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An Overview Of Britains Role In The Eu Politics Essay

This class simply aims to give an overview of Britains place in Europe since the Second World War and will focus on the key issues and events that have marked relations with the continent. Further reading will therefore be vital and should be carried out by first consulting the reading list included in the course handout.

Britain is often criticised for being an "awkward partner" in Europe, one that is often seen as participating (grudgingly and tardily) in joint structures only to then try and argue for special conditions and exemptions based on its individual needs, perhaps even trying to oppose the fundamental principles on which those structures are based. We shall see how this reputation has come about by looking at a number of specific stages of the European integration process, in an attempt to understand the underlying reasons for such behaviour. These are diverse and include such things as Britain's relationship with the Commonwealth and the United States; Britain's view of itself as a world power; the nature of Britain's economy as a densely-populated industrial country; the personalities, and prejudices, of politicians such as Thatcher and De Gaulle.

I. Missed Opportunities: Britain and the ECSC

One of the recurrent reactions of the British faced with the post-war moves towards greater European integration has been that of rejecting, or rather initially rejecting, the initiatives launched by the continental European countries. The need for greater integration

is often described as having a political and diplomatic objective, that of ensuring that war would no longer ravage Europe, i.e. by making sure that Germany could no longer dominate in military, industrial and economic terms. German coal and steel would no longer be used to build up its military power; nor would France have to fight Germany to have access to these resources. The way to do this was through the control of two key industries, coal and steel, which would be "pooled", i.e. managed jointly in a "common market", between European countries and controlled by a new supranational authority.

This idea, proposed in the immediate aftermath of WWII by Jean Monnet, was realised through the Schuman Plan which saw the creation of the European Coal and Steel Community (1951) which linked "The Six" (France, Germany, Belgium, The Netherlands, Luxembourg, Italy).

Britain's rejection of these proposals was partly economic, in that Britain's economy, although weakened by the war, remained by far the strongest in Europe. Another reason centred mainly on the UK's rejection of the notion of supranational structures which would lead to a loss of sovereignty. Britain, it must be remembered, was what Churchill had called an "island fortress" and had not been invaded in WWII. In victory, Britain was one of the "Big Three" allied power, while also retaining important colonial possessions. This helps explain why Britain should be so reluctant to give up any degree of sovereignty, since it still believed in its status as a world-class power in its own right. Instead, Britain favoured integration in Europe along the lines of intergovernmental structures, i.e. co-operation between sovereign states without the need for a higher-level (supranational) political structure. Structures of this type included NATO or the Organisation for European Economic Co-operation (1948 – the organisation responsible for overseeing the distribution of Marshall Plan aid and trade liberalisation). While it is true, for example, that Winston Churchill had envisaged the creation of a "United States of Europe" as early as 1946, this federal vision was only applicable for the other countries of Europe. Britain, in Churchill's view, would simply remain a special "friend and sponsor" of an integrated Europe. As Churchill once stated : “We are with Europe but not of it.” A similar pattern was repeated in the wake of the 1950 Pleven Plan to create a European army to involve Germany. When the European Defence Community was proposed in 1952, which not only foresaw a European army, but also future supranational political structures, Britain wished to see the plan succeed but did not wish to join herself. This attitude began to characterise the British strategy of "co-operation without commitment" in Europe. (The EDC was eventually abandoned in 1954 when the French parliament voted against it).

Importantly, when ministers of "The Six" started talks in Messina in 1955 concerning further integration, Britain opted to send only a middle-ranking civil servant as their representative, which hindered negotiations and was felt as a snub by the other countries. Britain's reluctance to commit to political federation and their fear that joining the "Common Market" would harm trade relations with the Commonwealth (which still represented 2/3 of Britain's trade in 1956) led to the withdrawal of their representative from the talks. This meant that when "The Six" signed the Treaty of Rome to create the European Economic Community in 1957, it was without the participation of Britain. Given that Britain eventually found itself obliged to join the EEC at a later date, when it had less influence and power to impose the conditions of its entry, Messina represents one of Britain's key missed opportunities.

II. A Late Start : Britain and the EEC

Britain reacted to the creation of the EEC by setting up the European Free Trade Association (1960) along with Austria, Denmark, Norway, Portugal, Sweden and Switzerland. This corresponded to Britain's desired form of European integration, based on intergovernmental co-operation and a free trade area. (The difference between a "free trade area" and a "common market" is that the latter applies a common import tariff that all the countries have agreed upon. In a free trade area, the countries trade freely between themselves, but are able to set their own individual import tariffs. This was interesting to Britain as it still imported large amounts of certain Commonwealth produce due to preferential tariff agreements, whereas this trade would suffer if there were a common import tariff that no did not allow an exception for Britain.) However, EFTA proved a disappointing alternative.

Britain's reliance on Europe was growing as the UK’s former colonies were increasingly developing trade with other countries, meaning that Commonwealth trade declined in importance to Britain. But even though Britain was now outside the EEC (meaning the goods it sold on the continent suffered from high import tariffs) trade rose faster with the EEC than with EFTA, which was not proving a very significant market for British goods. So, if European trade, particularly with the high-growth EEC countries, was necessary for Britain's development, then the solution ultimately had to be to join the EEC as a member. In addition, as "The Six" gained in strength and influence, there was also the danger that Britain would find its diplomatic power weakened by the rise of this new "power bloc".

It was for this reason that the PM, Harold Macmillan, started to consider joining the EEC in 1960, with the British beginning formal talks on membership in 1961. However, a number of key problems complicated Britain's position. Firstly, British agricultural policy was very different from that in effect in the EEC which had elaborated an expensive system of subsidies, price regulations and import tariffs, the Common Agricultural Policy (1962), which protected farmers, but kept food prices high. Britain is a very industrialised country with the third lowest number of farmers in the world (as a percentage of population) after Kuwait and Singapore. The UK thus imported large amounts of foodstuffs and wanted neither to see the price of these increase, nor to see the British economy subsidising continental farmers. Secondly, there was the issue of Commonwealth trade. As we have said, Britain imported large amounts of some Commonwealth produce which, after entry into the EEC, would have to face higher import tariffs, thus harming trade with the Commonwealth. For example, in addition to raw materials and manufactured goods, much of Britain's cheap food was imported from Commonwealth countries with which the UK had previously negotiated preferential tariffs (e.g. lamb and butter from New Zealand). Thus, there was pressure on Britain from the Commonwealth to ensure the continuation of these preferential conditions, and pressure from the EEC to abandon them. Britain, as a founding member of EFTA also wished the EEC to give preferential trade conditions to the remaining EFTA countries. Then, there was also the matter of domestic politics: British public opinion could be mobilised by the fear of a loss of sovereignty, with the opposition Labour leader Hugh Gaitskell declaring in 1962 that joining the EEC would mean the end of Britain as an independent state, the end of the Commonwealth and "the end of a thousand years of history". Finally, there was the problem of the Anglo-American special relationship, with the UK's nuclear dependence on the US being made explicit in the 1962 Nassau agreement. It was this close association with the Americans and the white Commonwealth, that led to French fears that if the British were accepted into the EEC they would not be committed to Europe, but would be an American Trojan horse, i.e. the representatives of an Anglo-Saxon alliance. President De Gaulle, known for his suspicion of the Anglo-Saxons, vetoed the British application in 1963, declaring that Britain, or rather l'Angleterre, was too fundamentally different from the rest of the continent.

In 1966, Britain, now led by a Labour Government, declared its intention to apply again but faced a second humiliating veto at the hands of De Gaulle in 1967 (formally issued in 1968). Although Britain showed a more conciliatory attitude towards their second application, posing fewer conditions and being more flexible over questions of Commonwealth trade and the CAP (for which it wished a seven-year transition period), the British economy was by now in very poor health (e.g. a huge balance of payments deficit which ultimately forced a devaluation of sterling in late 1967). De Gaulle, while still fearing the Anglo-Saxon alliance, insisted that the application could not be accepted until the British economy had improved.

It is generally accepted that the departure of De Gaulle in 1969 was greatly instrumental in facilitating Britain's third, and successful. The process began later that year, with the membership process (acceptation by the EEC, ratification by the House of Commons etc.) culminating with Britain (plus Ireland and Denmark) becoming members of the EEC on January 1st 1973 under the very pro-European PM, Edward Heath. On the key issue of sovereignty Heath had made the questionable promise in 1971 that "there was no question of any erosion of essential national sovereignty". The question of Commonwealth trade had become less of a sticking point except for certain key Commonwealth exports such as NZ butter or Caribbean sugar and compromises were reached to allow transition periods before the CAP and the EEC fisheries policy (which would open up the large British waters to European fishermen) took full effect.

Nevertheless Britain's late joining is generally regarded as problematic, since Britain now had to face existing structures (the EEC budget) and future projects (such as the planned Economic and Monetary Union or EMU) that had been elaborated while Britain was not a member and thus unable to influence these developments. In addition, the economic growth rate of the EEC was now slowing – precisely the worst time to expect that Europe would solve Britain's economic problems, which indeed deteriorated further during the 1970s.

The terms of Britain's entry were then renegotiated by the next UK Prime Minister, Harold Wilson in 1975. This high-profile move, purportedly to obtain a "fair deal" for Britain, was another occasion of Britain being seen as an "awkward partner" since the issues concerned – import tariffs on NZ butter, the future of EMU, the size of Britain's EEC budget contribution – could have been resolved through the normal channels of continuous negotiation with its partners. Britain's European partners were annoyed at the contentious way the UK attempted to secure favourable conditions for itself, with the exercise being viewed as "the minimum of gain, for the maximum of irritation."

Despite polls which initially suggested a "No" vote, UK voters then resoundingly ratified their country's continued membership of the EEC along the lines of the re-negotiated settlement by a referendum in 1975. A strong turnout saw a decisive "Yes" victory with 67.5% of the vote. 2. 1975-Present Day

I. Margaret Thatcher and European integration

After the UK ratified its continued membership of the EEC, the process of European integration was again restarted by the Franco-German axis. These two key countries were pressing for a directly-elected European Parliament and monetary union, but again the reaction of the British Government was slow and obstructive, essentially over the question of sovereignty. Britain participated in the first Europe-wide elections in 1979, but only after delaying the entire process because it had not passed the necessary legislation in Parliament. On the question of a monetary union Britain declined, for now, to participate in the structures that would prepare the way for a common European currency.

One of the other problems that remained was that of the UK's contribution to the EEC budget, and the question became a bone of contention between Britain and Europe under Margaret Thatcher. The problem was not just one of personalities, although it should be clear by now that Thatcher, a very dogmatic personality, felt much more affinity with her fellow neo-liberal reformer Ronald Reagan than with the likes of the Socialist François Mitterand (from 1981 onwards). The question of the EEC budget centred on the belief that Britain was paying too much for the EEC in a number of respects. The essence of the EEC's budget was derived from import tariffs and levies and a fixed percentage (1%) of the VAT that national governments collected. But not only did this system make the UK the second biggest net contributor (i.e. it paid much more money than it received, essentially because little money from the CAP, which represented half the EEC's budget, went to the UK with its small numbers of farmers), it also meant the UK contributed more in percentage terms than it should have, given the size of its economy (a forecast for 1980 suggested that the UK would be contributing 24% of the EEC budget although its economy only represented 14% of the total wealth of the EEC.) A complicated rebate system, that is to say a reduction in the money owed to the EEC by the UK, was organised following British complaints in 1975, but even with this the UK continued to contribute an ever-increasing amount to the EEC.

It was in this context that Margaret Thatcher adopted the question of the budget. While she was a firm advocate of the common market in terms of trade, since the EEC represented a huge, prosperous market for British goods, she saw the budget question as a personal battle which involved defending Britain's interests in Europe. With the UK making a net payment to Europe of nearly £900m pounds in 1979/1980, Thatcher was eager to obtain a change in the system for calculating its budget contribution. She began a very forceful personal campaign to force the Commission to agree to a new rebate system that made sure that the UK's budget contribution would be greatly reduced in the future. Her strident, repeated message of "It's my money back I want back" led to a quick downturn in relations with the other EEC members, particularly when the UK began to block all other EEC business in order to put pressure on the Commission. Compromises were reached in 1980 and particularly in 1984 at the Fontainebleau summit when Margaret Thatcher finally settled for a rebate worth 66% of the UK’s net contribution, although the question did blow up again in the late 1980s when the UK's net contribution topped £2 billion for two consecutive years: 1989-1991). Again, Thatcher's domineering style had reinforced Britain's reputation of being a country that cared less for European integration than for its own personal advantage.

In the UK, Thatcher could nevertheless be seen as nobly defending her island from the policies that an unelected group of Brussels bureaucrats (the European Commission) were trying to force on the UK. Tensions increased as the Commission pressed forward their plans for greater European integration, which importantly went far beyond Thatcher's neo-liberal goals of liberalising and deregulating markets across Europe. The move towards some kind of "federal Europe" was desired by France and Germany, but firmly rejected by the UK which resisted as best it could any increased political powers for the EEC (such as a strengthened European parliament) or the planned Economic and Monetary Union.

II. Euro-sceptics

The battle became more personal from 1985 onwards when the Commission was led by the French Socialist, Jaques Delors who envisaged that the move towards a single European market (for goods, capital, people, labour) would necessarily be accompanied by a stronger political and social role for Europe. For patriotic British right-wingers who instinctively did not believe in a "federal Europe" (since it implied a loss of British power and prestige) and who were in favour of removing barriers to doing business, not adding more bureaucracy or social protection, this was unthinkable. A virulent Eurosceptic mood developed, particularly in the Conservative Party.

Thatcher was a model for the Eurosceptics, particularly after her 1988 speech in Bruges in which she directly responded to Delors' vision of European integration. Instead, she offered a Thatcherite version of Europe based on the "willing and active co-operation between independent sovereign states" and clearly rejected centralised political control or greater state intervention in the economy:

"We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level, with a European super-state exercising a new dominance from Brussels".

The Bruges speech led to the creation of a "Bruges Group" of likeminded Conservatives within the party, but, at the same time, aroused great hostility among pro-European Conservatives. The European question had begun to split the Conservative Party down the middle, a division which continues to weaken the Conservative Party to this day. This split was indeed one of the reasons for Thatcher's downfall. In 1990, responding to Delors' predictions about the future growth of European political institutions, Thatcher replied in Parliament with a decisive "No! No! No!" which so irritated her former Foreign Secretary, Geoffrey Howe, that he resigned from his frontbench post and started the leadership battle that saw her step down. Ironically, it was also over the course of the 1980s that the Labour Party dropped its official hostility to the EEC and adopted a strong pro-European position.

We must not, however, underestimate the strength of the Eurosceptics in Britain, a phenomenon which is encouraged by a strongly anti-European (and sometimes openly offensive) tabloid press. The most infamous expression of this appeared in 1990 when The Sun, used the very graphic headline, "UP YOURS DELORS" (Va te faire foutre, Delors!), and urged "its patriotic family of readers" to insult the French and reject their efforts to "run our country". The tone of the article is one of rabid xenophobia, with the French described as "feelthy" (mocking the French pronunciation of "filthy", i.e. "dirty") and "garlic-breathed"; in addition, the French are castigated because they "GAVE IN to the Nazis during the Second World War when we stood firm."

The mood of suspicion concerning anything European has continued to be a regular feature of the tabloids, and is focused on the profusion of a continuous stream of untrue scare stories over the supposed regulations and restrictions dreamed up by "barmy [crazy] Brussels bureaucrats". For instance, UK newspapers have printed alarmist, unfounded stories claiming that the EU will outlaw, among other things, bendy bananas, bright smiles, children's swings, yoghurt, Corgi dogs, double-decker buses, fireman’s poles or traditional British food such as "bangers" (sausages), "mushy peas", "smoky bacon crisps" or "mince pies". (For a full list of "Euromyths", visit http://europa.eu.int/unitedkingdom/press/euromyths/index_en.htm. On a similar note, it can be noted that when the pro-European cross-party group Britain in Europe published a booklet dismissing these rumours it was entitled Straight Bananas?). Despite the ludicrous nature of many of these stories, they are printed with incredible frequency in the biggest-selling UK newspapers and their capacity to negatively influence an already suspicious British public must therefore be borne in mind. More recently, the attitude of French President Jacques Chirac in the 2003 Anglo-American invasion of Iraq also led to a renewed outpouring of anti-French sentiment in the UK press.

III. John Major and Maastricht

Margaret Thatcher's successor was the mild-mannered John Major who, despite being her chosen successor, showed a more pro-European attitude. It was under John Major that Britain negotiated its position as regards the Maastricht Treaty (signed 1992, came into force 1993) which sought to strengthen the supranational political institutions of the new European Union (EU) and encourage the development of a common monetary, social and even foreign policy. Major worked hard to eliminate the references to a "federal" Europe which he knew would be unpopular in the UK, particularly with Conservatives. More importantly he secured for Britain two key derogations or "opt-outs", i.e. the right for the UK not to participate in elements of the Maastricht Treaty about which it remained uneasy. Thus, the UK was allowed to opt out from the "Social Chapter" of the Maastricht Treaty which aimed at providing a commonly-approved Europe-wide set of minimum workers' rights touching on matters such as working hours. The UK also chose not to participate in the planned monetary union, i.e. the move towards a single European currency. But despite Major presenting these concessions as a diplomatic victory for the UK, the ratification of the Maastricht Treaty only intensified the split within the Conservative Party.

In 1990 Thatcher had, perhaps surprisingly, allowed herself to be persuaded to commit Britain to one of the structures designed to lead the way towards a single currency. The Exchange Rate Mechanism (ERM) was a system in which the exchange rates of European currencies would not fluctuate freely, but would remain close to an agreed central rate (a small margin on either side of the official rate was allowed). This had the effect of indirectly linking the value of sterling to the German mark, the strongest currency in the European Union. It was generally agreed, however, that the UK, late as ever, had chosen a poor time to enter the system and that sterling was valued at an unrealistically high level. When speculators started to gamble on sterling declining in value, selling massive amounts of the currency, Britain suddenly found itself in the midst of a financial crisis. On "Black Wednesday" (September 16th 1992) this speculative pressure led the UK first to spend billions to try and maintain the value of sterling (by buying up the money being sold on the currency markets). It then had to admit defeat and pull sterling out of the ERM, effectively devaluing sterling. This was seen as an important incident of financial mismanagement and encouraged yet more Euro-scepticism, with Conservatives putting the blame on the Germans (who had maintained high interest rates throughout the crisis, despite this being detrimental to the UK economy which was suffering from a recession). British participation in a future European currency looked further away than ever.

III. Tony Blair and the future of Europe

At the head of a more solidly pro-European party which still claimed to be a "democratic socialist" party, one of Tony Blair's first actions on coming to power in 1997 was to adopt the Social Chapter of the Maastricht Treaty that the Conservatives had previously rejected. Blair also accepted stronger European institutions, but was still careful to protect Britain's "essential interests", i.e. by fighting to maintain Britain's right to a veto in certain areas, such as employment law or security matters, whereas the general move was towards more decisions being settled by a majority, rather than a unanimous, vote in the key executive body, the Council of Ministers. Britain's insistence on its veto in certain domains has continued to give rise to the situation of specific derogations being negotiated for Britain to allow progress for the other European countries. One significant example was the Schengen Agreement on borders and immigration policy for which the UK arranged an "opt-in" policy, i.e. the right not to participate for now, but to choose to do so at a later date if it wished. Thus while one can travel in the Schengen zone, say from Barcelona to Berlin, without a passport, this is not the case if one wishes to cross the English Channel.

On the matter of the euro, the name chosen for the future single currency, Blair stated as early as 1996 that the UK was not ready to accept such a move. Despite being a staunch pro-European Blair perhaps realised that the move to abandon the pound sterling would be politically risky for any British Prime Minister who would instantly be portrayed in the rightwing press as betraying the British people (see The Sun headline February 24, 1999: BLAIR PREPARES TO SCRAP THE £, Never mind what YOU think… it has already begun).

The official line from the Labour Government is that the Government agrees with joining the euro in principle but will organise a referendum on the euro only when the economic conditions are right, i.e. explaining that the UK's reticence is essentially due to economic, and not political factors. To this end, former Chancellor of the Exchequer Gordon Brown established a number of five "economic tests" to establish whether the UK's economy is converging with those of continental Europe. With the Labour Party now in power for over ten years (2008), there is still no sign of if and when these tests will be met or when a referendum might be held.

Thus, over fifty years after their decision not to join the ECSC, the UK is still a country that finds it difficult to wholeheartedly support institutions and reforms that might be perceived as taking sovereignty or status away from Britain. What it sees as caution and the legitimate protection of its own interests, other European countries view as an irritating incapacity to commit themselves to full integration in Europe. However, this reticence does not stop Blair from describing how the UK now seeks to again play a "leading role" at the "heart" of Europe. This sort of rhetoric may seem similar to the mistaken beliefs of the late 1940s that the UK was still a superpower capable of dominating Europe while remaining separate from it, but on inspection a different sort of argument emerges.

One aspect is how the UK seeks to use its position as the key US ally in Europe. Speaking in 2003, Tony Blair promoted the image of the UK as a potential bridge between the USA and the countries of the EU:

“Whenever they are divided, the forces of progress, the values of liberty and democracy, the requirements of security and peace, suffer. We can indeed help to be a bridge between the US and Europe and such understanding is always needed.”

Thus rather than being stuck uncomfortably in the middle between two sets of allies, the UK should benefit from its unique position as being at the intersection of these two spheres. However, it should be noted that Tony Blair’s and George Bush’s political reputations were so tarnished by the Iraq war that it was difficult to see how the UK could manage to attract the support of EU countries on issues.

In an interview in The Economist (February 19th 2000), Tony Blair describes how the UK will now take the lead in Europe by showing the old Franco-German axis of the necessity of reforming labour markets to provide greater flexibility (e.g. it should be remembered that in 1997 election Blair boasted in the Daily Mail of how, if elected, "Britain will remain with the most restrictive trade union laws anywhere in the Western world"). In the Economist article, Blair describes his position as one of encouraging the creation of a Europe of "jobs, competitiveness, economic change and dynamism" instead of one characterised by "heavy-handed intervention and regulation".

(It should be remembered that the UK, despite finally introducing EU Working Time Directive in 1998, secured an opt-out in this area. Thus although EU law fixes the upper-limit of working hours at 48 hours / week, UK employees can waive this right, thus “choosing” to work up to 78 hours / week. EU moves to remove this opt-out were met with stiff resistance by UK firms and the UK government.)

This desire to reform Europe corresponded to the objective of the 2000 Lisbon Agenda by which the countries of the EU aimed to make Europe into the world's most dynamic economy, notably by liberalising services (cf. the Bolkestein Directive). It is in this perspective that Blair found allies on the right in Europe, such as Aznar in Spain, Berlusconi in Italy, or in the former Soviet bloc countries who proved keen converts to capitalism. Britain's choice of Commissioner, a former minister and close friend of Tony Blair, Peter Mandelson, who now represents the EU on trade matters, seems to confirm this neo-liberal orientation that Blair wishes to give the EU. It was, after all, Peter Mandelson who personally declared in 2002 that "we're all Thatcherite now" referring to New Labour's commitment to labour flexibility, prudent public finances and open markets.

In December 2005, after a fierce diplomatic battle with other EU countries (particularly the French), Tony Blair finally agreed to give up part of the UK’s historic budget rebate, in effect agreeing to pay approximately €1b a year more to the EU (the rebate is to drop to €6b per annum from around €7.7b.) The rebate has always been unpopular. The other EU countries in effect have to subsidise the UK’s rebate, but the French alone pay around half, hence the strong French opposition to it continuing. The UK is now a much wealthier country than it was in 1984 when the key rebate deal was agreed and so maintaining it is politically harder to justify, even if the UK remains a large net contributor to the EU. Blair had been hoping to secure any reduction in the British rebate in exchange for a fundamental reform of the EU budget, including a radical reduction of CAP payments (France’s farmers are the main beneficiary, hence France’s strong opposition to reform of the CAP) which he felt were an anachronistic anomaly for a forward-looking EU which should be investing in new technologies and research, not agriculture. They will now have to wait for the budget negotiations of 2008/9 to raise the question of farm subsidies and EU structural aid payments to poor regions.

In the UK, the Conservatives, meanwhile, remain desperately weak, not having been able to resolve the deep split that remains over the question of Europe. To make matters worse for the Tories, a new rightwing anti-EU party now exists in the UK, named the United Kingdom Independence Party (UKIP). Despite coming third in the 2004 European elections in the UK, UKIP has since then been greatly weakened by internal divisions over leadership and has generally lost credibility. Nevertheless, it must be noted that faced with what is felt by some to be Europe's intolerable intrusion into the lives of the British, a large number of the most extreme voices on the right have been favourable to UKIP's plan to withdraw from the EU altogether.

Conclusion

In 2005, a constitution (or constitutional treaty) was presented to the 25 members of the European Union. It contained a number of structural modifications such as a slightly strengthened Parliament and reformed decision-making procedures which allowed more measures to be adopted by majority votes among EU member countries (by reducing the domains where unanimous decisions – which allow individual countries to veto measures – are necessary). Another section detailed citizens' so-called "fundamental rights", while the final, largest part of the treaty went back over all the existing treaties compiling and completing the details of specific policy, in particular, how the Union’s free market principles of open competition were to be respected.

The UK was set to hold a referendum on the proposed European Constitution some time in 2006, but every single opinion poll predicted that the constitution was going to be rejected by British voters. Tony Blair, who was the one to have promised a referendum on the subject, had been in a difficult spot since he had staked his reputation on trying to achieve a "Yes" vote for a constitution which he largely agreed with, and which he saw as enabling the modernisation he judged necessary for Europe. His arguments to the British were that the constitution should be supported as it would allow the necessary liberalisation of services and labour without in any way giving rise to the strong political institutions that would signal the beginning of a "Federal Europe". The mere mention of a "constitution" was, however, enough to put off many Britons (remember that Britain is one of the only countries in the world not to have a written constitution). The British again feared an authoritarian, European proto-state telling them how their country should be run. Before the referendum could take place, however, the French (and then the Dutch) voted against the constitution in May 2005. In France, much of the opposition came from leftwingers who feared that the EU proposed by the constitution was too economically liberal and lacking in the strong democratic political institutions which would take power away from national member governments and give it to the people of Europe. Quite the contrary was true in the UK, and indeed in many other countries of the "New" Europe in Eastern Europe. If the constitution was certain to be rejected by the British, it was because it was felt to be moving too far politically, by taking a firm step towards a federal Europe, and not moving far enough economically, i.e. by not getting rid of rigid social protection considered harmful for jobs and the economy.

The Constitutional Treaty was then replaced by the Lisbon Treaty (2007) which sought to include many of the functional changes advocated by the initial treaty (e.g. a foreign affairs representatives, improved qualified majority voting) but without the binding, state-like or federal overtones of a “constitution” which had unnerved some populations. Under Prime Minister Gordon Brown, who took over from Tony Blair in 2007, the UK Government signed the Lisbon Treaty, but controversially decided not to submit the treaty to a referendum, even those this had been a manifesto promise. The UK government now argued that significant differences separated the two treaties (in contradiction with comments made by the initial treaty’s author – Valérie Giscard D’Estaing) and that British national interests were in any case secured by the insistence on a number of British “opt-outs”. In particular, the UK, worried about the status of its common law legal system, wished to see that the Charter of Fundamental Rights would not be fully applied and could not be used to claim the existence of any new civic rights in UK law. The UK also secured opt-outs in certain police and judicial matters, meaning that they maintain their veto (as opposed to being subject to qualified majority decisions) and will not be forced to apply certain matters of EU law relating to police and criminal law.

The arguments over how the European Union should function, how enlargement should proceed, or indeed what the EU is actually for, remain. The euro has, in practical and symbolic ways, brought many of the peoples of the EU one step closer, but monetary union has not led to strong economic growth in the Eurozone, while Britain, with its "isolated" Sterling, has an economy which has for years been enjoying resilient, almost, impertinent growth. As Europe faces both political and economic crises, the British often feel vindicated in their position on the margins of Europe. Hostile attitudes to Europe are commonplace and are a permanent feature of much of the UK press (see the headline of the Daily Express “Mr Bean Signs Away our Freedom” commenting Brown’s signing of the Lisbon Treaty in December 2007). The old arguments about supranationalism, sovereignty and free trade which have for decades formed the basis of Britain's position on European integration, not do not look like weakening any time soon.


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