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Will Cameron's deal with Merkel placate his party's sceptics?

German agreement to relax the working time directive is a real concession but maybe Tory backbencher

An outline is emerging of a deal between David Cameron and Angela Merkel over plans to revise the treaties that underpin the European Union.

It appears that over lunch at the end of last week, two leaders discussed the possibility of Britain refraining from serious obstruction to German plans for new rules governing how euro member countries manage their budgets. In exchange, Germany would not object to Britain seeking relaxation of the working time directive - the EU-wide regulations designed to limit the number of hours per week employees work and protect entitlements such as paid leave.

Leaving aside the question of whether Britain would really be better off or happier with a more dilute version of the directive (the UK already has the right to opt out of aspects of it) and looking purely in terms of what is diplomatically feasible for the UK, this seems like a decent compromise. Britain is not a euro member country and already has a reputation for surly reluctance when it comes to the "European project". The way the European debate has unfolded in Westminster in recent weeks has left our continental partners in no doubt that we do not see ourselves as integral players in the EU game. We want concessions on "repatriation of power" - largely so that the prime minister can show symbolic trophies to an implacably euro-phobic wing of his party - and must threaten to be obstructive in order to get them.

For countries that are in the euro and for whom the debate about fiscal integration and more rigorous rules of enforcement is existential, Britain's implicit threat to hold the process hostage must be classified somewhere on a spectrum between absurd and vindictive. David Cameron surely understands this (no doubt Merkel made it clear). He cannot veto a new EU treaty incorporating new eurozone rules without very seriously damaging Britain's diplomatic relations on the continent. What he needs is some kind of concession that is big enough to look like a loosening of ties with Brussels so that, when a revised treaty is agreed by the European Council, Tory backbenchers don't go berserk and demand a referendum on it.

The Working Time Directive is a good candidate. The Tories have always hated European influence on labour protection. Conveniently, the Lib Dems are also hostile to this particular bit of European regulation, so there is no risk of coalition tension. Merkel can be relaxed about it since it is marginal to her concerns and has no immediate bearing on budget discipline in the euro zone.

So the big question is whether it would be enough to persuade Tory backbenchers that Cameron is honouring his pledge to use treaty negotiations as the vehicle for repatriation of powers. If they sneer at this deal and insist that the Prime Minister go back for more, it would suggest that compromise is not really on their agenda at all and what they are really after is a kind of show-down that would make Britain's participation in EU structures as currently configured impossible.

Tags:Europe