Today the eleventh President of the European Commission, José
Manuel Barroso, will deliver his fourth and final State of the Union address to
Brussels before he steps down after the European elections next year.
We know already that he will say that the EU needs further
economic and political integration. It is likely that he will start to expand on
his vision of banking and fiscal union, welding the countries of the Eurozone
ever closer together into a new highly-integrated economic
This should come as no surprise to anyone. The President of
the European Council, Herman van Rompuy, set out proposals for deepening
integration in his ‘Towards a genuine Economic and Monetary Union’ paper in
2012, and President Barroso floated the idea in his State of the Union address
In fact, anyone who witnessed the debate about the single
currency at the turn of this century would have seen commentators warning that
the euro would not survive without a strong coordination of fiscal policy underpinned
by a single pan-European banking system.
Then, as often happens now, these sage people were shouted
down – decried as xenophobes clinging to outdated notions of sovereignty. As has
happened throughout the chequered history of the European Union, nations were
told not to worry about the next steps, with EU officials saying that joining the
euro didn’t necessarily mean further political and economic union.
It has taken one financial crisis for that promise to be
broken. Now the EU institutions are laying the groundwork for further control
over the tax and spend policies of Eurozone countries – arguably stripping
governments of their most fundamental function.
Fortunately, Britain is inching towards economic growth
safely outside the single currency. There is a debate to be had over whether
the Eurozone should be making moves towards closer union or breaking up
altogether, but these developments do bring with them the high likelihood of
treaty change and with it the opportunity to reshape our relationship with
We should not be afraid to start imagining what this new
deal will look like. When David Cameron first mooted the prospect of
negotiating a new deal with the EU, some business people and retired Eurocrats warned
the Prime Minister against making "premature" and
"opportunistic" demands. Others said that treaty change was
impossible and that in going alone Britain was "threatening" the
But it’s clear that we are no longer going alone. The EU is
beginning its own period of change and we can use this opening to get a better deal
from Brussels. The very same fair-weather friends who warned David Cameron of
dire consequences in January have now conceded that the EU does need to reform,
and even the German Chancellor has spoken
positively about the repatriation of powers from Brussels to national governments,
with talks ready to begin after the elections.
On Monday night, Business
Secretary Vince Cable said that the planned return of powers had “little
hope”, seemingly ignoring these developments. It now seems likely that the
whole process of negotiating a better deal for Britain will begin far sooner
than many had originally thought and – thankfully – it won’t have to take place
on a unilateral basis.
Business for Britain
will be holding a debate on this topic at Conservative Party Conference on
Tuesday 1st October, 12-1pm in the ConHome tent. Panellists to
include Matthew Elliott, Dr Liam Fox MP and Ruth Lea, with the event chaired by
ConHome Editor Paul Goodman.