A new chapter in EU integration, whether Britain likes it or not

The new EU treaty is bound to contain something that British sceptics think requires a referendum.

There will be a new treaty. It will commit euro members to fiscal discipline. It will be largely designed by the 17 current members of the European single currency. Others can join in if they want to. Those are the essential components of the deal announced today by German Chancellor Angela Merkel and French President Nicholas Sarkozy after crisis talks in Paris.

In a sense this is exactly what had been expected. Discussions had been pointing in this direction since the end of last week. But the fact that the two leaders managed to say it at the same time in a live press conference lends the project a certain solidity and irrevocability. Something along the lines of what has been pledged might actually happen. Markets certainly seem reassured. The two leaders have promised monthly summits stretching ahead into the future (the preferred deadline is March 2012) to hammer out the details until a treaty is agreed and a new institutional and legal basis for the euro is fixed. The crucial fact as far as Britain is concerned here is that those summits will be convened among euro member heads of government. That is reasonable enough given it is their currency in crisis.

But Merkel did not describe these new summits as euro-fixing technical negotiations. She made it clear they would have a wide-reaching economic agenda to look at ways to stimulate growth through market reforms. That assertion spells disaster for David Cameron. His main demand in this process was to be included in the conversation about the future of the single market, to make sure Britain's vital interest in that aspect of European Union economic management was not overlooked in the hurry to redesign the single currency. If there are to be monthly euro-members-only summits looking at the whole growth and reform agenda it seems certain single market rules are going to get caught up in the negotiations. There are all sorts of ramifications if Britain isn't at the table, starting with the likely acceleration of moves on banking and finance reform to shift the balance of commercial power from the City of London to Frankfurt and Paris.

At a briefing shortly after the Merkel-Sarkozy press conference, the Prime Minister's spokesman made it clear the UK government's position is to examine more closely the content of what Germany and France are suggesting before forming a view on whether it would be better dealt with as a 17-member (euro only) treaty or a 27 member (full EU treaty). That position won't hold for long. It doesn't look as if Britain has much of a say anyway, and either outcome gives Cameron a headache. If he can persuade the European Council later this week that all 27 EU members should be working on a new treaty, he invites his backbenchers to present him with a shopping list of powers to repatriate during the talks. If he accepts that it should just be a 17-strong euro member treaty negotiation, he risks surrendering Britain's seat in a discussion that is plainly vital to our national economic interest. That process might still produce a document that has to be ratified by parliament. One way or another, the clamour for a referendum will grow.

Merkel and Sarkozy appear to have agreed a fast-track eurozone consolidation on a take it or leave it basis as far as the rest of the EU is concerned. From the French and German perspective it now looks as if the future of the European Union and the future of the single currency are the same thing. They are embarking on a new phase of integration. The implicit message to Britain: come along if you must, but stay in the back seat because we're driving.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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After a year of division, a new centre is emerging in Labour

Clive Lewis, Lisa Nandy and Jonathan Reynolds show how factionalism is being transcended. 

On 26 September, Clive Lewis sat onstage at Labour’s conference in Liverpool and puffed out his cheeks in exasperation. He had just been informed that a line in his speech as shadow defence secretary committing the party to Trident renewal had been removed by Jeremy Corbyn’s office. Such was his annoyance that he was said to have later punched a wall in anger ("I punched no walls," he told me when we recently met). 

For Lewis, however, the feud proved to be a blessing. Hitherto hostile MPs hailed his pragmatism and deference to party unity (he is a long-standing opponent of Trident renewal). The former soldier also affirmed Labour’s support for Nato and for collective self-defence. “The values that underpin Nato are social-democratic values: liberty, democracy, freedom of expression,” Lewis, an early Corbyn ally, told me. “Let’s not forget, it was Clement Attlee and the New Deal Democrats who initiated and set up Nato. It’s about being in it to win it. It’s about winning the arguments inside Nato and making sure that it’s a force for good. Some people would say that’s impossible. I say you’ve got to be in it to be able to make those changes.”

In October, Lewis was replaced as shadow defence secretary by Nia Griffith and became shadow business secretary. Many regarded the appointment as a punishment. “Do I think there was an ulterior motive? I’ll never know,” Lewis said. “I’m confident that the reason I was moved – what I was told – is that they wanted me to be able to take on a big portfolio.”

Whatever the truth, Griffith has since said that Labour’s next general election manifesto will include a commitment to Trident renewal and will support multilateral, rather than unilateral, disarmament.

Many MPs had long feared that the divide between them and their leader would prove unbridgeable. Some contemplated standing on bespoke manifestos. Yet with little drama, Corbyn has retreated from a conflict that he could not win. Labour’s conference, at which the largely pro-Trident trade unions hold 50 per cent of the vote on policy and which the leader has vowed to respect, would never have endorsed unilateralism.

“Jeremy Corbyn deserves credit for that,” Lewis said. “Everyone understands that his position hasn’t changed. He still believes in unilateral disarmament . . . But he’s also a democrat, and he’s a pragmatist, despite what people say.”

In policy terms, at least, Labour will contest the next general election as a less divided party than many anticipated. As Corbyn’s team has long emphasised, there is unity around issues such as opposition to spending cuts and support for rail renationalisation. A new centre for Labour, embodied by Lewis, is emerging.

“When I became an MP,” the 45-year-old told me (he was elected in Norwich South in 2015), “to be anti-austerity, to say that cuts don’t work and they’re bad economics, meant you weren’t in touch with reality, and that you had no interest in winning elections. Within the space of 18 months, there’s now a growing consensus that cuts aren’t the way forward and that we need an industrial strategy.”

Theresa May’s support for new grammar schools and “hard Brexit” has given Labour MPs other issues to unite around. After Corbyn’s second landslide leadership victory, many of his opponents have reached the final stage of grief: acceptance. Others, as Lewis noted, are imbued with “an eager enthusiasm to make this work”. Contrary to some predictions, more than half of the 63 frontbenchers who resigned last summer have returned.

An emblematic figure is Jonathan Reynolds. The Liz Kendall supporter, who resigned as shadow transport minister in January 2016, has rejoined the front bench as shadow City minister. Earlier this year, Reynolds backed the introduction of a universal basic income, an idea that is now being explored by John McDonnell’s team (and that Barack Obama has called for “debate” on). In July, Reynolds and Lewis wrote a joint piece in support of proportional representation (PR), warning that without it “a more equal, democratic and sustainable society is less likely”.

Another advocate of PR is Lisa Nandy, the former shadow energy secretary and a friend of Lewis (on 26 October, along with Reynolds, they called for Labour to stand aside in the Richmond by-election to aid the Liberal Democrats). In the view of some, the defining divide in Labour is no longer between left and right but between open and closed. On one side are pluralists such as Lewis, Reynolds and Nandy, while on the other are tribalists such as Ian Lavery (pro-Corbyn) and John Spellar (anti-Corbyn).

The division stretches to the top, with McDonnell in favour and Corbyn opposed. “It’s a work in progress,” Lewis said of his efforts to convert the Labour leader. “There’s a growing movement of MPs who now either support PR or understand the growing necessity for it. They may not be quite there themselves, but they’re moving in that direction.”

At times since Corbyn became leader, the parliamentary party’s divisions have appeared to many to be insurmountable, even as the party in the country has grown and been inspired by Corbyn. Yet a new consensus is being forged in the PLP: anti-austerity, pro-Trident, pro-Nato and, increasingly, committed to political and constitutional reform. If there is any consolation for a becalmed Labour Party, it is that its European counterparts are faring little better. In Spain, France and Germany, an already divided left is further fragmenting.

But Labour is likely to both fight and survive the next general election as a united force. If Lewis can retain his seat in Norwich (he has a potentially vulnerable majority of 7,654), he could one day act as the bridge between the party’s “soft” and “hard” left. After a year of factional skirmishes, the common ground in which Labour’s future will be shaped is emerging.

George Eaton is political editor of the New Statesman.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage