Brexit: looking at the end game

26/08/2016

For Monograph 9, therefore, which I have just published, I've taken a closer look at the shape of the relationship between the UK and the EU, after the dust has settled. Entitled "A European Economic Space", the Monograph charts the early days of the EEA, when it had that title, with the negotiations kick-started in April 1984 with a Ministerial meeting between Efta countries and the EC and its Member States in Luxembourg (pictured).

After a slow start, European Commission President Jacques Delors transformed the situation on 17 January 1989, with a visionary speech to the European Parliament in Strasbourg. First, he referred to "our close Efta friends", for whom he suggested "a new, more structured partnership with common decision-making and administrative institutions to make our activities more effective and to highlight the political dimension of our cooperation in the economic, social, financial and cultural spheres".

Then, "not forgetting the others who are knocking at our door", he referred to Mikhail Gorbachev's notion of a "common European house", which had been articulated as early as 1987. 24 As an alternative, Delors offered a "European village", in which he saw a house called the "European Community". "We are its sole architects; we are the keepers of its keys", he said, "but we are prepared to open its doors to talk with our neighbours".

This was exactly what the Efta states wanted to hear. On 14-15 March 1989, they responded with the "Oslo Declaration", declaring their readiness "to explore together with the EC ways and means to achieve a more structured partnership". Predictably, they emphasised the need for common decision-making. The houses in the village were to be a community of equals.

Common-decision making became the key issue of the negotiations. Jón Baldvin Hannibalsson, Iceland's foreign minister, said that it was of "crucial importance" for the political acceptability of an EC/Efta agreement, and Jean-Pascal Delamuraz, the Swiss economics minister, declared: "Let us be clear and state openly from the outset", he said, "there will be no new forms of co-operation between the European Community and the Efta States unless there exists the machinery to prepare and take decisions jointly".

As the talks had progressed, though, the cataclysmic and unexpected fall of the Berlin Wall changed the whole calculus. The newly liberated Soviet satellites of central and eastern Europe were in flux, their relationship with the EU yet to be defined.

Former French President Giscard d'Estaing sought to fill the gap, expanding on the Delors vision of a "European village". He suggested it could be made up of five "homes" comprising the Community states (EC), the Efta countries, the East European countries of the Warsaw Pact; the "isolated" countries - Yugoslavia, Albania, Malta - and the European part of the Soviet Union.

Delors, however, had other ideas. He wanted the former Soviet satellites to become full Community members in a "big bang" enlargement which, with Cyprus and Malta, was to add another ten members to what was soon to be the European Union.

A European Economic Space, a "village of equals" with common decision-making and full membership of the Single Market would have been more attractive than EU membership.

On 17 January 1990, therefore, exactly a year after he had offered joint decision-making, Delors clawed back his promise. "There will have to be some sort of osmosis between the Community and Efta, to ensure that Efta's interests are taken into account in major Community decisions", he told the European Parliament. "But this process must stop short of joint decision-making".

Efta fought a valiant rearguard battle but Delors stood his ground. By 19 December 1990, the it was effectively over. An Efta-EC ministerial meeting in Brussels declared that "the decision-making autonomy of the parties should be fully respected", leaving only a fig-leaf.

There were to be "procedures" to ensure that Efta state's views were "taken into account". This was limited to Efta experts being given an equal opportunity of consultation in the preparation of new EC legislation, on matters of relevance to the EEA.

Yesterday, though, I wrote of a "holy cripes!" moment in my research, when I came across something I hadn't expected. The "surrender", it turns out, wasn't the end of the matter.

By way of compensation for the lack of shared decision-making, Efta states insisted on a "general safeguard clause" which could be triggered unilaterally if serious economic, societal, and/or environmental difficulties of a sectoral or regional nature arose. In time, it became Article 112 of the EEA Agreement, on which Liechtenstein was able to rely to exempt itself from the free movement provisions.

Thus, it seems, the "safeguard measures" in the EEA Agreement were not an accidental or incidental add-on, but an essential part of the treaty, a "consolation prize", that held the whole treaty together, when it might otherwise have collapsed.

As to the Monograph, I argue that, in the Brexit negotiations, we could – instead for going for the EEA as an interim option – use the original model in the form of the European Economic Space, based on the concept of autonomous "houses" in a "European village".

In terms of detail, this would require revision of the EEA Agreement, permitting entry to nations which are neither Efta nor EU members, opening it up to the UK and any other European nations that wish to join – as was the original intention of the EES.

I then argue that the institutions might be invited to relocate to Geneva and establish formal relations with UNECE. Then, on the same basis that it is transferring originating authority for vehicle standards and agricultural quality standards, the EU might pass additional legislative chapters to UNECE until it is responsible for the entire EEA aquis.

This, under current provisions, does not require EU treaty change, although the EEA Agreement (Chapter 2 – Decision-making procedure) would need to be revised, relieving non-EU states of the requirement to adopt Community legislation.

Given that the UK and other EES members will already be UNECE members with full voting rights, this transfer of legislative responsibility will have the effect of introducing common decision-making to the acquis, on the lines pursued by Efta states during the EES/EEA negotiations.

From the perspective of the EU, these changes might seem counter-intuitive, calling as they do for a reversal of the integration process. But the rationale is to relieve it of the burden of managing the Single Market, allowing it to concentrate on its self-declared objective of pursuing political integration amongst its willing members.

Then building on the concept of a Europe of "variable geometries", those members that do not want political union should be encouraged to transfer to the EES, enabling them to remain in the European village.

Overall, this is the sort of radical surgery that might be needed to re-energise the continent of Europe and to restore the European Union to health, correcting the damage caused by the reckless enlargement of the past, trimming it to a more manageable size, based on members fully committed to political integration.

Going full circle, Brexit is as much a problem for the EU as it is for the UK, but it also presents opportunities for both. Delors's instinct for the creation of a European village, with separate, autonomous "houses" comprising a European Economic Space, was right. Brexit could be the means by which that "vision for Europe" is brought to fruition.

This is a contentious thesis and I know a lot of people won't like it. But I also take the view that the Brexit negotiations should not be viewed merely as making arrangements to secure the UK's exit from the EU. Rather, we should be defining the framework for our future relationship with the Union – thus picking up from the wording and intent of Article 50.

If viewed in this way, the negotiations are more likely to be seen in the more positive light, the purpose of the resultant framework being a construct which will support further developments.