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26/05/2016

MEPs fear Brexit will trigger ‘perfect storm’ and EU breakup

Euro & Finance

MEPs fear Brexit will trigger ‘perfect storm’ and EU breakup

Leading MEPs have expressed the view that a possible Brexit would trigger the collapse of the European Union, EurActiv has learned.

The view that Brexit would trigger the breakup of the European Union was expressed during the Conference of Presidents of the European Parliament held yesterday (16 February). The EU is facing overlapping crises and a rise of populisms that may herald for the “perfect storm” and the collapse of the Union (see background).

British Prime Minister David Cameron was expected to attend this meeting, but cancelled his plan, and met instead with the leaders of the two largest groups, the EPP and S&D, in the UK permanent representation to the EU.

At the Conference of Presidents, leading MEPs criticised Cameron for the timing of the referendum, expected in June. Even if a deal would be agreed over the summit of all 28 EU leaders in Brussels on Thursday and Friday which would allow him to campaign for the UK to stay in the EU, there would be little time to impact on the voters, leading MEPs argued.

Cameron entered the final stretch of negotiations to keep his country in the EU yesterday, meeting the President of the European Commission Jean-Claude Juncker who insisted that the so-called Brexit is not an option.

Downing Street said there “are still details to be nailed down” after Cameron held talks with EU figures to win them over to a package of changes he says Britain must get to avoid leaving the bloc.

Britain’s Wednesday newspapers reported that part of the plans, to curtail benefits for migrant workers, had been rebuffed by Eastern European countries the Czech Republic, Hungary, Poland and Slovakia.

“Eastern threat to EU deal” was the headline of i newspaper, while City AM said Cameron had been “Eastern blocked”.

If Cameron gets what he wants there, he will take the deal into a proposed referendum, most likely in June. If Britons vote to remain in the EU, then the deal would return to Brussels to be put in legal form.

The European Parliament would be closely involved in that process alongside the Commission, the EU’s executive arm, and the bloc’s 28 leaders.

Schulz, a veteran and fervent supporter of the whole European Union project, pledged that the European Parliament would “move very quickly on the proposals” put forward, but added: “I cannot make any guarantees on the outcome.”

A source in the European People’s Party, the biggest group in parliament, dismissed accusations by British eurosceptics that MEPs would unravel the deal after the referendum.

Cameron fails to get EU Parliament assurances over emergency brake

UK Prime Minister David Cameron today (16 February) in Brussels failed to gain assurances from European Parliament leaders that they would pass unchanged the so-called emergency brake mechanism to stop new EU migrants to Britain claiming in-work benefits.

EurActiv.com

“If we have a ‘yes’ from the British voters, then we will deliver,” he said.

Strong opposition

The discussions in Brussels are part of a frenetic merry-go-round of diplomacy ahead of this week’s summit.

Juncker, speaking before meeting Cameron, said he refused to even entertain the idea of Britain leaving the bloc.

“If I would say now that we have a plan B, this would indicate a kind of willingness of the Commission to envisage seriously that Britain could leave the European Union,” Juncker said.

“We don’t have a plan B, we have a plan A. Britain will stay in the European Union as a constructive and active member of the Union.”

Cameron made no public comment during his four-hour visit to Brussels.

His most controversial proposal is to restrict welfare payments for four years for EU citizens working in Britain.

Eastern EU member states such as Poland, which has hundreds of thousands of workers in Britain, say such a measure would discriminate against them and undercut the core bloc principle of freedom of movement.

Cameron’s demand that EU countries that do not use the euro, like Britain, have safeguards against closer integration of the single currency area has run into serious opposition, especially from France.

An opt-out from the EU’s mission of “ever closer union” and strengthened national sovereignty are also proving unexpected controversial.

The prime minister agreed to hold the referendum largely to head off gains by the anti-EU UK Independence Party, which was exploiting sharp differences over Europe within his own Conservative Party.

Separately, Britain’s Prince William on Tuesday made a speech that the British media interpreted as backing continuing membership of the EU.

“For centuries Britain has been an outward-looking nation,” said the prince, the grandson of Queen Elizabeth II.

“We have a long, proud tradition of seeking out allies and partners… Our ability to unite in common action with other nations is essential, it is the bedrock of our security and prosperity.”

A spokesman for his Kensington Palace office insisted the speech “was not about Europe.”

The royal family does not usually intervene in political issues due to its constitutional position but has been known to issue carefully worded pronouncements on sensitive issues.

Background

The European Union is being battered by a perfect storm of crises that threaten to rip apart the peaceful and prosperous 28-nation bloc that rose from the ashes of World War II.

'Brexit'

Britain's possible exit from the bloc may be the most imminent risk. Prime Minister David Cameron is demanding controversial reforms of his peers in return for persuading Britons to vote to stay in the bloc in a likely June referendum.

European Council President Donald Tusk has been touring European capitals in a bid to forge a deal that is supported by the member states. A key sticking point is an "emergency brake" that would allow Britain to limit welfare benefit payments for four years to workers from EU countries in Britain.

Central and Eastern European countries like Poland and Romania complain the plan would discriminate against the large numbers of their citizens who work in Britain and undermine the core EU principle of freedom of movement.

Others such as France, meanwhile, oppose Cameron's demands for non-euro Britain to have special safeguards to ensure its lucrative finance sector in the City of London does not suffer as the 19-nation single currency bloc binds closer together. Paris has made very clear it is totally opposed to anything which would give London a veto over eurozone decisions.

Migrant crisis

EU member states are sharply divided over how to cope with the biggest movement of refugees and migrants since World War II, after more than one million arrived in the bloc last year, mostly from Syria and other war-torn countries.

The pressure is prompting member countries to build fences or reintroduce checks at internal borders that threaten to eliminate the passport-free Schengen zone, a hallmark of European freedom and unity.

The EU's cherished principle of solidarity has so far failed to make itself felt as the European Commission struggles to get member states to relocate 160,000 asylum seekers from frontline countries such as Greece and Italy.

Eastern European states are among the most prominent opponents of the plan and are pushing efforts to bolster EU external borders, such as in Greece, which is the migrants' main gateway to Europe.

Eurozone debt crisis

The eurozone debt crisis, which peaked in 2012, has left several southern member states economically devastated, especially Greece, piling on the misery in an area which is also hardest hit by the migrant crisis.

While debt-laden Greece finally got a third, huge bailout in July after months of bad-tempered negotiations, analysts say many of the single currency's underlying problems remain.

Greece's colossal debt is probably unsustainable, analysts say, but getting it reduced is proving very difficult as creditors demand more painful reforms before they will cut Athens any slack.

Portugal received a massive international debt bailout in 2011 that saved it from defaulting, but in return the country has also had to introduce a string of unpopular austerity measures now repudiated by voters.

Many other eurozone countries have also suffered, as national debt levels nearly everywhere have increased sharply.

Recent signs that the single-currency economy is slowing, buffeted by global market turmoil and concerns over the China outlook, are clouding the prospects.

Security threats

From Russia's intervention in Ukraine, to the spread of the Islamic State group on the continent's southern and eastern periphery, to terrorist attacks in European capitals, the EU is facing a major string of security threats.

Poland and the EU's small Baltic member states fear Russia may want to reassert its Soviet-era control over them, with no sign of a lasting peace taking hold in Ukraine.

Clashes between pro-Russian separatists and government forces in eastern Ukraine have claimed more than 9,000 lives since April 2014.

The EU is meanwhile trying to bolster efforts to solve the apparently unending war in Syria and to establish a national unity government in Libya, where Islamic State jihadists have recently made some significant ground.

IS claimed responsibility for the November 13 attacks in Paris that killed 130 people and wounded hundreds more.

The EU is behind member state efforts to boost security and staunch the flow of an estimated 5,000 Europeans who have joined jihadist groups in Syria and Iraq, some of whom have returned to Europe to launch attacks.

Timeline

  • 18-19 February: EU heads and state of government meet in Brussels for a Council summit on the British membership renegotiation.
  • 23 June 2016: Rumoured favourite date for referendum.
  • End of 2017: Final deadline for holding the UK referendum.