Open Europe Blog

Following last week’s EU summit, we were struck by how the ambush by France, Italy and Spain demonstrated in practice how a closely integrated eurozone could work in the future, with Germany internally outnumbered by the ‘Club Med’ contingent. In a letter to the FT, we argue that:

“At last week’s summit, German Chancellor Angela Merkel may have got a taste of what an EU without Britain would be like. Backed into a corner and with her list of allies growing thin, she was forced to give way to the Mediterranean bloc – Italy, Spain and France – over direct recapitalisation of eurozone banks. Quite aside from the specific item up for negotiation, it illustrates the dangers for Berlin should Britain be pushed out of the EU altogether.” 

“As Europe goes through a highly unpredictable – and testing – phase, Germany needs the UK inside the EU tent to balance the more protectionist southern bloc, and to uphold a rules-based system where goods and services can be traded freely across borders. It is therefore in Germany’s interest to support new terms of EU membership for Britain, which will be needed to reconcile British public opinion with continued commitment to the EU.”

Over on the Guardian‘s Comment is Free, we develop this theme a bit further, arguing that: 

“Proportionally, Germany has far fewer friends inside the eurozone than in the EU as a whole, with the bloc’s centre of gravity skewed by the more protectionist and high-spending southern states…Therefore, Germany has a very strong interest in keeping as many decisions as possible at the level of 27 member states.”

“This means that, if push comes to shove, the Germans may prove more susceptible to UK arguments for revised membership terms than it is willing to admit publicly. A common response from EU-reform sceptics to any suggestion that the UK should seek a more flexible relationship with Europe is that other member states would never allow it, but this has never been credibly tested.” 

“It won’t be easy, but arguably, the Germans have more to fear from being left isolated within the eurozone than they do from a new bargain with Britain. If the choice is between the UK leaving or getting some EU powers back, Berlin may – after a lot of posturing, negotiation and bickering – go for the latter for fear of being left bowling alone in Europe. That is to say, that Britain has more leverage in Europe than it may think. Germany needs Britain and vice versa. No one likes being without friends.”

Mr. Cameron, the ball is in your court…

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