Summary: If ratified, the new EU constitution will change the way the union works. It cannot take effect unless approved by all 25 members, but in only one country -- the United Kingdom -- do polls show that a majority oppose the document. Still, a rejection there would throw Europe into a constitutional crisis. And it could ultimately harm transatlantic relations as well.
Charles Grant is Director of the Centre for European Reform in London and the author of What Happens If Britain Votes No? Ten Ways Out of a European Constitutional Crisis.
EU CONSTITUTION AT STAKE
In June 2004, the member states of the European Union concluded the negotiation of a treaty that, if ratified, would establish a European constitution that would make substantive changes to the way the union works. For the first time, an individual would be appointed president of the European Council, overseeing the regular summits of the heads of government of the EU nations and their foreign ministers. The EU would itself have a foreign minister. The amended rules on majority voting would allow a measure to pass if 55 percent of the member states were in favor, so long as they represented 65 percent of the EU's population. And the EU would gain new powers in justice and home affairs, requiring cooperation among interior ministries on immigration, asylum, crime, and justice.
The governments of all 25 countries have signed the treaty, but it cannot take effect unless ratified by each member state, through parliamentary vote or referendum. Ten EU countries have chosen to hold referendums. In February, the Spanish voted 77 percent in favor. A similar margin of victory is expected in Portugal and Luxembourg. Approval is less certain in the forthcoming French, Dutch, Polish, Danish, Irish, and Czech referendums, although opinion polls point to a positive result in all those countries. Only in the United Kingdom do the polls suggest that a majority will vote no. But that vote alone would throw the EU into a constitutional crisis.
Any initiative to salvage the constitutional treaty at that point would face huge political and legal obstacles. Some member states would probably try to push ahead and exclude the United Kingdom from the EU. Alternatively, France and Germany might seek to establish a "hard core" of states committed to a closer union, a new organization that would coexist within the broader EU. More plausibly, however, sets of ambitious countries might set up several different vanguard groups to facilitate closer cooperation in particular policy areas. Thus, Europe would have not a hard core but a "messy core": it would not be tightly organized, and the various groups would not all consist of the same members. In the long run, the countries that took part in all these groups would emerge as the EU's leadership.
Such a development would not bode well for either the EU's future or transatlantic relations. If a messy core emerged within the EU, the United Kingdom and other U.S. allies, such as Poland, would likely wind up outside of it. Europe would spend several years trying to sort out its institutions, rather than cope with the many security, economic, and environmental challenges that it faces. The EU would stop enlarging. And its chances of pressing ahead with economic reform or developing a coherent foreign policy would diminish dramatically.
LIVING ON THE EDGE
People from other countries are often puzzled by the fervor of the United Kingdom's hostility to the EU, or its "Euroskepticism." Ever since the British joined what is now called the European Union, in 1973, their relationship with that club has been troubled. For almost the entire period, one of the country's two main political parties has supported either loosening ties to the union or breaking them altogether. Although the Conservative Party took the United Kingdom into the union, its internal arguments over European policy destroyed the government of Margaret Thatcher, weakened that of John Major, and contributed to the party's general election defeats in 1997 and 2001. The Conservative Party now wants to "renegotiate" the terms of the United Kingdom's membership, while some of its leaders advocate outright withdrawal. Meanwhile, the current, pro-European position of the Labour Party, which abandoned its policy of quitting the EU in the mid-1980s, is unpopular. Labour will probably win the general election expected in May 2005 but lose the constitutional referendum planned for mid-2006. Such a defeat would destroy its credibility as a governing party.
Opinion polls show that, if given the choice, around four out of ten Britons would vote to leave the EU and that an overwhelming majority oppose the constitutional treaty. Such attitudes are deeply rooted in U.K. history, geography, and economics. Being an island on the edge of Europe, the United Kingdom has for the past 400 years developed close ties to other continents. Winston Churchill once said to Charles de Gaulle, "When I have to choose between you and Roosevelt, you should know that I will always choose Roosevelt. And when I have to choose between Europe and the wide open seas, you should know that I will always choose the wide open seas." World War II still shapes the way many Britons view their country and its relationship with the continent. The British had a more glorious war than most other Europeans, and their newspapers and television programs seldom let them forget it.
Recent economic success has also reinforced a sense of self-sufficiency among the British. For the past dozen years, the U.K. economy has outperformed those of France, Germany, and Italy. The United Kingdom's economic growth rate has been about one percentage point higher than those of France, Germany, and Italy, while its unemployment rate is half theirs. Unlike those three countries, the United Kingdom opted out of the euro, the European currency launched in 1999, and apparently has prospered by keeping the pound.
Leaving aside long-term trends, there are immediate reasons why Britons opposed to the constitutional treaty are confident of a referendum victory. The press is on their side. Three out of every four newspapers sold in the United Kingdom are extremely hostile to the EU and its constitution. Much of their reporting of the constitution's drawbacks is exaggerated, and some of it is false. Popular newspapers claim, for example, that the constitution would force the United Kingdom to give up its seat on the United Nations Security Council; that Brussels bureaucrats would command British troops, control British oil reserves, and regulate British borders; and that the EU would gain new powers to interfere in the U.K. labor market. None of these points is true, but the popular press knows how to frighten people. Of course, some of the horror stories are real: the EU's administration has been tarnished by corruption scandals, and the Common Agricultural Policy, although reformed, continues to swallow more than 40 percent of the EU budget. But instead of reporting these flaws in a measured and evenhanded tone, popular papers tend to portray the EU as a conspiracy led by France and Germany to promote their interests against those of the United Kingdom.
Furthermore, advertisements in the media routinely attack the EU constitution, while none support it. The various anti-EU lobbying groups are well organized and well funded. Their combined budgets are probably between five and ten times greater than the $1.25 million spent in 2004 by the United Kingdom's single pro-EU lobbying group, called Britain in Europe. Traditionally, British business leaders have been pro-European, and particularly pro-euro. But they have been angered by the Labour government's failure to deliver on its promise to hold a referendum on the currency, and they refuse to fund the pro-constitution campaign unless the government leads the way. So far, however, Downing Street has kept quiet: its priority is to win the general election expected in May. Only then will the government try to convince people to support the constitution.
Does the new treaty have any chance of passing? Possibly. Pro-Europeans have not given up hope of winning the referendum. They expect that when the government does finally start trying to win support for the constitution, money will flow into their organizations. They believe they will be able to reveal many of the Euroskeptics' claims to be false and that many voters will ultimately look less to the popular press for information on the treaty than to the BBC, which will be more objective. And if the rest of the EU has endorsed the treaty by the time the United Kingdom votes, the British people may start to fear isolation. If Britons believe that a vote for the constitution is a vote for the status quo -- and that a vote against would create chaos and uncertainty -- they could conceivably endorse the treaty. But the odds remain slim. Most political commentators continue to predict that British voters will reject the new constitution.
THE DAY AFTER TOMORROW
If the British do decide to vote no, but the other member states adopt the treaty, the future of the EU could take one of six courses. The first possibility is that nothing would happen. The other countries would accept the death of the constitutional treaty and would simply continue operating with the existing treaties. This outcome, however, is not plausible: most EU governments do not like the existing treaties and believe that the newly enlarged union -- ten countries joined in May 2004 -- will not run smoothly without the constitution.
Second, the member states could choose to renegotiate the constitutional treaty. A new intergovernmental conference could cut out the most controversial parts, making it more palatable to British tastes. But this option is no more realistic than the first. Many governments fear that revisiting the hard-fought compromises enshrined in the treaty could result in a less attractive deal. Having already made big concessions to the United Kingdom to ensure that Prime Minister Tony Blair would sign, they are not prepared to give away any more. Nor would they want to go through the ratification process all over again.
Under a third scenario, the British would hold a second referendum on the constitutional treaty, as the Danes did after first rejecting the Maastricht Treaty in 1992 and as the Irish did after voting against the Nice Treaty in 2001. In this case, however, such a stratagem would not make sense. Because the Maastricht Treaty extended the EU's role in defense, immigration, and monetary policy, the Danes could be offered ways out of those three areas before a second vote. Similarly, the EU was able to guarantee Ireland's neutral status, to appease those Irish who worried that the Nice Treaty's provisions on defense would compromise their neutrality. The trouble with the constitutional treaty is that it mainly covers matters impossible for a single member to bypass: EU institutions and voting rules. In the one area in which it does extend significant EU powers -- justice and home affairs -- the United Kingdom is already free not to adopt union measures.
Three more-likely scenarios remain. One would be for the other 24 member states to enact the treaty, forcing the British to leave the EU. Some prominent continental politicians, such as former French President Valéry Giscard d'Estaing and former French Finance Minister Nicolas Sarkozy, say that the British should not be allowed to block the treaty. Legally, the 24 cannot adopt the treaty without British ratification, but there may be a way around that obstacle. The 24 could withdraw from the existing EU treaties, redraft the constitutional treaty among themselves, and then sign and ratify it. (The 1969 Vienna Convention on international treaties allows signatories to withdraw in certain circumstances, although there is some legal doubt as to how this process would work.) The United Kingdom would then have to negotiate an associate status similar to that of Norway and Switzerland, which enjoy access to the EU market but cannot vote on its rules.
The British may assume that they are too special to be cast adrift. They should not. For the EU's more integrationist countries, the United Kingdom has been a constant bother, often thwarting schemes for a more united Europe. If the Conservative Party and the popular press used their referendum victory as a springboard to campaign for quitting the EU; if British politicians of all parties sought popularity through cheap attacks on Paris, Berlin, and Brussels; and if the government lacked the mettle to oppose them, the United Kingdom would find itself friendless.
Yet any effort to exclude the British would only succeed if all 24 states backed it, and the United Kingdom's xenophobic ranting would have to be quite extreme to drive them all away. And if, in the wake of a negative referendum, London made an effort to consult with Europe on how to deal with the crisis, it would keep its friends. Many EU members want to build a stronger common foreign and security policy and to improve the union's record on economic reform, and they know that both tasks would be harder without London. Countries that share the United Kingdom's Atlanticism and market-oriented approach to economics would also think twice before ostracizing the British. Countries such as Portugal, the Netherlands, Poland, and the Nordic and Baltic states would not relish the prospects of an EU dominated by France and Germany. It is thus relatively unlikely that the United Kingdom would be pushed out of the union.
Under the fifth scenario, France, Germany, and their allies would accept that the constitutional treaty cannot be implemented without British ratification. Instead, they would set up a new organization, with its own institutions, for the EU states that want a real political union. This "hard core" of countries would harmonize their policies in areas such as taxes, legal procedures, and research and development. And they would try to establish a European criminal court and merge their armed forces and diplomatic services. This group would have its own budget, secretariat, council of ministers, and parliamentary assembly. It would coexist with the broader EU.
But it would be immensely difficult, legally and politically, not only to establish such a core but also to ensure that it operated smoothly alongside the EU. If the United Kingdom does vote no on the constitution, there would be strong support in France for a core Europe. Prominent French politicians, such as President Jacques Chirac and leading socialists Laurent Fabius and Dominique Strauss-Kahn, have already voiced their support. But the scheme would not be viable without equally strong German support. Although Chancellor Gerhard Schröder is thought to be sympathetic to the idea of a European hard core, many Germans remain less than enthusiastic. Foreign Minister Joschka Fischer announced a similar plan in 2000 and subsequently withdrew it, arguing that only a broad EU of continental scale could cope with current strategic challenges. The Christian Democratic opposition is divided. The German finance and defense ministries are opposed. So is most of the German business community, which fears that forging a closer relationship with France at the expense of the United Kingdom, the United States, and others could hurt the German economy.
Moreover, the core would be hugely divisive, upsetting those countries left on the outside. EU institutions would probably be hostile to the core group, seeing it as a rival center of authority. In some circumstances, the activities of the core could even breach European law. If core members favored one another in business matters, for example, other EU states could seek redress from the European Court of Justice.
The fact that Paris and Berlin would lead the core would in itself create problems. The pair revived their close alliance in 2002, after five years of frequently being at odds. Since then, they have often sparked resentment from other EU members, for example by breaking the rules on budget deficits in the Stability and Growth Pact and agreeing to preserve existing levels of spending in the Common Agricultural Policy. Some EU governments believe that France and Germany's cooperation serves to promote their own narrow interests rather than the wider European good.
In the end, a sixth scenario is the one most likely to unfold if the constitution fails the British referendum: the emergence of a "messy core." If attempts to exclude the United Kingdom or to establish a hard core come to nothing, the integrationist countries will seek to promote a more united Europe in a number of ways, including by trying to implement parts of the constitutional treaty. Although most parts, such as the new voting rules, cannot be implemented without ratification, some, such as the provision for the establishment of a European diplomatic service, can be applied without breaching the current treaties. The integrationist countries could also try to salvage other novel elements of the constitution by holding a mini-intergovernmental conference and trying to amend the existing treaties, adopting, for example, the new rules on majority voting. Such a scheme would, however, require every member state to sign and ratify the treaty amendments. The British government, in the wake of a referendum defeat, might find that difficult.
What the United Kingdom could not do is stop the integrationist countries from using current EU rules to establish vanguard groups in particular policy areas, for example, in corporate taxation or research and development. Nor could London prevent the creation of other vanguard groups outside the EU framework, in areas such as border guards, police cooperation, and criminal justice. There is a precedent: the "Schengen area" of passport-free travel was established by France, Germany, and the three Benelux countries in the 1980s as an entity separate from the EU, although in 1997 the union took it over. The integrationists would also likely build the euro group, currently an informal forum for the countries in the single currency, into a solid institution.
The consequence of all this would be further European integration, some of it involving the whole EU, but much of it within distinct but overlapping smaller groups. Eventually, the countries that belonged to all the groups would start to caucus, attempt to guide and direct the whole union, and probably establish their own secretariat. Europe would thus develop a messy core. Messy or not, however, the long-term effects would be similar to those of a hard core: the EU would be divided into two groups of countries, with France and Germany dominating the center group and the United Kingdom relegated to the outer circle.
THE BUTTERFLY EFFECT
Ever since it joined the union, the United Kingdom has been an influential member, well placed to represent U.S. interests, when it so chooses. But stuck in an outer circle of the EU, the British would be less able to nudge union policies in an Atlanticist direction. (The same applies to other close U.S. allies, such as Poland and the Baltic countries, which are unlikely to join the core.) The United Kingdom would lose influence not only over the policy areas covered by the core, but also over those that remained under the EU's general ambit. Indeed, bound together by common interests, the core countries would likely support each other even in fields that involved all the EU members. Such mutual back-scratching has been evident in the past between France and Germany: at the Berlin EU summit in March 1999, because of Germany's broader interest in maintaining its alliance with France, Schröder let Chirac unravel a radical reform of the Common Agricultural Policy that Germany (and the United Kingdom) supported.
British rejection of the constitution would also halt further EU enlargement. The United States has always, with good reason, favored expanding the EU, understanding that the process helps spread security, democracy, and prosperity. But the union can only negotiate the entry of new members when it has clearly defined rules and stable institutions. French politicians have stated explicitly that the EU cannot admit new nations unless the constitutional treaty is implemented. They have a point: the basic purpose of the treaty is to reform EU institutions so that they can accommodate more members. Bulgaria and Romania, due to join in 2007, are so close to membership that they will probably get in no matter what happens with the constitution. But the treaty's rejection would scuttle talks with Turkey and Croatia, which are due to start this year, and force Ukraine and countries in the western Balkans to postpone their membership ambitions. It is true that in the long run, if the constitution were abandoned and a core established, the EU member states would probably not object to further enlargement -- but only so long as the aspirants did not join the core.
Economically, a European core dominated by Paris and Berlin would likely lean toward defensive or possibly protectionist economic policies that would not be in Washington's best interests. Most of the union's more dynamic economies -- those of the United Kingdom, Poland, and the Nordic and Baltic countries -- would be outside the central group. There are, of course, successful companies and industries in France and Germany, but both countries have been plagued by slow growth and high unemployment, and they have lagged behind in the EU's "Lisbon process" of economic reform (the member states have committed to reaching a series of economic targets and are supposed to achieve them through peer-group pressure, among other means). Although the core would probably not inflict great damage on the broader European market, the overall credibility of the Lisbon process would suffer if the leadership group consisted mainly of foot-draggers. The core countries' efforts to maintain high levels of worker protection and company taxation could harm their competitiveness with eastern Europe's low-tax, lightly regulated economies. Europe's leaders would be unlikely to push the continent to abandon the policies that have led to low growth and high unemployment.
A core led by France and Germany would also have its own approach to foreign policy, which would be relatively anti-American (although that could change after the German general election in the fall of 2006 and the French presidential election the following summer). The countries that were most hostile to the Iraq war -- France, Germany, Belgium, Luxembourg, and, following the electoral victory of President José Luis Rodriguez Zapatero, Spain -- would be in the forefront of any core. Led by Chirac and Schröder, the core countries would promote a multipolar world, with Europe as one emerging pole. At the same time, the EU's periphery, including the United Kingdom and Poland, would tend toward Atlanticism. With that kind of split foreign policy, Europe could not develop into a more effective strategic actor. To be sure, some in the Bush administration would be quite happy to see Europe remain divided, so that they could play the various member states off of one another. But others -- including Secretary of State Condoleezza Rice, to judge from her comments in Europe in February -- stress that Washington needs Europe to help it tackle global security threats. They understand that a divided Europe cannot be a useful strategic partner.
The British have long played a pivotal role in helping the Americans and continental Europeans understand each other. If the United Kingdom becomes alienated from the continent and its leadership core, transatlantic relations will suffer. Washington is more likely to listen to, and respect, a Europe that is strong and whole. The Bush administration should pay serious attention to the ratification of the EU's constitutional treaty. When appropriate, the White House should even urge the peoples of Europe to adopt it. The treaty's implementation would not radically change the way the EU works. But if the treaty were rejected by a large member state such as the United Kingdom, the ensuing crisis would turn the union inwards, toward endless institutional negotiations, and away from the global challenges that the United States and Europe need to face together. Such a weak and divided Europe would strengthen the hand of unilateralists in the United States and of Europeans eager to work against Washington's interests.