The deal breaker: what was sought and what was won
DAVID CAMERON last night insisted his deal met the demands he made at the beginning of the renegotiation, launched after his election victory.
While his deal contains policies on each area of his demands, he was forced to make significant concession on policies to curb migration to seal the deal.
However, his ability to secure a protocol of treaty change, and a unilateral brake to protect Britain from eurozone integration, exceeded expectations.
Migration
This was by far the most difficult section. Having considered an audacious bid to win a brake on free movement, Mr Cameron asked to be able to ban EU migrants claiming in-work benefits for the first four years in Britain.
In his party manifesto, Mr Cameron called for a crackdown on “illegal working and sham marriages” and a complete ban on the payment of child benefit to migrants living overseas.
The deal marks a significant watering down. Instead of an outright ban, Britain has been granted a one-time only emergency “brake” on benefit payments.
It will allow any migrants arriving in Britain within a seven-year period to receive no benefits at first, going up to full entitlements over a four-year period. The gradient will be determined by the European Commission as it drafts legislation.
In a move to reassure voters, the Commission has said it would be activated immediately.
In a second climb-down, child benefit payments will simply be reduced to match the living standards of the local country, rather than halted outright. The indexation will only come into effect on January 1, 2020 for claimants already living in Britain.
The European Commission promises to bring forward legislation to close up loopholes created by European court rulings that allow free movement rules to create marriages of convenience.
Sovereignty
The Conservative Party manifesto pledged to “end our commitment to an ‘ever closer union’, as enshrined in the treaty to which every EU country has to sign up.”
The deal produced last night makes explicit that the declaration, treasured by some federalist states, cannot be used to push Britain deeper into the EU.
It says that “it is recognised that the United Kingdom, in light of the specific situation it has under the Treaties, is not committed to further political integration into the European Union.”
It makes explicit that “ever closer union” cannot be used by Brussels as an excuse for increasing its powers.
The manifesto also said national parliaments should be able to “work together” to block EU legislation. The deal allows parliaments to issue a “red card” if 55 per cent of them object to a law on grounds of subsidiarity, forcing ministers to either amend it or drop it.
Euro safeguards
In his letter to Mr Tusk, Mr Cameron called for a declaration that the EU has more than one currency, to protect the pound from “discrimination”, a guarantee that the UK would not have to bailout failed eurozone economies, and a mechanism that means “any issues that affect all member states must be discussed by all member states”.
This caused a major row with France, which feared Mr Cameron was attempting to create a “veto” on the eurozone.
In a significant win, the deal creates an “emergency brake” that can be activated by one non-euro country alone in cases where it fears the eurozone states are threatening its interests by voting through measures. It forces a full discussion of the proposal among prime ministers, allowing them to thrash out a compromise.
The deal falls short of a declaration of multi-currency union – instead it is a far more limited acknowledgement that the UK has a special exemption from Euro membership.
Competitiveness
In a letter to Donald Tusk sent in November, Mr Cameron said the EU must complete the single market in digital products and banking, to boost trade, and to cut the regulation on business in order to revive its sluggish economies.
This was the easier basket – Mr Cameron’s agenda closely matched that of Jean-Claude Juncker, the European Commission president – and he secured all his objectives.
Treaty change
Mr Cameron had repeatedly said he wanted treaty change, rewriting the EU’s constitutional texts, in order to render the changes permanent and prevent them from being pulled apart by EU judges.
The deal says that the opt-out on ever closer union and the economic governance section will be incorporated into the treaties when they are revised at a future date.
However, the benefits reforms are not covered by treaty change, leaving them vulnerable to being torn apart by European judges.
A self-destruct clause
This was a last-minute addition. Under an amendment introduced by Belgium, it makes clear that British voters cannot vote to leave the EU in the hope of improving on the terms of the deal. EU countries fear a “contagion” of leaders copying Mr Cameron by calling referendums.
It states that should the result of the referendum in the United Kingdom be for it to leave the European Union, the set of arrangements… will cease to exist.”
It helps Mr Cameron because some in the leave camp argue that Britain should vote No to win a better deal, whereas he has argued that if the verdict is to leave, the UK will have no choice but to quit.
What was missing
In his Bloomberg speech, Mr Cameron said Britain should be exempt from the Working Time Directive, and said powers should be returned on the “environment, social affairs and crime.”
He also demanded Brussels starts “controlling spending and shutting down programmes that haven’t worked”.
In the end, the deal features nothing on these areas.
The Working Time Directive was parked as it risked angering the trade unions endangering the referendum, whereas attempting to slash EU spending will have to wait for budget negotiations in the years to come.