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Enter Viviane Reding, the EU Commissioner for Justice, Fundamental Rights and Citizenship. She wants to start preparing for a new treaty that would create the sort of political union that Merkel envisages, and for which she will seek a mandate in the German federal election in autumn next year. The treaty would be drafted by 2016, ratified by 2019 and enter into force in 2020 if ratified by two thirds of members. Those who fail to ratify — Britain almost certainly included — would fall outside but remain members of the single market. And this would be our opportunity to renegotiate our terms of membership. This is, in effect, the two-speed ‘variable geometry’ version of Europe that some of us started designing for the UK in 1978.
It might seem odd that the integrationists should be so keen to embark on a massive new design just as the flaws of their last one, the eurozone, have become obvious. But they are irrepressible and they have history behind them. They know that federal structures are not created through orderly, logical steps — rather, they are imposed at moments of crisis. And the Franco-German elite who drove the euro project have at last accepted the most serious critique of their previous plan: that to have a single currency it is necessary to have a single country. It only remains to be seen how many other countries will agree that membership of the eurozone means changing the nature of their sovereignty, as New Mexico, Maine, Pennsylvania and California did when they adopted the US dollar. If Germany is prepared to keep bankrolling a core eurozone, I suspect most existing EU member states will join the new Merkel design.
How should Britain react? This may well be the single most important foreign policy question of the decade, and ought to be addressed now. This is our EU, by treaty, and it can only be changed by unanimity. We must stay at the negotiating table until there is unanimity: no walk-outs, just quiet persistence. We must have the confidence to set out our own new design for two Europes, a wider and an inner, that will live alongside each other.
From the beginning, Turkey, Norway, Switzerland and Iceland should be asked to join talks on designing the economic and political contours of a wider Europe of which they and the EU member states would all be a part. This looser alliance would have at its core the EU single-market legislation, but there would be no assumption of the free movement of labour. There would be a readiness to continue with EU environmental legislation and policy, also a revised European Convention on Human Rights. Almost all members of this wider Europe would be part of Nato.
And the inner Europe? Its constitutional arrangements need not concern Britain overmuch, since it is barely conceivable that the British people would consider joining. But it would resemble ever more closely a single state, united not just by a currency but its own tax and spending policies, its common agricultural and fishing policies, its legal system, even its defence policy. In all logic, the inner Europe ought to be called the United States of Europe, or USE. but probably it will wish to be called the EU so as to argue that it is a continuous development. In that case, the wider Europe should be called the European Community.
Of course there would have to be a UK referendum on whether Britain should be part of the inner Europe. It would make sense to take that referendum in principle early. Formal ratification of an already agreed position could follow if the Conservative and Labour parties decided that on this issue of vital national interest there would be a joint approach. Preferably the Liberal Democrats would also agree. But it is more likely that the Lib Dems will want to argue, in a referendum, that Britain should be part of the inner Europe — and be prepared to be part of the eurozone.
Next year, when Merkel seeks German endorsement for her future Europe, the Conservatives are likely to be virtually united in opting for a wider Europe. Labour would be wise to begin in-depth discussions within the party to align its position more closely with public opinion on this emerging Europe. There is no better guiding speech for Labour than that by Hugh Gaitskell, its then leader, at its party conference in 1962. A federal Europe, he said, ‘may well be the answer to their problem. It is not necessarily the answer to ours.’ It was, we must now admit, a prescient speech from a leader who understood the limits of the European project and yet was a true internationalist. The British choice that Gaitskell foresaw over the then European Common Market has become a reality. Mainly because of the eurozone crisis. Any UK political party that ignores this rapidly emerging challenge in Europe is putting its head in the sand.
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