Suzanne Lynch: All eyes on Britain’s demands as Brexit battle looms

A week after the Conservative Party stunned pollsters by winning an outright majority in the British general election, focus is now turning to the most significant fallout of the election – the forthcoming referendum on EU membership.

Chancellor George Osborne, who will take a leading role in the negotiations, arrived in Brussels on Tuesday, pledging to take a “constructive and engaged but also resolute and firm” approach in negotiations with the European Union.

Prime Minister David Cameron is expected to hold a series of bilateral meetings with EU leaders in various national capitals in the coming weeks ahead of the June EU summit, while he will also meet other EU leaders at next week’s Eastern Partnership summit in Riga.

Mr Cameron’s strategy on Europe since announcing plans for an EU referendum in his Bloomberg speech of January 2013 has undoubtedly lost him allies in Brussels as Britain has failed to come forward with specific demands for reform.

But while David Cameron may have squandered political capital, the will to keep Britain in the EU should not be underestimated. Last week’s decisive Tory victory has focused minds across Europe, as the British referendum has moved from being a party-political promise to a political reality.

The implications of a Brexit, and its ramifications for the entire EU project, would be enormous. Most notably, as one of only two EU members of the UN Security Council, Britain is a central player in European foreign policy, an issue that is particularly pertinent given Germany’s reluctance to take a leadership role in foreign affairs and defence. Britain’s pro-trade credentials and support of the single market are important drivers of EU economic growth, at a time when the European Union is vying with other emerging markets for economic power.

Glimmers of the possible common ground that may be reached between Britain and other member states emerged following George Osborne’s informal meeting with his German counterpart Wolfgang Schauble on the sidelines of Tuesday’s meeting in Brussels. Though warning that Europe would not be rushed on demands for treaty change, the German finance minister said the “British desire to do a couple of things less bureaucratically, to limit abuse of the basic freedoms in EU treaties . . . these are all points on which one can find a common solution.”

Amid reports that Britain may bring forward the referendum to next year, a suggestion endorsed by Bank of England governor Mark Carney, focus will now turn to London’s specific demands. Despite persistent criticism of a lack of clarity from London, to some extent the broad demands set out in Cameron’s Bloomberg speech have not changed substantially – a reduction in regulation, a restriction of EU migrants rights to benefits and a greater role for national parliaments in the EU decision-making progress.

The key question is how these demands can be facilitated legally. Despite earlier hopes that Britain could piggy-back on a reopening of the EU treaties which many predicted as an inevitable outcome of further euro zone integration, the possibility of EU treaty change before 2017 is unlikely given the time frame – the very best Britain can hope for in this regard is the promise of a treaty change that can be ratified in the future.

Instead British officials in Brussels will be looking at ways amendments can be made within existing legislation and whether British demands can be accommodated through more Intergovernmental agreements.

Ironically, the British government may find itself selling to the British public changes it would have achieved anyway.

Contrary to the prevailing tendency in Britain to cast the country’s relationship with the EU as an “us and them” dichotomy, Britain is an active member of the European Union whose diplomats and officials – like every other member state- negotiate on EU policy each day in Brussels to secure the best deal for their country.

Despite reports of Britain’s waning influence in Brussels, its officials still succeed in securing changes to EU legislation that are good for Britain, for example, the reduction in the EU budget in 2013.

David Cameron’s biggest achievement might be repackaging these kinds of changes as a “renegotiated relationship” with the European Union as he tries to sell the benefits of EU membership to the British public. Key to this will be bringing the powerful eurosceptic media along with him.

His other main challenge will be placating the dozens of Conservative eurosceptic backbenchers, who will be unhappy with whatever changes he secures.

Divisions over Europe have plagued the Conservatives since Margaret Thatcher’s time, continuing throughout the John Major era in the 1990s. While John Major had a majority of 20, Cameron has an even slimmer majority of 12. While Cameron faces the prospect of a bloc within the party voting against the referendum while the party campaigns for a yes vote, the decision to hold a referendum may help to resolve the EU question once and for all. Just as there is a growing sense that a Greek referendum may be the best way out of the current Greek impasse by forcing the Greek public to take a stance on euro zone membership, David Cameron may be able to bring closure to the EU question by putting the question of EU membership to the British public.

In the meantime, EU leaders are likely to do as much as they can to keep Britain in the European Union, despite their frustrations with London. As with the Greek crisis, ultimately the exit of a country from the euro zone or European Union is too big of a risk to take.

Suzanne Lynch is European Correspondent