The UK’s foreign policy objectives are currently very muddled. The UK wants the Euro area to adopt bond buying and quantitative easing. This would delay but not prevent the ultimate crash of the Euro. It would mean bigger debts and more unemployment by the time Greece and other weaker members are finally driven out, or Germany decides to leave as it is all too costly. It is difficult to believe the southern states can become competitive within the zone, or that Germany will be prepared to pay all the bills to keep it going.
The UK wishes the Eurozone to integrate more rapidly, adding political union to monetary union. This would create a strong new country on the continent, something previous generations have fought against. The UK wishes to have a “seat at the top table” despite not wishing to be part of this new political union. It is difficult to see how this could work. The UK does not wish to make further financial contributions directly to the poorer areas in the EU, but will do so indirectly through the IMF.
The UK government should think again. Instead of this muddle the UK should start from the proposition of what is best for the UK, and then set about selling it to the other EU members. The UK should use every bargaining strength it has. It has two major ones. The first is Euroland needs UK consent to Treaty changes. The second is 80% of the British people do not support our current relationship, and either want to leave or want substantial powers of self government returned to us. The UK government should grasp just how frightened of referenda the EU now is, and could threaten one.
So what do we want out of our relationship with the rest of the EU and Euroland? We want a peaceful friendship. We want to carry on trading on sensible terms. We need some agreements to cover detailed matters like air and sea links, matters of common environmental importance like pollution and noise, double taxation arrangements, and an extradition system. We have these type of agreements with non EU countries through bilateral negotiation and international treaties, but for the EU they are now subsumed within the acquis communitaire or common law codes. Many of us at least want our full rebate back on the budget, as the EU did not deliver the reform of agricultural spending promised as the offset. A new relationship could clarify where we are happy with shared law making, and how ti should be decided.
On defence and foreign afairs we should continue to make NATO the cornerstone. We should politely decline further involvement in EU based defence initiatives. Foreign policy should remain a UK matter. We might take a common stance with the rest of the EU where it suited them and us, but each matter should be judged on its merits and subject to veto or opt out.
On trade and commerce we should simplify. All we really need is the right to offer goods and services for sale. This does not need to be complicated by hundreds of laws laying out in detail how you make a tyre or provide an insurance policy. Given the huge accretion of law and regulation I suggest negotiating the right for the UK to disapply any EU regulation that the UK Parliament does not accept. First the UK would offer amendment or repeal to all EU members as our preferred way of tackling it, setting out our reasons. If the EU disagrees we should have the power to disapply the measure through Parliamentary process.
The same should apply to areas like the environment, transport and energy where the EU has come to legislate and regulate substantially.
The EU should be given a simple choice. If it offers us such a deal then the UK government would recommend it to the British people and would campaign to carry the vote in a referendum. If the EU refuses to give us a satisfactory deal the UK would still have a referendum, and the British people might decide to leave altogether. As a concession to the rest of the EU the UK might offer a different arrangement on the EU budget, as otherwise the UK could opt itself out on a permanent basis. In practice our budget contribution would need to be negotiated in the light of how much we stayed in. If we took ourselves out of the agriculture policy, for example, we would need a substantial reduction in fee.