent been one of “mistaken assessments and missed opportunities, a depressing chronicle of delayed awakening to reality, of belated arrival in institutions fashioned by others, of repinings, second and third thoughts, divided counsels and qualified enthusiasms, and a general confusion of policy designed to achieve maximum pain and minimum influence”.
2. To ask about the impact of the December 2011 European Council on the UK’s policy towards and place in the European Union (EU) is to beg the question: what should that policy and place ideally be? If as a nation we want to avoid simply continuing the lamentable story so pithily summed up by Cradock, we need to think clearly about this.
3. The policy of the present UK government, as laid down in the Coalition Agreement, is that this country should play a leading role in the EU—in order (inter alia) to ensure that “all the nations of Europe are equipped to face the challenges of the 21st century”.
4. What that, quite rightly, implies is that European countries can meet those challenges more effectively if they stand together than they could on their own. But there is more to the story than that.
5. The underlying logic of EU membership for the UK, for those who support it, has always in essence rested on two perceptions:
(i)
(ii)
6. Why is EU membership to our advantage? Partly for economic, and partly for wider reasons.
7. The economic case in favour is very well trodden ground. It rests on full access to the Single Market, with its many implications for profitability and employment; on the magnetism of the EU for foreign direct investment; and on the huge clout the EU has in world trade talks. The UK badly needs Europe to be economically strong, open to free trade, and prosperous. The best way to maximize the chances of that is for the UK to be influential inside the EU.
8. There are also numerous wider benefits—including the ability to travel, live and work anywhere in the EU, the scope the EU affords for action to improve the environment, and the forum it provides for more effective cooperation over crime and justice matters.
9. Above all, there is the wider strategic imperative: the whole question of how in the 21st century to maximize the UK’s global influence and authority, in a world in which so many of the key problems cross national borders. As a member state in the EU the UK exercises far greater influence internationally than it could on its own. The more we fall out of the key EU decision-making circle, the more that will undermine our political relationship with the United States and reduce our influence in many international fora.
10. If we want to maximize our prosperity, trade and employment rate, if we want our own continent and the world to be safer and greener, if we want to be as influential as possible in world affairs, there is simply no option but for the UK to be an active and leading member of the EU.
11. It follows that unless there is a compelling case, given the national interest, for standing aside from any particular policy proposal, we should in all circumstances aim to exert as much influence as possible on the decision-making process inside the EU.
12. It was with that analysis in mind that the outcome of the December 2011 European Council left many UK observers with a considerable unease. Far from strengthening the UK’s position in Europe, there is accumulating evidence that this has reduced our capacity to influence future EU legislation in the areas it covered—which by common consent are of very great importance for this country. Though there is much left to play for, there must be a strong probability that by the time future policy proposals in the areas in question come to ECOFIN, where the UK will still be present, the outcome of ECOFIN discussion will in effect have been predetermined—by decisions in the prior caucusing of the member states committed to the fiscal compact.
13. The key dilemma for the UK, when it comes to questions of EU institutional architecture, is that the more we choose to stand aside from the evolving process, the more it will tend to evolve in directions and ways which do not suit our interests, while continuing to impact very directly on those interests. Eurosceptics may want us to roam the globe, untethered by Europe. But whatever their dreams, we will still be 22 miles from the European mainland, and profoundly affected by the way the EU is organized.
Response to the FAC’s Questions
14. The FAC asks what institutional architecture the UK should seek for the EU, and whether the UK should embrace the idea of an EU made up of two or more tiers. That directly raises the question of what on any such analysis would be the right tier for the UK to be in. The answer plainly depends on how far we want in future to be counted among the leaders of Europe, rather than the followers.
15. Germany and France will continue to lead, and will tend always to look to each other first—bound as they are by the 1963 Elysée Treaty to arrive, “on all important policy questions, insofar as possible, at a similar position”. Along with the leaders of the key EU institutions, they will tend to dominate any European top tier, however much they may disagree on many of the substantive issues.
16. If the UK wishes to maximize its influence in Europe, it has much scope for exercising as much influence as and sometimes more than Germany and France. So long as we remain in the top tier, then in the future as in the past, when either Germany or France disagree with the other, they will often seek support from the UK, thus giving us real scope for influencing the outcome in question. In addition to which, if we cultivate as we should our natural allies on each issue among the other member states, we can in any case often build up a strong bargaining position. But to the extent that we fall, voluntarily or otherwise, outside the top European tier in any given field, there will be an inevitable reduction in UK leverage and influence, often to our disadvantage.
17. We need in this connection to beware of the incremental effect of the widespread and increasing assumption in the rest of the EU that the UK perspective, when it comes to considering the future of Europe, is of less and less importance.
18. The potential danger to which the UK needs to be alert, in assessing the impact of the new “fiscal compact” treaty, is that in other areas too the notion will take hold that in the construction of the key deal the UK does not have to be involved from the start, but can instead be presented later—as now happens routinely to Switzerland—with a series of faits accomplis. Our rights under the Treaty, where unanimity is required, of course still provide us with real protection, but there is nonetheless a clear and significant difference between being one of the prime movers in the power dynamics of the EU, from the beginning of any discussion, and simply being presented with an already constructed package, which by that stage has become much more difficult to amend.
19. There is little solace to be had, even when we are right, from any situation in which we end up, as most recently in the context of the EU’s implementation of the Basel III rules on banking regulation, isolated 26–1. If we find ourselves in that position, the strong likelihood is that we have in one way or another misplayed our hand—especially if it is clear that a number of the 26 in fact share our analysis.
20. Thus at the time of last December’s European Council, it was plain that a number of other member states had real sympathy for aspects of our position—but we tabled our proposals and started to look for allies so late in the day that it proved impossible to build the alliance in our favour which would have greatly strengthened our position. The way the UK played its hand, in response to all attempts to agree the fiscal compact unanimously, and within the existing treaties, was in some respects understandable but on any analysis weakened our overall position in the European Union. The outcome of the December European Council, it is increasingly clear, in the eyes of many observers in the rest of Europe as well as in the UK strengthened the perception of a binary division between the UK and the rest, and opened up speculation about the more formal establishment of an explicitly two tier system.
21. It would certainly be better if the fiscal compact could still be incorporated in the treaties—provided the UK position were adequately safeguarded—because the UK would then be able, in an area of such cardinal importance for its interests, to play a full role in all relevant EU discussion. As far as possible, all future framework policy statements should be agreed by all 27 member states.
22. There will always be instances in which the strength of the UK interest in a particular policy line is such that we may prefer isolation to dilution of our own proposals—but there is a strong case for reducing their number to the absolute minimum, to avoid as far as possible our being forced de facto to live with policy outcomes affecting our interests which have been shaped and decided by others. How can we best seek to achieve that?
23. To keep the UK in the forefront of European decision-making will require, in addition to the necessary political commitment, first class planning and a clear and sustained determination to use to the full the networking and other assets we have. What are those assets?
24. We start with the benefit of the growing strength in Europe of the English language. It would be bizarre indeed to accept demotion from the top European tier just when our language is increasingly the lingua franca of our continent.
25. We have, and need to use to the full:
bilateral links to the 26 other member states of the EU, which need to be nurtured constantly by all Ministers with EU-relevant business;
and a policy coordination system the envy of our European partners (Jacques Delors, when President of the European Commission, went on record as saying he considered the UK’s system to be the best in the EU). If used sufficiently far in advance, that system will tend to maximize our chances of securing, in any given case, at least a significant proportion of our objectives. If we continually reinvest in keeping it well oiled, and in first class working order—which requires (i) optimal coordination between the Cabinet Office, FCO and UKREP Brussels; (ii) effective EU coordination sections in other Whitehall Departments, and (iii) full involvement and use of our Embassies in other EU member states.
26. We also have, but have so far only fitfully chosen to play, a potentially significant role in the developing European polity which is, like it or not, part of the way today’s European policy-making game is played.
27. Both Government Departments in London and our political parties need to understand the significance of the evolving pattern of party politics on a European scale. Important in part, clearly, because of the European Parliament’s position in the EU, but also because of the prior caucusing of the party leaders before many European Council meetings which has now become a routine part of political life in the EU.
28. Our Government Departments need to make a much greater effort to engage with the MEPs, from all countries, who are active in their policy areas. All our political parties need in the national interest to ensure that they are playing an active role in intra-European dialogue, and in particular that their weight is felt in intra-party debate at the European level in the run up to key meetings of the European Council. In this respect, for instance, the Conservative Party’s decision to leave the European People’s Party has in effect meant that in recent meetings of the EPP leaders from the EU member states—such as that at Marseilles just before last December’s European Council—the UK voice has gone unheard, sometimes at tactically very important moments.
29. Another weakness in our position is the alarming decline in recent years in the number of UK nationals securing posts in the EU institutions: in the most recent EU-wide competition, fewer than 3% of the successful candidates were from the UK (which has some 12% of the EU’s population). This needs urgent attention, otherwise 15–30 years from now it will come to haunt us. In the real world, all EU member states rely significantly on the nationals they have in the EU institutions as part of their collective networking strength, and it makes no sense for the UK not to push hard to ensure that the playing field is made level. There is a strong case, which the FAC may wish to consider, for a substantial remedial package—including more training, especially in foreign languages, and agreement across Whitehall that the UK needs to send to Brussels some of its best and brightest civil servants.
30. One obvious test case in the offing for the UK’s ability to remain constructively engaged in the EU inner core discussions is the subject of growth, and the issue of a potential growth compact to match the fiscal compact. Here the UK will plainly want an outcome to EU debate which takes the fullest possible account of the UK interest. Equally obviously, some other participants in the discussion may tend to emphasise questions on which they are not at one with HMG—but there will certainly be some member states in broad agreement with the UK. The question of growth and how best to stimulate it should very clearly not be left solely to the euro area. It is much to be welcomed that the UK has been to the fore in the so-called “Like-Minded” group of member states, which since well before the French Presidential election has been stressing the strength of the case for action to help boost economic growth in the EU.
31. Another test case will be the forthcoming discussion of the EU budget. There we can either establish a purely defensive position, and just sit tight, determined to be inflexible, leaving the shape of the final package to be created by others—or apply ourselves proactively, while still of course pulling no punches about the importance of the UK interest, to the task of working hard at the core of the EU’s debate on the subject, using all the arguments we can, to help forge an outcome which can be seen as acceptable to all.
Conclusions
32. Last December’s European Council does risk becoming a watershed for the UK’s place in the EU, but that is by no means inevitable.
33. To conclude that the UK should now favour a much looser arrangement for the future institutional architecture of the EU, whereby we would take up a position somewhere outside a new core Europe, would be a fundamental misreading of the UK national interest.
34. Certainly the UK must continue to fight its corner in relation to the fiscal compact, but our strategic approach should continue to be to do all we can to shape the evolution of future European policy.
35. In pursuing that strategy we need always to remember that in the modern European Union outcomes are increasingly shaped and predetermined away from the formal negotiating table. The race tends to go to the proactive, well organized alliance-builders, who maintain effective networks and plan their approach to each issue well in advance. Last minute initiatives of the kind the UK tried immediately before last December’s European Council are unlikely to prosper. The UK has in ample measure the skills needed to build effective alliances in Europe, but we need to ensure that we both maintain them and use them, early enough in the game to have a chance of achieving our objectives.
16 May 2012