Economic and Monetary Union (EMU)
Protocol 25 of the Maastricht treaty cleared the UK and Denmark from the chapters related to the Economic and Monetary Union, exempting them from using the euro currency.
For both countries, this means monetary policy remains a domestic issue.
When the financial crisis broke out in 2008, this allowed the UK to introduce quantitative easing much earlier than the the eurozone. Britain is also allowed to run a much higher budget deficit than other member states, as it not subject to the Stability and Growth Pact, which caps public deficits at 3% of GDP.
Former Prime Minister Tony Blair was interested in joining the euro when he first came to power in 1997. But it failed the five economic tests to prove it was in the national interest as laid out by the then-Chancellor of the Exchequer, Gordon Brown.
While none of the major political parties currently want to join the euro, being out also has its downsides.
This became particularly obvious during the eurozone debt crisis, when leaders of countries using the single currency held regular meetings between themselves, leaving Britain outside of the room.
This fuelled concern in Britain that eurozone members would club together and skew the EU single market to their advantage, leaving the UK missing out on the benefits of what it regards as the most important aspect of EU membership.
Yet, this isolationism is also largely self-inflicted. On monetary matters, the UK is unbound by decisions made the European Central Bank or the European System of Central Banks. In return, the UK’s voting rights in the European Council are suspended for issues relating to eurozone matters.
Specifically, the UK has no say over the fixing of exchange rates, as countries join the euro. It also has no say on the appointment of the six executive members of the ECB board, including the president and vice-president.
Schengen agreement (with Ireland)
Britain is not a member of the Schengen area. Unlike when traveling across the rest of the EU, passports must still be checked when crossing the UK border.
Ireland also didn’t sign up to the Schengen zone. It chose to continue with the Common Travel Area instead. The common travel area created a borderless crossing between the Republic of Ireland and Northern Ireland and around the rest of the UK. Partly due to concerns over the peace process Ireland opted out of the Schengen zone and, like the UK, has no plans to change the current arrangement.
Under Protocol 19 of the Lisbon Treaty the UK has three months to react to any EU proposal submitted under the Schengen agreement. If it doesn’t alert the Council it wishes to opt-out it is automatically bound by the new ruling.
Charter of Fundamental Human Rights (with Poland)
The Charter is divided into seven ‘titles’ entitled ‘Dignity’, ‘Freedoms’, ‘Equality’, ‘Solidarity’, ‘Citizens’ Rights’, ‘Justice’ and ‘General Provisions’.
The final text came about after seven years of negotiations and takes into account the previous case law of the European Court of Justice (ECJ), elements of the European Convention on Human Rights and other EU documents including the European Social Charter (ESC).
The UK obtained a “clarifying protocol” which states the Charter “does not extend” the ability of the European Court of Justice to find UK law inconsistent with the Charter.
This exemption was obtained because of fears the Charter would infringe on UK labour law.
Freedom, security and justice (with Denmark and Ireland)
The UK has the right to opt-out of legislation relating to what is known as justice and home affairs.
Protocol 36 of the Lisbon Treaty grants the UK has the right to opt-in/out of individual pieces of legislation coming under a Title V legal base.
There has been recent controversy over exactly what the UK deems JHA and what the EU do. For example upcoming legislation on legal highs, which are an area dealt with domestically by the UK Home Office will not be under Title V. Instead they will come under rules governing the single market.
Home Secretary Theresa May has accused the European Commission of “gaming” the JHA issue and deliberately putting legislation under different legal bases to try and circumvent the UK’s opt-out. However a House of Lords review found no evidence of this.
The disagreements relate to the use of the term “pursuant to” in the treaty. UK government lawyers have repeatedly claimed a different interpretation of the term, which gives a broader definition. They claim it means any legislation with JHA content.
This has been regularly overturned by the European Court of Justice.
Earlier this year, Lord Anderson accused the government of being in “splendid isolation” with its interpretation. The then Justice Minister, Chris Grayling said the government was upholding the intention of the protocol. Marise Cremona, Professor of European Law at the European University Institute said the government’s position was “misconceived, legally speaking.”
As with other opt-outs the UK has three months to decide if it wants to utilise it. If it decides to opt-out it can opt back in again at any time. However, once legislation is opted-in to it cannot be opted out of again.
The UK originally had an opt-out from the social chapter of the Maastricht Treaty, which covers areas such as worker’s pay and health and safety. However, following Labour’s landslide victory in the 1997 general election, Tony Blair opted-in to the chapter.