EU membership is incompatible with Labour ideology

by Marc Glendening - Campaign director

Ed Miliband's promise to freeze energy prices, whilst simultaneously supporting movement towards a European Single Market in energy, indicates that he, like most of the Labour mainstream, have not thought through the implications of EU membership for social democratic politics.

They refuse to confront the inconvenient contradiction that exists between adhering to certain types of left-of-centre objectives and blind adherence to the EU status quo.

In addition to the Labour leader's commitment to block energy price rises, he recently announced a plan to force UK companies to create a new apprenticeship for a British citizen for every worker they employ from outside the EU. However, it would be illegal under Single Market rules for a Labour government to restrict apprenticeships to UK nationals.

Then there was the vote at the Labour conference on September 25th to renationalise the railways and postal services. Again, not possible so long as Britain remains within the EU.

Brussels is in the process of liberalising these areas of public provision that, on the railways, started with 1991's EU directive 91/440 requiring a division between the operation of transport services and infrastructure management, both with budgets and accounting "separate from those of the State."
[Article 4]

Various EU postal services directives have already seen the most profitable parts of the Royal Mail put out to tender and the latest requires "full market access" to the Royal Mail's business, leaving no realistic option other than privatisation.

Legal appeals

As the Head of Legal website argues, were Labour after 2015 to impose price restrictions on the energy companies this could result in legal appeals by the companies to the European Commission. The EU directives relating to gas and electricity do allow for state intervention in some circumstances relating to 'public interest' and it could be around how this is defined in practice that might open the door for legal challenges.

Whether or not a future Labour government was acting in a non-discriminatory manner (that is to say, not giving certain types of business an advantage over their competitors, in the UK and also across the Single Market) could also be the key to whether price controls in this area were considered acceptable by Brussels. Poland is in the process of being taken to court by the Commission for price regulation.

If the Labour leader seeks to make his price restrictions more acceptable to the energy companies through the offer of state subsidies to cushion their loss of profit, he could also find himself being challenged by the Commission, again on the grounds that this would give UK-based companies an advantage over firms operating from the continent who would not by definition receive this benefit of the freeze in prices. 

Contradictions unchallenged

There seems little inclination on the part of most of those on the centre and right of the party to take on honestly the severe restrictions that EU membership places on Labour to pursue centre-left  polices.

At the Fabian Society debate Preventing a Lost Decade: How Can We Make Europe Work for Growth? at the recent Labour conference, I asked Catherine Stihler MEP how she could reconcile being, as you might expect given her position, an ardent supporter of EU membership and opponent of a referendum, with the Laval and Viking rulings by the European Court of Justice?

These rulings essentially render national minimum wage laws and nationally determined agreements between employers and unions an irrelevance by allowing firms to transport workers from their own countries and to undercut local labour.

The interests of multinational companies now officially take precedence over democratically determined national laws and those of trade unions.

You would have thought, for someone who purports to represent the party of trade unionism and who places the interests of workers over those of big capital, this should not represent such a huge personal dilemma. However, Ms Stihler had no coherent response, that I could ascertain anyway, as to how she resolves this ambiguity.

Ideology hits back

The truth is that all theoretically left-of-centre MEPs have got around this dilemma by, in reality, prioritising the interests of the Single Market and the EU in general over the political philosophy to which they supposedly adhere.

The truth is that, as Karl Marx would have argued, contradictions can't remain contradictions in practice.They get worked out by what people actually do, not what they say.

There are, however, a growing number within the Labour party and trade union movement who do now get it and are prepared to confront the inherent contradiction between desiring social democratic objectives and Britain being in an organisation that is constitutionally committed by EU treaty to the disciplines of the Single Market.

My hope is that more on the left will pipe up and force Mr Miliband to explain what, should he become PM, he will do if Brussels tells him to abandon his energy and apprentice-related promises.

And what will he do if the Commission insists that the EU Services directive is finally applied to the NHS? Does the Labour leader have any political bottom line when it comes to EU membership?

I think we should be told.

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written by Marc Glendening - Campaign director, Democracy Movement  

For the latest campaign news and EU developments, follow us on Twitter: @DemocracyMovemt

Hague speech signals further retreat from EU renegotiation

by Marc Glendening

Foreign Secretary William Hague's recent speech to Open Europe indicates that the government has already given up on the pretence that it can negotiate back substantial powers from the EU.

It is now trying to manage expectations in the long run-up to a possible deal with Brussels should the Tories win the next general election.

The rhetoric now is about 'reforming' the EU with regard to future legislation, not re-visiting the powers that have already been transferred from Westminster to Brussels. 

The idea is to get unanimous agreement between all the member countries for some as yet unspecified changes, rather than trying to decentralise back to the UK control over key areas.

You can't now even slide a non-branded cigarette paper between the government's emerging position and that of the Labour and Lib Dem leaderships. Even the pro-EU British Influence in Europe and Business for a  New Europe are also talking about 'reform' and, just like the foreign secretary and David Cameron, are very vague as to what this actually means.

Vague card

One of the few specific proposals William Hague has come out with recently, is enabling national parliaments in EU states to club together to give a 'red card' to new EU laws. This, by definition, will not affect the 30,000 or so directives and regulations that have already been passed.

Nor is it clear, given the sheer volume of Brussels-initiated legislation, how the House of Commons together with other national parliaments could block new measures. Regulations are imposed automatically on the member states, they are not up for debate and they account for the vast majority of EU legislation. Directives are largely introduced into UK law through the use of statutory instruments and so are also not even debated, let alone voted on in Parliament.

So who, then, would decide which pieces of proposed EU legislation were to be brought to the attention of MPs and Peers? How many prospective directives coming out of Brussels could realistically be put before parliament? In any case, how could this feasibly be co-ordinated with other national parliaments?

At present the EU treaty enables national parliaments to give the Commission a 'yellow card' but it is only obliged to think again for a while and can then press ahead regardless. In other words, this supposed check, just like the concept of subsidiarity, is pure window dressing. An insult to the collective intelligence of all European citizens.

Because of the logistical nightmare involved with trying to organise this delaying tactic, it has never succeeded in practice (House of Commons Library SN/1A/6297, pdf).

Renegotiation Reform

This really is bottom of the barrel stuff from our government. The Tory leadership, having realised that their renegotiation campaign was going nowhere and that they risked an embarrassing failure should they actually put a list of serious demands to Angela Merkel and the other EU leaders, have decided to dispense with what Cameron now dismisses as 'shopping lists'.

The strategy now is to go for the safer option of soft focus 'reform' and vague rhetorical promises of change in the future, rather as Harold Wilson did with his similarly bogus renegotiation prior to the 1975 referendum.

My suspicion is that David Cameron is hoping that he might be able to wriggle out of holding a referendum should his party remain in office after the general election, possibly by blaming the Lib Dems should he need to put together another coalition.

Failing that, the calculation might be that, even if the promise to consult the British people about continued EU membership has to be delivered, odds are that there is a natural majority against leaving. As with Wilson forty years ago, the hope will be that the mere pretence that there has been some sort of renegotiation will be enough to win comfortably. 

Stark choice

While it is true that the Little Europeans start as favourites to win should there be an in-out referendum, given the major task involved in trying to get the electorate to vote for radical change, the government's backtracking on its renegotiation commitment is good news.

It will provide greater clarity concerning the stark choice confronting the British people: to stay in an increasingly centralised and undemocratic EU (with or without yellow, red, green or pink card systems) or to become a self-governing democracy, trading and interacting with the whole world.

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written by Marc Glendening - Campaign director, Democracy Movement  

For the latest campaign news and EU developments, follow us on Twitter: @DemocracyMovemt

Is Cameron watering down his EU renegotiation pledge?

by Marc Glendening  

Before his hurried return to London following the death of Margaret Thatcher, David Cameron undertook a much-publicised tour of other European countries to promote his campaign to see the EU 'reformed'.

Leaving aside the question of how realistic it is to actually bring about a fundamental change in the terms of our membership of the EU, there is an interesting change in tone coming from the prime minister.

In his long-awaited speech on Europe back in January, the prime minister committed himself to try to renegotiate with the EU the balance of law-making powers between Brussels and Westminster.

The implication was that, should Mr Cameron win the next general election (clearly a big 'if'), he would seek to persuade the other 26 political heads of state to sign a new treaty by 2017 returning a range of significant competences to Britain.

Ed Miliband, in his response, attacked the idea that this was desirable or possible and instead said that Labour would seek a vaguely-defined 'reform' of the EU which would not require treaty change.

In his recent truncated tour, Mr Cameron too spoke of 'reform' and talked in terms of trying to get all member countries to agree to certain, again unspecified, changes. So does this mean that he has given up on the idea of a special deal for Britain?

If so, it is a recognition, though not an honestly conceded one, that a thorough-going renegotiation is indeed impossible. This follows the boycott by the French, German and other EU governments of the 'balance of competences' review that William Hague invited them to participate in. This was conclusive proof, were it needed, that Angela Merkel and Francois Hollande have no intention of allowing the UK to re-write the current EU treaty.

It is not clear where all this leaves Mr Cameron's apparent promise to hold an in-out referendum in 2017. The government has refused to answer what it refers to as hypothetical questions about what would happen if it failed to bring about a successful renegotiation within two years of being re-elected. Would it still honour the referendum pledge?

When the 'balances of competences review', being overseen by Europe minister David Lidington, is completed David Cameron will come under pressure to list specific measures that he will want to see implemented by the EU, whether as a consequence of a renegotiation or collectively agreed reform resulting in a generalised decentralisation.

The Conservatives will then need to define what is the bottom line for them; what would qualify as a success and a failure. At present David Cameron is saying that he wants Britain to remain in the EU, but at any price? Even if he does not succeed in getting back any major powers whatsoever? 

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written by Marc Glendening - Campaign director, Democracy Movement  

For the latest campaign news and EU developments, follow us on Twitter: @DemocracyMovemt
 

No more euro flim-flam

By Marc Glendening 

Sometimes there is a time for cutting through the mushy triangulated BS of modern mainstream politics.

Europe is the question that now brooks no unambiguous answer. 

Yet the political elite, supported by the many fellow travellers who follow in its slipstream, want, for their different reasons, to keep a dense fog hanging over this issue.

I don't think Malcolm X was specifically speaking about the EU when he said, "there will be no controlled show... no flim-flam... if you're afraid to tell the truth you don't deserve freedom," as captured in No Sell Out, Keith Leblanc’s 1983 hip hop tribute.

However, those of us who want a real debate about the EU, regardless of our different preferred outcomes, should now seek to apply Mr X's commendable clarity of approach to this issue. 

This is why my organisation, the all-party Democracy Movement, is launching a new campaign, Fast Forward: beyond the outdated EU. We want to take head-on the commission/big business, financed pro-EU lobby and force them into an honest war of ideas on what exactly would be the implications of Britain leaving and staying in. 

We know that the in-out referendum David Cameron has apparently promised us will truly be a no flim-flam moment. There will be no post-modern, third way option on the ballot paper. Political rationality, courtesy of the European enlightenment, will reassert itself. To quote Malcolm X again: "You're either this or that."

Bogus debate

The current debate within the political mainstream is horribly bogus. The Tory eurosceptics, with a few honourable exceptions, are playing along with the fantasy the prime minister has been trying to sell to us.

Namely, that should the Conservatives win in 2015, it will be possible to negotiate a new treaty with Brussels and that within two years this will result in a torrent of powers being returned to Westminster.

The grandees of the pro-EU elite, as exemplified by Peter Mandelson, Ken Clarke and that other great political Malcolm - I speak, of course, of Rifkind - are selling us another fairy story. This is that there will be no fundamental further implications for Britain if we remain inside the EU. This is the soft line the Centre for British Influence in Europe is peddling.

Compare and contrast the degree of political clarity expressed by the two Malcolms: The benighted Scottish version declared his admiration for Cameron's Europe speech not only because he committed himself to continued EU membership, but also because the PM did "not reveal any significant details as to how radical, or otherwise, his negotiating objectives will be", according to Rifkind's January piece.

Presumably Malcolm R doesn't want us to even know before we vote in 2015, what exactly the Tories will be trying to get back from Brussels should they win? And people wonder why there is a political disconnect between the elite and the people.

Reality of 'in'

The stark reality is that if we vote in the referendum to stay in, we will be signifying our acceptance of EU rule once and for all. Brussels already makes approximately half our laws, according to research paper 10/62 (pdf) from October 2010 published by the House of Commons Library.

Next year negotiations will commence on a new treaty designed to save the euro by transferring a raft of new economic powers to the centre. The eurozone members will then vote as a single, majority bloc within the council of ministers, a body in which Britain has only 8.4% of the votes.

The idea that this will have no repercussions for the non-euro countries is bizarre, as John Stevens, the principled pro-EU campaigner and chair of the new UK European People's party, has argued.

How long will Brussels, Stevens asked at a recent People's Pledge debate, allow us to competitively devalue against the eurozone economies?

At some point, if we are to remain inside, Britain will be made to put up or shut up about joining the euro. The euro, not the single market, will become the defining feature of the new EU, stated Stevens, and this is what all members will be required to join.

Post-EU future

The Democracy Movement in its new campaign will seek to challenge the British people to confront not only the political reality of remaining within the EU, but to project ahead and contemplate what being shackled to Brussels will mean for us economically.

Our assertion is that there is a decisive, unstoppable shift in power taking place away from Europe to the Commonwealth and other fast-growing parts of the world. 

Britain because of its language, history and geographical position, together with the communications revolution, needs to look forward to a post-EU future.

The single market is of declining significance to us, accounting for only 9% of our GDP, a figure that will fall as we export a growing percentage of goods and services to the non-EU world. 

Our message is we must stop being little Europeans, as much as we should avoid being little Englanders.

It is said that education minister Michael Gove has a poster of Malcolm X in his office bearing the legend: "By any means necessary." This should not come as any surprise to us. Here is the one government minister to have said that, in a future referendum, he would vote to leave the EU. 

He understands that the time for euro flim-flam is well and truly over. Let the real debate begin. 

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written by Marc Glendening - Campaign director, Democracy Movement  

This article was first published on Politics.co.uk. For the latest campaign news and EU developments, follow us on Twitter: @DemocracyMovemt

Cyprus bank account grab exposes EU's new feudalism

by Marc Glendening
 

The peasants of Cyprus are now truly revolting, following a decision by Angela Merkel and the other Eurozone heads of government to force Cyprus to grab private bank savings to contribute €5.8 billion towards an EU-IMF bailout. 

This edict demonstrates that the rule of law accounts for very little in the European Union. 

One of the big claims always made by supporters of Brussels-based governance was that the individual EU member states would be subject to a system based upon predictable and impartially applied rules, enforced by a Commission and Court of Justice above sectional, national interest.

The EU, they have argued, was therefore a continuation of the political project commenced by the European Enlightenment in the late eighteenth century. It has heralded, allegedly, another move away feudalism of the ancien regime. 

However, the situation in Cyprus proves what some of us have been arguing for some time. Namely, that the brave new world of the EU represents in reality a return to pre-modern, pre-democratic Europe. 

By Brussels fiat, savers' private property has been seized in an act of retrospective taxation. This is an arbitrary act of raw power befitting Louis XIV. A decision taken in private, passed on as a fait accompli to the EU's local agent in Nicosia, 'president' Nicos Anastasiades, and then imposed by him without reference to the national parliament - the same elected body that last week voted against divesting savers of their already taxed income. 

How convenient that Brussels and the Cypriot president have found a (constitutional?) way to circumvent the impertinent reservations of parliamentarians.

This is not the first time Brussels has made it all up on the hoof and disregarded the apparent rule of law that supposedly lies at the heart of the treaty. 

In 2003, Germany and France both broke the Stability and Growth Pact  rules that supposedly accompanied the single currency. No action was taken by the Commission for exceeding budget deficits of 3% and levels of national debt exceeding 60% of GDP. Portugal and Greece did, however, have their collars felt.

As many politically dissident Germans have argued, the various euro bailouts have contravened the supposedly strict Maastricht rules designed to prevent members of the single currency from becoming responsible for the debts of others. They claim, as a result, the EU treaty is now incompatible with the Germany constitution. 

When Alastair Darling was summoned to Brussels to discuss the eurozone crisis the day after the British general election in 2010, he thought there was no way Britain as a non-euro member could be forced to contribute to the bailouts. Wrong! The European Court of Justice and the Commission suddenly decreed that Article 122 of the EU treaty - a measure originally related to helping member states that had experienced a natural disaster - now covered those countries experiencing economic problems. Our then chancellor was forced to stump up £11 billion in loans.

At the beginning of the Cyprus bailout scandal we were told that this savings grab would be a one off. Now we learn from Jeroen Dijsselbloem, chair of the eurozone finance ministers, that this 'solution' might indeed be applied to other single currency countries as well. 

In Brussels anything goes and anything is possible. The European Enlightenment was about the rule of law and making the exercise of power accountable and transparent to the people. The EU is about reversing this process.

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written by Marc Glendening - Campaign director, Democracy Movement

For the latest campaign news and EU developments, follow us on Twitter: @DemocracyMovemt

EU's environmental failures expose its structural flaws

EUobserver reports today yet another high profile failure in the EU's grand-style, centralised policy-making, adding to a list that includes, most notably, the huge waste and imbalances of the Common Agricultural Policy, the depleted fish stocks of the Common Fisheries Policy and the euro austerity crisis.

Around 75 'green' NGOs are calling jointly for the EU to scrap its flagship environmental scheme for trading carbon emissions - the ETS - accusing the scheme of actually increasing carbon emissions instead of reducing them.

According to the EU, the ETS scheme is "a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively." It covers more than 11,000 power stations and industrial plants in 31 countries, as well as airlines.

But environmental groups, including Friends of the Earth and Carbon Trade Watch, say that by distracting from the task of reducing consumption and dependency on fossil fuels, the scheme has caused emissions to rise.

They also highlight how the EU-ETS facility to import cheaper emissions permits from abroad in return for the polluter supporting 'offset' projects in developing countries has provoked land-grabs, human rights violations and related environmental damage in poverty-stricken regions.

'Life support'

In recent months the EU-ETS has been described as being on "life-support" due to a collapse in the price of its carbon permits - the opposite of the scheme's intention. The EU hoped that higher carbon permit prices would incentivise businesses to cut emissions or invest in clean technologies.

Companies have blamed government handouts of too many free permits in order to limit the initial impact of the scheme on the highest polluters and are supporting a European Commission proposal to suspend future permit auctions, hoping that consumption of credits in the interim will prop up prices. MEPs on the European Parliament's environment committee are due to vote tomorrow on the Commission's proposed reform.

The scheme's faults mirror the EU's similarly ill-judged rush to promote biofuels through dramatic targets and offering generous subsidies to grow fuel crops. The result has been large-scale deforestation in developing countries as land was cleared for growing these newly lucrative crops, together with a dramatic rise in food prices as farmers cashed in by switching millions of acres from food production.

Faulty structure

There are huge questions here, of course, about the merits or otherwise of biofuels and about how best to manage and preserve our natural environment.

But the far more fundamental question these failures should provoke is about whether the EU represents the best structure for effective decision-making on the now wide range of policy areas affecting our lives over which it has control.

The course of the EU's development has now demonstrated repeatedly through the increasing number of 'grands projets' emerging from its structure that over-centralised decisions, made by institutions too far removed from democratic accountability, are much more likely to be of poor quality and detrimental to Europe's security and prosperity.

Break down the elements of EU decision-making and its easy to see how this comes about.

First policy ideas are boiled down to the lowest common denominator in order to secure majority support in the Council of Ministers, often involving persuasion based not on the merits of the policy in question but on horse-trading over the benefits a country or countries could gain from a completely separate forthcoming EU decision. 

Second, the counter-balancing and constructive pressure of having to answer to voters on pain of losing their jobs, perks and privileges is not something felt by the vast majority involved in make EU decisions. Not even large numbers of MEPs who, thanks to the list system the European Parliament employs, enjoy safe seats by virtue of being near the top of their party's slate of candidates.

Third, majority voting on most policy areas in the Council of Ministers prevents those countries that disagree with an EU policy or strategy (perhaps rightly) opting out of its effects, resulting in these poor quality decisions and the resulting damage being imposed uniformly on a pan-continental scale.

Finally, when policies go wrong, the cumbersome structure and huge turning circle of the EU means that changing course and limiting the damage takes years. Despite EU biofuels policy having being roundly criticised now for several years, no change is expected before 2020. Even then, the EU's inherent faults mean new decisions are unlikely to be better constructed.

EU unfit

The growing evidence of failed policies confirms the view of many that the EU's structure simply isn't fit to make decisions of the quality required in the huge areas of policy with which it is today entrusted.

Its activities on the environment have shown vividly the damage its poor decisions can cause, but this is likely to be the tip of the iceberg relative to the effect of EU decisions in the many other policy areas in which it governs with longer or more obscure feedback cycles. 

Damage to the environment is bad enough. The detrimental impact of intrinsicly poor EU decision-making on a wide range of policies imposed over an entire continent should give far greater cause for worry with respect to Europe's future prospects.

The best solution would be for the accountable leaders of the EU's member governments to open their eyes and take steps to reinvent fundamentally the EU's structure to become more flexible, dynamic, accountable and attuned to Europe's 21st century needs rather than those of the 1950s.

Since the multiplicity of interests propping up the existing structure makes this highly unlikely, it is Britain's relationship with the EU that must in fact be rebuilt from first principles - those of trade, co-operation and cultural exchange, rejecting outdated and flawed centralisation.

EU admin costs to be focus of new budget summit

EU leaders will meet in Brussels tomorrow for talks aimed at reaching a deal on the next seven year EU budget (Multi-annual Financial Framework) starting in 2014. 

Negotiations on the new MFF broke down in November, according to the Prime Minister due to the dissatisfaction of several countries over the EU Commission's refusal to cut administration costs.

The most recent MFF draft, circulated by EU Council president Herman van Rompuy before the last summit and revealed by Open Europe, proposed spending of €973.5bn.

However, it also proposed large reductions to the UK rebate and showed the Administration budget remaining at €62.6bn - a 12.8% increase over the €55.5bn in the 2007-13 MFF - rather than falling with other public administration cuts in EU member countries.

The Commission, supported by the European Parliament, originally proposed a 5.8% rise in the overall budget framework to €1.033tr, which included a 6% share for Administration.

Speaking to the European Parliament this week, the French President Francois Hollande said that he would accept a reduced EU budget settlement worth around €960bn, which aligns with a German figure circulated at the time of the last summit.

The British government's initial proposal was for a budget of €886bn but is now thought to be arguing for a total of around €940bn over the seven year period.

However, EU Parliament president Martin Schultz last week warned that MEPs would reject any deal that strayed too far from the Commission's original proposal.

EU taxes

Herman Van Rompuy has indicated that he will not circulate any new calculations before talks begin on Thursday. It is also not clear to what extent discussion over direct EU taxes are forming part of the EU budget negotiations.

The EU Council president before Christmas tried to turn the spotlight on Britain by proposing that proceeds from a new Financial Transactions Tax - in which Britain will not participate - should be contributed to Brussels and the amount offset against a country's contributions to the EU budget.

In 2011, the European Commission also proposed replacing the existing VAT-based contribution to the EU budget with a "modernized VAT" to arise "directly from the citizen to the EU".

The plan is thought to entail VAT levied at a fixed percentage by all member states in addition to national rates - likely to be a 1% uniform rate, rather than the 0.3% share of UK revenues the EU collects currently - and then transferred directly to the EU budget.

On the new MFF, David Cameron has pledged "at best a cut, at worst a freeze" in the seven-year spending limits, although Britain's contribution may rise in any case. On 31 October 2012, rebel Conservatives and Labour MPs teamed up defeat the government, with a majority voting for a real terms cut in the EU budget.

2013 budget rises

The EU's next MFF requires unanimous approval of EU member governments. If no agreement is reached in time to allow for legal ratification of the new deal by the end of 2013 - under a political, rather than legal, Inter-Institutional Agreement - the 2013 budget will be rolled over year-by-year with a built-in 2% rise to cover inflation.

Voting in Strasbourg just before Christmas, MEPs approved a €132.8bn (£107.2bn) annual EU budget for 2013. This included a 1.85% increase in the EU's admin costs from €8.277bn (£6.7bn) to €8.430bn (£6.83bn), at a time when member states on the other hand are making cuts to public services and national administration costs.

At €8.3bn (£6.7bn), EU administration costs amounted to 5.6% of the EU budget in 2012, but this will rise to 6.35% in the 2013 budget, showing that the EU's running costs - such as pay and perks for EU staff, plus the cost of buildings and facilities - are growing as a proportion of the overall budget despite Europe's financial difficulties.

Much of this is very visibly wasted on excessive EU pay, perks and grandiose facilities, together with EU self-aggrandisment. Examples include the EU's £45m tribute to itself, the House of European History, and a £250m refurbished 'Résidence Palace' building for the EU Council and its president Herman van Rompuy, due to open next year.

The 2013 deal also includes an extra €6bn (£4.86bn) added to the 2012 budget to cover EU overspending last year. This is less than the €9bn (£7.29bn) the Commission was demanding, likely resulting in a further request for additional funding being made by the EU as early as September 2013.

The addition of this extra €6bn to the 2012 budget gives the appearance that EU spending in 2013 will fall in comparison. But this does not take into account extra requests for funding predicted by the Commission later next year.

Cameron's challenge

This process of annual and subsequent amending budgets to make up funding shortfalls is making the patterns of the EU's actual spending more and more opaque.

EU Ministers must still formally approve the 2013 deal, but difficulties are not foreseen since the EU's annual budgets are agreed by majority vote. Member governments demanding a budget freeze or cuts are likely to be over-ruled by the majority (17) of net beneficiaries.

David Cameron was powerless to stop Britain's payments to the EU rising in 2013 and must now focus on the 2014-2020 budget framework negotiations to stem our liability to funding the EU's ever-increasing demands for public money.

Tomorrow's summit is a key test of the Prime Minister's EU negotiating abilities because if he cannot get a meaningful cut in Britain's contributions to the EU budget when he has billions of pounds in UK contributions to put on the table, confidence in the prospect of a broader renegotiation of the EU's powers will be significantly undermined.

Referendum welcome but Cameron's EU strategy risks embarrassment of failure

The national debate on Britain's future relationship with the European Union must step up a gear following David Cameron's speech this morning.

While doubts remain over whether the Prime Minister will both be in office and able to deliver renegotiation and a referendum after the next election, the proposition that there will be a definitive test of public opinion on EU membership within the next few years cannot be dismissed.

Pro-democracy campaigners must now step up their efforts to rebut the disingenuous arguments being made by groups such as Business for New Europe, the Centre for British Influence in Europe, the European Movement and others, particularly in relation to trade, jobs and foreign inward investment.

One example is the scaremongering by the pro-Brussels lobby that, if the UK were to decouple from political centralisation, we would be locked out of the EU Single Market, have to pay high trade tariffs and, as a consequence, three million jobs would be put at risk.

In reality, especially given the trade surplus the EU enjoys with the UK, it's absurd to imagine that Britain could not negotiate free access to the Single Market in the same way as Switzerland, Norway and many other non-EU countries. 

Responding to the Prime Minister's speech, Democracy Movement director Stuart Coster commented:

"David Cameron's commitment today to an in/out EU referendum in 2017 is a welcome step forward.

"However, securing significant powers back from the EU via negotiation from within simply isn't feasible because it would require the agreement of 26 other member governments who show no signs of subscribing to David Cameron's vision of the EU's future.

"The true choice is whether to be in today's EU lock, stock and barrel, or to seek the new, more flexible, more democratic relationship David Cameron rhetorically supports by employing Article 50 of the EU treaty and notifying Brussels that we plan to exit the EU's structures.

"Holding out the prospect of something other than a 'status-quo-or-go' EU referendum risks the Prime Minister having to admit embarrassing failure."

"The most indefensible referendum position is sadly the one Labour leader Ed Miliband is adopting: that people shouldn't even be permitted to vote on Britain's relationship with the EU in case we vote to leave. The words of someone who has neither faith in his case for EU membership nor respect for democracy."

How credible will David Cameron's EU speech be?

In advance of the Prime Minister's long-awaited EU speech tomorrow morning, the DM has an article today on Public Service Europe looking at the credibility of his EU policy. 

The article as published is reproduced below:

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This Wednesday, David Cameron is to finally deliver his much-anticipated speech setting out his position on the renegotiation of some of the European Union's powers, bringing them back to Westminster and on holding a referendum. The prospect of the British prime minister making a statement about the United Kingdom's relationship with the EU has sparked a flurry of comment about whether or not Britain should renegotiate its membership of the union and, if so, which powers the country should seek back.

Cameron's every word is likely to be pored over by pressure groups on both sides of the debate and, not least, by a large number of his own backbenchers. They are looking for a clear indication that the Conservative Party leader shares their concerns about the EU's powers and will give them a popular referendum pledge with which to fight the next election. But there is one question it seems certain that the speech will not answer and, unfortunately, it is the question on which the entire credibility of Cameron's EU policy and the prospect of a referendum depend.

Beyond the desirability of renegotiation, which has so far been the main focus of debate, how feasible is it that Cameron will secure the necessary agreement of other member states to a renegotiation and a return of European powers from Brussels to Westminster? If the prime minister intends to make a referendum pledge dependent on his view of a positive outcome from such discussions, few will take seriously the idea that they will get the chance to give 'fresh consent' to Britain's links with Brussels - unless the process by which negotiations will take place is made clear.

There are only three methods by which treaty amendment discussions can be launched and Cameron's difficulty is that two of them require the cooperation of the 26 fellow member states. The prospects of this happening are looking increasingly bleak. In recent weeks, prominent figures including Ireland's Deputy Prime Minister Eamon Gilmore, Polish Foreign Minister Radek Sikorski and Italian Prime Minister Mario Monti have lined up to denounce the idea that any single country should be permitted to revise its membership of the EU.

French President Francois Hollande's comments after December's meeting of the European Council summed up the mood. "I think the treaties are there to be abided by," he said. "Europe isn't a Europe where competences could be withdrawn." Where, in this, does Cameron believe lies the support he needs to negotiate, never mind secure agreement to, a return of powers to Westminster?

The method the prime minister and his supporters tend to cite is that forthcoming negotiations over moves towards EU 'fiscal union' should be used to try to broaden discussions - to giving the UK opt-outs from other areas of the treaty. The EU, they say, "is changing" and Britain should take its chance to put its own changes on the table.

While there will undoubtedly soon be discussions, mainly centred on the eurozone, about passing further budgetary sovereignty to Brussels - since other EU members could dismiss his proposals as irrelevant, this strategy would involve Cameron having to play extreme hardball with the EU. He would have to refuse to approve changes purportedly designed to ensure the euro's survival, until UK opt-outs were granted.

As well as being politically very dramatic and therefore unlikely, this would leave the UK open to charges of both blackmail and hypocrisy; since the British government has said that it supports greater fiscal union for the eurozone countries in order to reduce the effects of euro instability on the UK economy. The second method is for the government to invoke Article 48 of the EU treaty. This opens a convoluted process to revise the treaty involving a succession of conventions and conferences at the end of which other European governments and institutions are likely, also, to collectively reject any repatriation proposal.

That leaves the third method, which is the only way to guarantee that discussions about the EU's powers cannot simply be dismissed by other European leaders and, therefore, is the only way that Britain can underpin the credibility of Cameron's EU strategy. If he hopes on Wednesday to dodge the accusation that he is seeking merely to introduce more delay and distraction into the EU debate, rather than respond to clear public concerns about the union's powers, he must make clear that he plans to employ Article 50 of the EU treaty.

Only by giving notification that the UK intends to decouple itself from the EU's growing political centralisation can the PM convince his peers that he is serious about achieving change. And only then can the country focus on a necessary debate about how best to shape future relations with our European neighbours - such that they meet the needs of business, retain the benefits of cultural exchange but also, crucially, respect democracy and national diversity.

EU renegotiation is not feasible from within

This Friday, the Prime Minister is expected to make a speech setting out his position on returning some decisions from Brussels to Westminster and on holding a referendum on the outcome.

Much of the recent debate that has been provoked by the prospect of this speech has been about whether or not Britain should renegotiate its membership of the EU and, if so, which powers we should seek back.

No attention whatsoever has been paid by mainstream commentators to the methods by which any renegotiation could occur.

Essentially, a phony debate has been conducted, no doubt encouraged by Number 10, about the desirability of renegotiation and not its feasibility. But the PM's evident interest in 'substance' over 'process' in fact highlights the vulnerability of his EU policy.

Because all the potential methods of initiating a discussion with the EU about the balance of powers between Westminster and Brussels - short of informing the EU that the UK is leaving - are highly unlikely to deliver a formal negotiation, nevermind agreement.

The credibility of David Cameron's forthcoming speech, and the likelihood of any referendum, depend entirely on the Prime Minister setting out a feasible method of securing a renegotiation.

Three methods

There are only three methods by which David Cameron can attempt to initiate discussion about a return of powers from the EU to Britain.

1. Use forthcoming negotiations over the proposed EU 'fiscal union' treaty to try to secure UK opt-outs from other areas of the treaty. This is the method David Cameron and other supporters of renegotiation tend to cite. But there are many problems with this strategy.

First, because other member states could easily dismiss any attempt to broaden the negotiations beyond proposed treaty changes, it would involve playing extreme hardball with the EU by refusing the approve changes designed to secure the future of the euro until UK opt-outs were granted. As well as being politically dramatic - a potential tactic that has already been described as 'blackmail' by the German government - this would leave David Cameron open to charges of hypocrisy, since the government has said that it supports greater fiscal union for the eurozone countries in order to reduce the effects of its instability on the UK economy.

It is not credible relative to his position on the eurozone, politically likely nor desirable for Britain's relations with other European countries, for the Prime Minister to threaten to withhold his consent from the new treaty unless agreement is reached on a return of powers to Britain.

2. Invoke Article 48 of the EU treaty, which opens a convoluted process to revise the treaty on a proposal from a member government, the Commission or the European Parliament. But there are many hurdles in this process that the government is unlikely to overcome. Such a proposal must first achieve majority support within the European Council. Then, the proposed amendments must be approved by a Convention drawn from representatives of all the member states governments and their national parliaments, the European Parliament and the Commission. The EU official chairing this body will be responsible for determining the "consensus" opinion of the Convention on the proposed amendments. Formal votes will not be taken. Once this has concluded its deliberations, a conference of representatives of the member countries will decide finally what amendments should be made to the EU treaty.

3. If this fails, the only other option is for a government to invoke
Article 50 of the treaty. This covers the arrangements for arriving at a new relationship between a member country wishing to leave the EU and the European Council, the body on which the other political heads of state are represented. Given that David Cameron says he does not support Britain leaving the EU this is clearly not an option he would consider viable. But it is the only method by which a significant renegotiation can be guaranteed.

Who will agree?

Prominent figures across Europe have already denounced the idea that Britain should be permitted to renegotiate its membership of the EU.

Ireland’s deputy prime minister, Eamon Gilmore, has said that there cannot be "different forms of membership… There cannot be flexibility on the core conditions. You cannot have a European Union if you end up with 27 different forms of membership."

The Polish Foreign Minister Radek Sikorski, has already gone on record as saying to David Cameron: "Please don't expect us to help you wreck or paralyse the EU."

Speaking after December's meeting of the European Council, French President Francois Hollande indicated his opposition to repatriating EU powers, saying: "When a country makes a commitment, generally, it’s for life. So I think the treaties are there to be abided by. And so far I haven’t heard Mr Cameron at a European Council asking to opt out of certain competences ... Europe isn’t a Europe where competences could be withdrawn."

The Italian Prime Minister Mario Monti said that, rather than renegotiate, Britain must be asked the fundamental question: "Do you want to remain in the European Union?"

And President of the European Council, Herman Van Rompuy, said: "If every member state were able to cherry-pick those parts of existing policies that they most like, and opt out of those they least like, the union in general, and the single market in particular, would soon unravel."

Delay, distraction?

Where, in this, does David Cameron believe lies the support he needs to secure agreement to British opt-outs?

The unfeasibility of renegotiation makes the PM's strategy look far more like delay and distraction than a response to public concerns about the EU's powers.

This Friday, the mainstream media must focus on exposing the feeble foundations of his EU policy. If David Cameron is serious about renegotiation, he must first notify the EU that Britain will leave. 

DM letter: Pryce so wrong on the EU

The DM has a letter in today's Evening Standard in response to a comment piece published yesterday by the economist Vicky Pryce.

In her article, Pryce repeated a number of claims and myths about the impact of the EU, some so detached from reality it's hard to imagine from where they can possibly have emerged, beyond simply someone's fevered imagination.

The full version of the DM's response is reproduced below:

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Dear Sir,

No wonder Vicky Pryce thinks this is no time to seek a new deal with the EU (Comment, 14 January). Her understanding of the EU's impact is wrong in every key respect.

She says "85% percent of our budget contribution comes back to the UK", but Treasury figures for 2010-11 show the figure is just over 57% - a net cost of £8.8bn that year alone. Pryce also says "regulations are mostly national", despite a House of Commons Library study from October 2010 showing in fact just over half of new laws now have their origins in Brussels.

Her concern about the EU market becoming more difficult to access surely makes the highly unlikely assumption that Britain could not achieve a free trade agreement as part of any new relationship with the EU - a deal that our trade deficit with the EU shows would be in the interests of EU businesses far more than that of UK plc. 

Overcoming ignorance about the EU through a proper national debate on the basis of facts and giving us all the chance to make an informed decision about Britain's best path to prosperity in the 21st century is exactly why David Cameron must promise to hold an EU referendum.

Yours faithfully,

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Pryce's article comes on the back of a recent propaganda onslaught by political and business elites seeking not only to intimidate the Prime Minister from seeking any change in Britain's relationship with the EU to bring decisions back to Westminster, but also to deny the rest of us a real choice about Britain's future and how we are governed.

In his speech on Friday, David Cameron is expected to announce an intention to renegotiate aspects of the EU's powers and hold a referendum on the outcome sometime after the next general election (IF there is a new 'fiscal union' treaty, IF other countries agree to renegotiate, IF they agree to hand back EU powers, and IF he wins the 2015 election outright).

Despite the likely dependence of such a pledge on a range of improbable developments, the temperature of the EU debate is nevertheless rising. The last few weeks have seen the opening skirmishes of a referendum battle, which David Cameron's speech on Friday may well exacerbate over the coming months and years into full political war about the best course for Britain's democracy and future prosperity.