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In the Battle Over Europe David Cameron Has Already Lost

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So now we know what David Cameron's big speech on Europe was all about: an In/Out referendum on membership of the European Union (EU) in 2017, if the Conservative party wins a majority at the next election in 2015.

At the heart of the prime minister's big speech yesterday morning was also a barely veiled threat to France and Germany: Give me room to renegotiate Britain's membership of the EU or we're off!

Unsurprisingly European leaders have reacted with irritation akin to telling Cameron to stop behaving like a spoiled brat! Never since the days when Margaret Thatcher led Britain has this country's standing with its neighbours been so low. Most Europeans - whether they are businessmen or politicians or simply ordinary citizens - are incredulous at Cameron's sniping.

Britain's apparent attitude is almost beyond the comprehension of most Europeans who look at the EU as nothing other than a force for good even in spite of the Eurozone crisis. Many European citizens may grumble about their current privations; many may blame austerity; their own governments or Germany, but few contemplate leaving the union. That a country like Britain, which has suffered far less than countries like Greece since 2008, should want to leave appears nothing more than a childish tantrum.

At home the prime minister will no doubt win plaudits among the right leaning press and among many of his own Conservative party members for taking a bold, decisive stance on the EU. But at the same time he has now played his hand and the leaders of the rest of the Eurozone in particular, because it is largely the 17-member currency union that matters here, as opposed to the wide European Union, still have to play theirs.

Like the most desperate poker player, Cameron has gone all in and bluffed with a weak hand. Angela Merkel and Francois Hollande only have to call it. But more about that later.

The prime minister will think that he has pulled off a great trick. By committing to a referendum in 2017 he may think he has calmed the baying mob that are the Eurosceptics within his own party while also claiming to have listened to the desires of the electorate to hold a referendum on EU membership.

He must hope that in doing so he will have put the matter to rest for the next two and a half years. He will also hope that the referendum will give his party something to campaign on other than the economy come the next election. And with Labour all at sea on the issue of a referendum over EU membership he will no doubt believe he can create some very real dividing lines between the Conservatives and Labour on the issue. Labour may be forced to support an In/Out referendum at the next election despite Ed Miliband's reluctance to do so, for fear of being on the wrong side of the argument. And the Liberal Democrats, having campaigned on a pledge to hold an In/Out referendum at the last election will most likely support one again in 2015 despite Nick Clegg's assertion that his coalition partner's speech was not currently in the national interest.

Cameron may also believe he has done enough to diminish the threat from Ukip to the Conservative party's chances of winning an outright majority at the next election.

In almost every single one of his calculations he is wrong.

The threat to the Conservative party from Ukip transformed from the single issue of Europe a long time ago. Undoubtedly, some people that may have been tempted to vote for Ukip because of its stance on Europe will now waver and could come back to the Conservative party but nowhere near as many as Cameron would hope. Those that are likely to vote for Ukip in 2015 will do so because they see the prime minister as too liberal, too keen to back gay marriage, not Christian enough and having done little to protect the country from runaway immigration from eastern Europe.

Meanwhile, a referendum on membership of the EU will fail to draw attention away from the parlous state of the economy. If the economy has failed to achieve growth by 2015, if Britain loses its triple A credit rating and if the Conservatives run on a platform of further cuts and more austerity well into the next parliamentary term, as currently seems highly likely, the electorate may well decide the Conservatives have no place running the country at all. Five years after he blamed Labour for the economic crisis it will be extremely hard for Cameron to continue to label his opponents as economic incompetents if his own plan hasn't worked.

It is also hard to truly establish just how much the electorate want a referendum on membership of the EU. Yes many opinion polls have in the past suggested the majority of people in the UK would vote to leave the EU if a referendum were held tomorrow. That was until Monday when a YouGov poll showed that now 40% of the electorate would vote to stay in the EU if a referendum were held tomorrow versus 36% who would vote to leave.

I suspect if a referendum is ever held, and there is no guarantee one will be, the most likely outcome will be the electorate will vote to stay, regardless of whether Cameron successfully renegotiates Britain's membership of the EU or not.

It has long been clear that Europe is an issue for the Conservative party rather than the nation.

Yes the public likes to have a moan about silly regulations handed down from Brussels about bananas but if the public were truly enraged about being part of the EU Ukip would win a landslide at the European Parliamentary elections and turnout would be huge.

Ukip are very unlikely to win such a landslide and European Parliamentary elections pass without much comment most of the time. Asked to name their MEP 99.9% of people would struggle. They would have difficulty naming their own Westminster MP as it is. Turnout is always a good indication of the level of engagement among voters and voters simply aren't that engaged. When Cameron talks about wafer thin support for Europe across the country I don't know who he is talking about - the home counties? Most people simply don't care enough about the topic one way or another.

So Cameron will be praised by some newspapers but longer term he has given ground to the Eurosceptic wing of his party and having done so once, what is to stop Cameron's more rebellious MPs pushing him around a bit more on another topic. Fox hunting perhaps? Privatisation of the NHS? Having bowed to pressure from his back benches, there is no knowing what else Cameron may concede ground on now.

The promise of a referendum shows Cameron has lost control his party and has failed to stop it 'banging on about Europe' as he had once hoped.He leads a party more divided now than at any time in the last 20 years. The Conservative party's obsession with Europe threatens to destroy it more certainly than anything else, just as Irish Home Rule destroyed the Liberal party 100 years ago.

Then, finally, we return to the poker game that Cameron has already lost. He has nothing with which to negotiate with France, Germany and the other EU members. The threat of Britain leaving the EU is a fairly empty one given Britain brings very little to the EU in the first place.

France and Germany cannot afford to let Britain renegotiate its membership terms because in doing so they would set a precedent. If Britain can renegotiate, why not Spain? Why not Greece?

Moreover, Cameron's ace card, as he sees it, is the threat of Britain's veto. If Britain doesn't get what it wants on renegotiated membership then it will veto France and Germany's plans for greater fiscal and political union.

But by promising an In/Out referendum he has also shown France and Germany that they simply have to play a waiting game. Britain can use the veto and it will stall progress but what happens when France and Germany refuse Cameron everything he wants and he is forced to hold a referendum on the terms of Britain's existing membership of the EU?

And if the British public vote to leave the EU? Then France and Germany can press ahead with ever greater union without the worry that Britain will once again veto any proposals. France and Germany will not want such a large member to leave the union. In the short term it will suggest the EU has failed. But if the EU has by 2017 emerged stronger than before the start of the Eurozone crisis, then Germany and France may well simply shrug their shoulders say it is a pity Britain wants to leave the club and press ahead with their reforms. Progress in the EU will be delayed but will not be stopped.

By setting the date for a referendum so far in the future the prime minister is either hoping he may never have to hold it because he lost the election in 2015 or that the things will have moved on to the point that a referendum becomes irrelevant and unnecessary.

If he wins the election in 2015 he can expect the two years between the election and the referendum to be about nothing else but the referendum. If he loses the election he it won't matter, he won't be leader of the Conservative party. As it is, for the next two years Cameron will struggle to talk about anything other than Europe. Like John Major before him Cameron is a now a lame duck prime minister.