EU ‘northern alliance’ still rooted in British wishful thinking

Amid the chatter surrounding German chancellor Angela Merkel's visit to London on Thursday was speculation about British prime minister David Cameron recruiting the German leader to a burgeoning EU "northern alliance".

Together with the Netherlands and Nordic members, so the thinking goes, Britain and Germany are member states with similar economic traditions who could push deep EU reform past the so-called "Club Med" countries. But is such a construct a real possibility? Cameron believes he has found a kindred spirit in Mark Rutte, the Dutch prime minister. In recent months Rutte has argued that, in the EU's pursuit of growth, jobs and stability, less is often more.

Two weeks ago in Brussels, with outgoing European Commission president José Manuel Barroso looking on, Rutte said the EU would "function better if it concentrates on its core tasks . . . and by reducing the unnecessary regulatory pressure".

At first glance this chimes with Cameron’s views, not to mention Merkel’s call in London for a fresh look at European subsidiarity – the who- does-what rule book between Brussels and member states. In her speech Merkel also gave a nod to British and Dutch thinking on migration, acknowledging the need to strike a new balance between freedom of movement and citizen acceptance of migration. Finally, she highlighted the foundation stone of any would-be “northern alliance”: the shared view that a robust single market and improved economic competitiveness are Europe’s best insurance in a globalised world.

When it comes to the detail, however, Merkel parts company with her potential allies. She opposes plans to limit free movement while her demand for “limited, targeted and speedy” reform was not directed at the wider EU – where Cameron needs it – but the “treaty basis of the economic and currency union”.

"Her reform focus is clearly on the euro zone," said Almut Möller, European analyst at the German Council on Foreign Relations (DGAP). "I wouldn't see much chance for a northern alliance and it's quite brazen of the British to suggest they have Germany behind them on this." Her scepticism is shared by Jan Techau, director of the Carnegie Europe think tank in Brussels. "Merkel wants treaty reform to rescue the euro, that means more Europe, Cameron means treaty reform for less Europe to pacify backbenchers," he said.

Reform
Still, German analysts don't dismiss entirely the prospect flagged by the Dutch and British leaders of "third way" EU reform, located somewhere between established methods of quick-fix, small-scale tinkering and full-scale, slow-moving treaty reform. "I do think Merkel is trying, out of her own interest, to reframe the European debate in Germany towards political content and away from traditional thinking about treaties," said Möller. "She is the first chancellor who understands that the time has passed to fundamentally reshape the system. Changing attitudes to reform is the real issue."

Berlin could be supportive of an Anglo-Dutch drive to prune back European regulation, if it speeds up euro integration. But even Dutch reform demands may prove less ambitious than what Cameron needs: treaty change to allow repatriation of powers. In Rotterdam 10 days ago Dutch foreign minister Hans Timmerman called for EU institutions to abandon their "Brussels virtual reality" to focus on major ensures and consolidate deals already agreed. But he sees "no need" to rewrite the treaties. Instead a five-year "political deal" would be sufficient, said Timmerman, to strike a new, productive division of labour between EU institutions and members.

For the Dutch foreign minister it seems the reform debate is about giving the EU "greater purpose" and "concrete results" – not about threatening to leave. Quoting Michael Heseltine, Timmerman added: "A man alone in the desert is sovereign. He is also powerless."

Given these differing views on EU reform, it will be interesting to see if a “northern alliance” to prevent a British exit becomes reality or remains London wishful thinking.