EU/UK Deal: What was it and what’s happened to it now?

In my post today I’m going to explain the deal that David Cameron had made with the European Union country’s before the UK’s EU referendum vote and look at what was agreed, why and what’s happened to it in wake of the UK’s vote.

What was the EU deal?

Prior to the UK’s EU referendum David Cameron met every one of the EU members in a whistle stop tour around Europe to gain preferential terms for the UK to allay some of the UK public’s fears about the EU.

This deal was effectively designed to retain sovereignty, combat some immigration issues and protect UK banks and businesses from being discriminated against because they are not part of the Eurozone.

This deal was not intended to be a wide ranging reform of the EU, something all EU leaders have been pushing for in one way or the other, this was specific, permanent special treatment for the UK. It’s true that some of these measures would be allowed to be used by other nations too, but the reality is that they were intended to address UK specific concerns.

What were the measures that were on offer?

There were five key areas of the deal immigration, migrant benefits, child benefits, sovereignty and the UK’s relationship with the Eurozone and I’ve provided a quick overview of each of these below.

Immigration

One of the hot topics for many in the UK, the UK would gain new powers to exclude people believed to be a security risk – even if they don’t have prior convictions, and stronger powers to ban and deport criminals.

The deal also allowed the UK to deny free movement to nationals of countries outside the EU who marry EU nationals, in a bid to stop so-called sham marriages, where citizens of the EU marry citizens of nations outside the EU to gain European Citizenship and access to specific countries.

Benefits

The emergency brake mechanism in the EU deal would allow any member country to limit access to in-work benefits for new EU immigrants. The law to set up the emergency brake will need the agreement of the European Parliament. The UK will then require the agreement of other governments to activate the brake, however it already received confirmation it can apply with “full expectation of approval”.

Under the proposal, any member country could notify EU authorities that it has experienced an inflow of workers of “exceptional magnitude” over “an extended period of time”; and that:

  • the size of the inflow affects “essential aspects of its social security system”; or
  • leads to serious difficulties in its employment market; or
  • is putting “excessive pressure” on public services.

In these circumstances EU lawmakers could authorise that country to restrict in-work benefits for new migrant workers for up to four years after they start working. They wouldn’t have to give their permission.

There’s an excellent legal examination of this aspect of the deal at Fullfact.org if you’d like more information.

David Cameron also wanted to stop migrant workers claiming benefits for children in other EU countries. He didn’t get that – but he did secure an agreement to ‘index’ the rate to the child’s home country which, in the majority of cases, is a lower rate than the UK’s.

Sovereignty

The UK secured agreement to amend existing treaties to make it clear that the references to ever closer union “do not apply to the United Kingdom” and introduced a “red card” system, where EU legislation can be reconsidered with support of 55 per cent of the 28 member nations.

This was designed to ensure that legislation remained relevant and could be reviewed at the request of member nations. It cannot be understated how massive a concession this is for the EU as the “ever closer union” principle is a core component of the EU and no other country has ever been offered this.

Eurozone

Another hugely contentious issue for the UK and one that a large amount of misinformation was spread about.

The EU agreed that countries not in the euro will not be called on to fund euro bailouts, like those paid to Greece in recent years and that they would be be reimbursed for central EU funds used to prop up the euro.

The deal outlawed discrimination against companies and individuals on the basis of their home currency, which was aimed at helping British companies trade in Europe and to protect the UK’s massive banking sector.

But didn’t the UK ask for more than this?

It’s true the UK went it with larger aims than this, many that the UK government knew would be completely unachievable, but they gained all the important UK specific concessions that they needed.

The reason for David Cameron announcing the exact terms that the UK wanted before negotiating, knowing he would not achieve them all, is that it gave him some areas that he could be seen to be conceding on to achieve his core goals. In every negotiation  every side needs to feel that they have some ‘wins’ to take back to their side, if the EU leaders flatly agreed to everything the UK wanted then their own populace would feel they had been dictated to by one member of the EU rather than have permitted them some concessions.

14637219186-657df315a2-zBut the European Commission President said there would be no further reforms, didn’t he?

No he didn’t.

Jean-Claude Juncker, the European Commission President and one of the driving forces behind the EU nations granting the UK’s special treatment in the deal did give a statement before the referendum that was very widely misreported and misrepresented.

The statement was designed to make it clear that voting out was not a route to a better deal that the EU had agreed in good faith. The part of the statement most widely quoted is below:

“The British policymakers and British voters have to know that there will be not be any kind of renegotiation”

“We have concluded a deal with the Prime Minister, he got the maximum he could receive, we gave the maximum we could give. So there will be no kind of renegotiation, nor on the agreement we found in February, nor as far as any kind of treaty negotiations are concerned.” “Out is Out”

This statement was reported by the UK’s Leave campaign as there never being any further reform of the EU, which is not what was said at all. The point that Jean-Claude Juncker was trying to make is there would be no more “special treatment” for the UK outside of this deal and any further reforms would have to be agreed by and benefit all the EU member states. The mechanism to do this was agreed as part of the deal that I outlined above, where EU legislation can be reconsidered with support of 55 per cent of the 28 member nations.

So what’s happened to this deal?

The deal was contingent on the UK voting to remain within the European Union in their referendum and, as the UK voted to leave, the deal is no longer on offer.

That being said if the UK decided not to exit the EU it’s very likely that the same terms could be agreed as part of the negotiations to stay.

Conclusion

The deal that David Cameron negotiated did not get every concession that he outlined to the UK public he was looking for before he left, that being said he and every other person that’s ever negotiated knew that he was never going to get everything he asked for.

The deal provided for historic changes in the way the UK interacts with the EU, protected UK businesses and reduced the UK’s liabilities. Most importantly it opened the doors for far wider ranging reforms with EU countries able to challenge existing legislation if a small majority are in favour (55%).

The deal is not on the table today because of the referendum result but if the new UK government decides to stay within the EU, as the vote to leave was an advisory vote, it’s entirely conceivable that the same deal would be offered to limit the damage being done to the UK and EU economy by the present uncertainty.

The chances of getting a better deal however look thin at best as this would mean EU leaders will be seen by their own people as lying to them and conceding their rights at the request of one member state, something the UK population would be equally against if the roles were reversed.

What do you think?

We’re always open to feedback and would love to hear your thoughts on our analysis, any questions you have or any other suggested topics so please get in touch using the comments section below.

Source and Further Reading

The links below provide some more in depth information and views on this deal if you’d like more information and I’ve included links to some of the information we’ve used when compiling this article. I am going to keep adding to this list over the coming day or two and please let me know if you feel I’ve missed an important link here.

 

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