The state of the union

By Richard A.E. North

One way or another, Angela Merkel is determined to take the refugee crisis off the front pages. In addition to accepting upwards of 800,000 asylum seekers this year, her vice chancellor has saidGermany can accommodate at least 500,000 asylum seekers a year for several years, while finance minister Wolfgang Schäuble has agreed allocate an extra €6 billion to their care.

On top of that, the Commission is at last lumbering into action, putting together measures new and old to form a coordinated if not effective package, which includes an emergency relocation package (to which the UK must opt-in, if it is to participate).

Nothing of this addresses the fundamental flaws in the EU’s asylum policy but it may be enough to take the issue off the front pages, in the same way that the Greek crisis has been contained – not cured, but contained. And if the “colleagues” have judged their responses correctly – and they do have some experience in crisis management – then the current media interest will have peaked and will in due course begin to decline.

Thus, by the time Mr Cameron gets to name the day on which we trundle to the polls to tell him what we think of his plan for a new relationship with “Europe”, the legacy media may have moved onto other things. Migration, although still important, may no longer be a dominant issue – and most probably will not.

If this holds, what will be important are some of the issues raised yesterday in Mr Juncker’s first “state of the union” address as Commission president, and which have been almost completely ignored by the legacy media and others, as they obsess about their current hystérie du jour.

Specifically, what was of huge importance in Mr Juncker’s speech was the effective admission that the EU is working towards a new treaty, based on the principles set out in the Five Presidents Report. And, in a crucial development, the Commission is to present in spring 2017 a White Paper on the “more fundamental steps” which it believes will need to be taken in regard to the eurozone.

Already, Juncker flags up the need to set up a eurozone treasury, accountable at European level, built on the European Stability Mechanism, with a potential credit volume of €500 billion, a firepower that is as important as the one of the IMF.

The ESM, he says, “should progressively assume a broader macroeconomic stabilisation function to better deal with shocks that cannot be managed at the national level alone“. We will, he says, “prepare the ground for this to happen in the second half of this mandate” – effectively before 2019.

As regards the UK, Juncker declares that it will be offered a “fair deal“, but then goes on to say that he wants to “preserve the integrity of all four freedoms of the Single Market” and at the same time “find ways to allow the further integration of the Eurozone to strengthen the Economic and Monetary Union“.

With that, though, he says the “fair deal” will recognise “the reality that not all Member States participate in all areas of EU policy“, signalling “associate membership”, in all but name.

When we see in The Times what amount to admissions from Mr Osborne and others that Mr Cameron’s renegotiation strategy has failed – explored in more detail by The Boiling Frog blog – we are now as certain as we can be that the scenario I set out yesterday holds:

A new treaty presents a huge risk for the “colleagues”. The French, in particular, are nervous about whether a referendum will bring the project down. But for the outer fringe with their “eurosceptical electorates”, these can be squared by the offer of “associate membership.” 

The core members will be reconciled by the framing of the new treaty. It will be presented to the electorates of the Member States as improving the “democracy” of the eurozone – bringing democratic control to a system that is already largely in place.

‘This is precisely what Otmar Issing was pointing out recently, “warning” that it would be “dangerous” to transfer control over tax and spending to the EU federal level before full political union has been established first on democratic foundations.  The transfer is happening. The “democracy” will follow.

But Issing takes the view that such a quantum leap is unthinkable in the current political atmosphere, with the chances of political union “close to zero”. That notwithstanding, the attempt is to be made. The Five Presidents Report and the Bertelsmann Fundamental Lawhave set in train an unstoppable process. The “colleagues” are going to go ahead with their treaty because they must. They have run out of options.’

Yet even to this we can add a letter of intent from Juncker and his first vice president, Frans Timmermans, to European Parliament president Martin Schultz, and holder of the EU rotating presidency, Xavier Bettel, Prime Minister of Luxembourg. This affirms that the Commission will “come forward rapidly with measures to deepen our Economic and Monetary Union“.

That this paves the way for a two-tier EU, with the UK taking on an “associate membership” has even now percolated into the depths of The Times, with Tim Montgomerie writing:

That fair deal might not involve very specific concessions to Britain but might yet mean the offer of being part of a new two-tier European Union. The Five Presidents Report – ignored in Britain because it coincided with the Tunisian terror attack – set out the commission’s timetable for a new EU treaty. The federalist Spinelli Group think-tank has published a draft text for this “final” treaty which includes the concept of “associate membership” status for non-euro economies. Associate membership would be a second-class membership but if Mr Cameron could get EU leaders to bring the plan forward he could persuade the country that it will be a mechanism by which Britain could eventually get out of the EU machinery that we do not want to be part of.

It is extremely unlikely that Montgomerie thought this up all by himself, and he’d sooner poke his eyes out with knitting needles than read (having consigned us to outer darkness in his Cameron-loving days at Conservative Home). Someone, therefore, must be feeding him with material, to which Montgomerie himself adds:

The snag is that we would only see the terms of this associate membership if we vote to remain members and then negotiate it. I hope Britain wouldn’t vote for such a blank sheet of paper. Once we’ve voted to stay in the EU we will be taken for granted. Europe will conclude that we may constantly moan about membership but we’re all mouth and no trousers.

This is actually quite helpful, and once more of the SW1 crowd discover “associate membership” and take ownership of it (mostly completely unaware of its origin), Mr Cameron’s own tactical freedom will disappear. Handled properly, spreading the undesirability of associate membership is a winning tactic.

Less of a winner, Montgomerie avers, is giving Corbyn and Farage free rein in the “leave” campaign, suggesting that any campaign that wants to own the future hides them in the broom cupboard. Watching his response to Juncker’s speech, one can quite see the point about Farage. Here is a man obsessed with immigration to the exclusion of all else, unable to see the wood for the trees and blind to the bigger picture.

But that failure spreads to most of the legacy media which today, in its reports of the state of the union speech, expend all most all their energies on the refugee crisis – yet again confirming their almost total inability to report intelligently on EU affairs. Between Farage and his supporters, and the media, the public are being comprehensively ill-informed.

For the present, though, we have just had powerful affirmation of the enemy’s intentions. And we need to use this gift to best effect. Locking Farage (and Corbyn) in a broom cupboard is only a start.

Richard A.E. North is a British blogger and author. He is the co-author, along with Christopher Booker, of The Great Deception, a comprehensive history of the European Union and Britain’s relationship with it. His Brexit campaign blog EUReferendum was rated by the Financial Times as the UK’s most influential political blog in 2006. North was previously research director in the European Parliament for the now-defunct political grouping Europe of Democracies and Diversities.