In this light, Merkel’s remark earlier this month that the free movement of people is a central tenet of the EU was a much-needed first step to settle relations between Brussels and London. The chances of the UK leaving the European Union, popularly called “Brexit”, have been steadily increasing for quite a while. It is high time that European leaders made it clear which red lines cannot be crossed if the UK wants to remain in the EU. British politicians, on their part, must be honest about the implications of Brexit and the impossibility of renegotiating the basic principles entailed by the membership of the Union, and then let the people decide.
The Westminster establishment has much to be blamed for. Immigration is a concern for many people and needs be addressed, however Tories and Labour should not have allowed UKIP to dominate the debate. Migrants are net contributors to the welfare state; anti-migrants sentiments are by far stronger in those areas where the migrant population is proportionally small, while the issue is rarely a concern for Londoners. UKIP is simply exploiting the need to find a scapegoat, as it is common during a deep economic crisis. Many Britons are not benefiting from the recovery and wages have been stagnating for the longest period since records began. Whether immigration of low-skilled labour has had negative effects is controversial, but even if it has the effects have been tiny; the main problems lie elsewhere. By the same token, regulation from and payments to Brussels are far from being the cause of most people’s hardship; austerity and structural problems are by far more important. Politically, chasing UKIP on immigration will not pay off; Cameron should defend the economic benefits of migration and Miliband (Labour’s leader) should focus on the welfare state, fiscal policy and the labour market.
It is true, the European Union is not exactly popular on the other side of the channel. Yet pro-EU Britons and European leaders from other member countries must be clear about what Brexit entails. The UK would have two choices. It could remain in the free trade area, which comprises non-EU member such as Norway. But this would mean having to comply with common legislation without having representatives in Brussels; what is more, the free movement of people is one of the four principles of the single market. On the other hand, it could leave the common market altogether. For the global-oriented British economy, which enormously benefits from trade and its position as financial gateway to what remains the biggest economic area of the world, this would hardly be a wise choice.
What if, however, Britain chose to stay in? For years, the relationship with the Union has been informally based on the two-speed Europe principle, with the UK opting out of major treaties, most notably Maastricht and Schengen. This principle must be now formalised in a way that benefits both parties. On the one hand, the Eurozone has no choice but to go down the road of federal integration. Democratically elected legislative and executive bodies may take many forms, but the need for the common currency to be backed up by a central government is undeniable. On the other hand, there is little question that, at least in the foreseeable future, most Britons do not share the dream of the “United States of Europe”. Both the UK and the Eurozone must accept the respective positions on an agreement that maximises the mutual benefits. The former cannot prevent the latter from going down the federalist road but it should instead decide whether it benefits or not from being a member of the Union. Leaders of the other EU countries should instead follow Merkel’s lead and stop ignoring the issue, making it clear that the free movement of people is not negotiable.
From an economic point of view, being part of the EU greatly benefits Britain and all the other member countries, especially in such a globalised and interconnected world. Even more importantly, historical, cultural and social ties between the British Isles and the continent are often underestimated. Despite the fact that Britain has been for a long time globally oriented, there is no doubt that it remains a European country. At the moment a two-speed Europe is the most sensible solution, but it would require the UK to accept the free movement of people. Conversely, if Britons see the matter differently, it is time to let them have a say in the matter. Years of tinkering and hesitating about the future of the Union have caused enough political and economic damage. For the destiny of the Eurozone to be determined, the relationship with Britain has to be settled.