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Cameron's indulgence of Tory fantasies is weakening his hand in Europe

The PM's Ukip-style positioning on immigration is viewed as weakness or blackmail by the rest of the EU.

David Cameron speaks during a press conference at an EU Council meeting on October 25, 2013. Photograph: Getty Images.

The best part of a year has passed since David Cameron’s speech promising to renegotiate the terms of Britain’s European Union membership and to put the ensuing deal to the country in a referendum. Since then, there hasn’t been much clarity about the kind of reforms that would persuade the Prime Minister to campaign for the "in" side.

We have learned something about what he doesn’t like. Or rather, we know that he has located the feature of current EU membership that seems most to inflame public hostility – free movement of workers between member states – and wants to be seen to be doing something about it.

On 1 January 2014, transitional controls that have limited the rights of Romanians and Bulgarians to live and work in the UK will be lifted. Nigel Farage is terribly excited by this prospect since it effectively launches Ukip’s campaign for May’s European parliamentary elections without him having to lift a finger. The Tories are putting in all the groundwork, ramping up the issue, reinforcing the impression that a horde of welfare-snaffling foreigners is massing on the border. Voters who are most animated by fear of a migrant tsunami will not believe the Conservatives can hold back the tide.

And they can’t. Cameron understands that free movement is an integral part of the single market. He has given private assurances to the European Commission that Britain will do nothing unilaterally that would breach existing rules. What he hopes to do is persuade other member states that those rules can, in time, be amended. In all likelihood that would mean adjustments to the accession arrangements for any future candidates for EU membership. Retrospectively clawing back rights from existing members or rewriting the very basis on which workers move around the bloc would require treaty revision on a scale that no other country wants to consider.

In other words, when Cameron says he is getting tough over the arrival of Bulgarians and Romanians in two weeks time, what he actually means is that he intends to start a conversation about a possible negotiation about what might theoretically happen with some Croatians at an unspecified point in the future.

Making announcements that sound like Ukip propaganda but without the policy of EU exit to support them is ultimately just an incitement to vote Ukip. Meanwhile, briefings from the Home Office that something drastic will be done serve only to nurture in Tory eurosceptic hardliners the hope that, if they push hard enough, Conservative policy will merge with Farage’s. (The government’s Immigration Bill has already been blown off course by a Tory backbench amendment calling for Britain to renege on its treaty obligations to Romania and Bulgaria.)

This situation is a source of bafflement and rising alarm in other European capitals. Most EU leaders and Brussels officials are prepared to engage with Cameron’s renegotiation ambitions to some extent because, by and large, they want Britain to stay in and they recognise that institutional reform is needed. It helps that the Prime Minister now talks more about pan-European changes than about unilateral "repatriation" of powers. When Cameron goes to Brussels, the carving out of custom-made exceptions for the UK – enjoying all the trading perks of open borders without any of the accompanying social and employment protections – is not seriously on the agenda. Yet that is the only kind of deal that many Tory sceptics would consider acceptable.

When Cameron allows his party to dwell on fantasies of a bespoke British EU package, the rest of Europe starts to lose patience. It is seen as either weakness – a failure to confront the Tory party with a realistic account of what is available in "renegotiation" – or it is viewed as a cynical game, ramping up euroscepticism, making the threat of exit seem ever more likely in the (mistaken) belief that this strengthens Britain’s hand. "We don’t like to use the word blackmail, but sometimes it is the word that comes naturally to your lips," one Commission official tells me.

Perhaps the most surprising element in all this is the Tory party’s willingness to indulge the pretence that Cameron has even embarked on a process of giving them what they want. There is really no evidence that he has. There will be a referendum in 2017, if the Tories form a government after the next election – and that is far from certain. Meanwhile, it remains the Prime Minister’s stated policy to support continued EU membership in that vote. When does he suppose he will fit in the negotiations to secure a deal that doesn’t tear his party in half? He shows no intention of starting soon. Is such a deal even possible? The rest of Europe – led by Germany – is eager to find some accommodation, but they can’t help if they don’t really know what it is that Cameron wants. (And there are divergent views between the parties in Germany’s ruling coalition and within them of how far Berlin should go to accommodate Britain.)

Cameron’s European strategy as it currently stands is to ramp up domestic expectations of a deal that fundamentally changes the basic principles on which the EU operates, while doing none of the diplomacy abroad to make such an outcome even remotely plausible. It is the approach a Prime Minister would take if he didn’t really care one way or the other if Britain stayed in the EU or drifted towards the exit. It is the course that might be expected from a Prime Minister who would rather not engage with the arguments if doing so conflicts with the task of appeasing habitually disloyal backbenchers and fomenting Ukip-friendly, anti-EU hysteria in the process. As a plan for leading the Conservative party that is short-sighted enough. As a way to lead the country it is desperately irresponsible.