Colm McCarthy: UK election implications on its membership of the EU

The Conservative victory in last week’s UK election means there will definitely be an in-or-out referendum on membership of the European Union, most probably in 2017, but it could come sooner. Some in the Irish political and media establishment have been lighting candles in hopes of a Conservative defeat these last few months, but the power of prayer has proved insufficient.

David Cameron will now seek concessions from Europe and could end up recommending to voters that Britain stay in. Labour and the Scottish nationalists will also campaign to stay in and the result would be assured.

But if the concessions are inadequate and the Conservatives make no recommendation, there is every chance that the British public will opt to end the UK’s membership. The Conservatives and the Eurosceptic UKIP between them won almost half of the votes around the UK and there are Eurosceptics in the Labour party too.

Opinion polls show widespread voter antipathy to the EU and a Cameron recommendation to stay in Europe will therefore be pivotal. In truth, Britain has become detached from the European mainstream since the introduction of the single currency in 1999. Britain stayed out, now seen as a wise decision by the then Labour government.

Two other countries which met the membership criteria – Denmark and Sweden – also declined to join and many in those countries also feel that they dodged a bullet.

In Ireland, the candle-lighting brigade is now focused on the happy assumption that meaningful concessions will indeed be made to the UK and the referendum can be won comfortably by the pro-EU side.

However, the first shots are being fired from across the English Channel and there should be no presumption that the negotiations will be easy. European Commission president Jean-Claude Juncker promptly issued a statement congratulating Cameron on his victory but went on to emphasise the three great freedoms of movement (goods, labour and capital) on which the EU is founded. These, according to Juncker, are not to be re-negotiated.

Since unfettered immigration is a big concern of the UK government, it will be hard to deal on Juncker’s terms. Citizens of Cyprus, whose bank accounts were frozen as part of their eurozone rescue, will be intrigued to learn from Juncker that Europe guarantees freedom of movement for capital.

The German chancellor is reported to be deeply concerned that Britain may be on the way out of Europe and will want to make concessions. She might also advise Mr Juncker and Mr Pitella to get off the airwaves for a while.

The critical issues are the nature of Britain’s shopping list and the extent to which concessions would require treaty change. David Cameron is expected to reveal at least some of his key demands before the 25 June EU summit.

However, there are influential voices, notably in Germany, arguing that treaty change may well be desirable anyway.

It should now be clear to all that the euro project has been a disaster, creating not just economic and financial dislocation but also a two-tier Europe at political level, which was never the intention. Turning the dysfunctional common currency area into a proper monetary union without treaty change is impossible.

Since Britain and several other non-members are unlikely to join anytime soon, or ever, the two-tier Europe is here to stay and it may be as well to accept that reality in a new treaty.

The Taoiseach appears to be fully alert to the significance of the Brexit (British exit) issue and has already arranged to meet Cameron prior to the June summit. He has also established a top-level group of officials focused on the issue and the Oireachtas European affairs committee has been working on a report.

Since the euro project remains problematic, it would be a mistake if Irish policy was to be based on any presumption that the common currency will survive forever.

Greece could be out of the eurozone in weeks or months and the fragilities in the system have been disguised rather than resolved. Britain out of Europe and the demise of the euro would be the perfect storm.