Merkel Joins Britain’s Call for Two-Speed Europe

British prime minister David Cameron walks with German chancellor Angela Merkel outside his Chequers country residence in Buckinghamshire, England, October 9
British prime minister David Cameron walks with German chancellor Angela Merkel outside his Chequers country residence in Buckinghamshire, England, October 9 (The Prime Minister’s Office/Georgina Coupe)

German chancellor Angela Merkel on Tuesday joined British leaders in calling for a more flexible European Union where countries can opt out of integration schemes.

“The Europe of today is no longer a Europe of one speed,” she told a business conference in Berlin. Read more “Merkel Joins Britain’s Call for Two-Speed Europe”

Sweden Cautions Against Two-Speed Europe

Stockholm Sweden
The sun rises over Stockholm, Sweden (iStock/Marcus Lindstrom)

Deeper eurozone integration risks relegating non-euro countries like Sweden to the status of “second-class members of the European Union,” its finance minister, Magdalena Andersson, warned last week.

Writing in Stockholm’s Dagens Nyheter, Andersson warned against reduced influence for countries outside the eurozone if those countries that share the currency tighten their budget rules and pool economic governance.

“Ultimately, this may also affect the design of the EU single market which is so important for Sweden,” according to Andersson. Read more “Sweden Cautions Against Two-Speed Europe”

Hammond Confirms Two-Speed Europe British Objective

British foreign secretary Philip Hammond in Helsinki, Finland, January 8
British foreign secretary Philip Hammond in Helsinki, Finland, January 8 (Finnish Government/Laura Kotila)

Britain’s foreign secretary, Philip Hammond, confirmed on Wednesday that a two-speed Europe is one of the island nation’s objectives as it seeks to renegotiate its membership of the European Union.

Hammond — who has said he would leave the European Union unless Britain gets a “better deal” — writes in The Irish Times that his government seeks reforms that would allow countries “that want to integrate further to do so while respecting the interests of those that do not.”

This applies most clearly to the eurozone where the United Kingdom does not seek to prevent further euro integration — indeed supports it — but does need guarantees that the interests of those not in the euro will be protected.

Other non-euro states, such as Poland and Sweden, are wary of a two-speed Europe that could see them relegated to second-class member states.

However, Germany, the bloc’s most powerful member, seems willing to accept this British proposal. Chancellor Angela Merkel’s finance minister, Wolfgang Schäuble, told The Wall Street Journal last month he wanted to “combine the British position with the urgent need for a strengthened governance of the eurozone.”

The Atlantic Sentinel pointed out at the time that Germany’s interest in linking Britain’s call for less closer union with its own desire to strengthen governance in the eurozone could take the continent closer to a two-tier union: an integrated core of euro states surrounded by loosely affiliated countries like Denmark, Sweden and the United Kingdom.

According to Hammond, this concept would build on the existing architecture of the Schengen free-travel area and the European banking union, neither of which involves the British.

Prime Minister David Cameron has promised to call a referendum on Britain’s European Union membership once he has secured changes in the nation’s relationship with the continent.

Cameron, who was reelected last month, hasn’t made very clear where he would like to see changes. But analysts believe he wants to protect London’s financial industry from European regulations and stop immigrants from other European states claiming benefits in Britain on their arrival.

Some in the prime minister’s Conservative Party and members of the opposition United Kingdom Independence Party want to curtail the free movement of people as well — a right protected by European treaty.

Even if this is unlikely to happen, and more opt-outs for Britain would go hand-in-hand with a deepening of the European single market, especially in services, the country’s relations with the rest of Europe would become looser. It is unclear if other member states currently outside the euro area are interested in following that example.

The currency union’s nineteen members account for two-thirds of the European Union’s population and half its economic output.

Under existing treaty, all member states, with the exception of Britain and Denmark, are obligated to eventually adopt the euro.

Liberalizing European Services Would Boost Growth: Study

View of the Piazza del Duomo in Milan, Italy, November 24, 2009
View of the Piazza del Duomo in Milan, Italy, November 24, 2009 (Bjørn Giesenbauer)

Further liberalization of services in the European Union could raise economic growth for the bloc 2.3 percent, or nearly €300 billion per year, a British study suggests.

The European Union’s services directive, enacted while the Dutchman Frits Bolkestein was in charge of the internal market, has already added €100 billion in growth since its implementation.

But there remains much to be done, argues the Open Europe think tank in a new report (PDF). Read more “Liberalizing European Services Would Boost Growth: Study”