The UK and Europe: time for a new relationship?

The eurozone crisis and EU moves towards closer fiscal, as well as economic and political, union, have given rise to renewed questioning of the UK’s relationship with the EU. Some opinion polls indicate majority public support for a referendum on whether the UK should stay in or leave the EU. In Parliament an in/out referendum has been one element of a wider debate about the kind of EU the UK would like to belong to. The Government has not ruled out a referendum on EU membership but believes the time is not right for one.

In December 2011 the UK Government’s failure to secure certain guarantees for the UK in exchange for UK agreement on an EU fiscal compact for eurozone States marked a significant moment for the UK’s already somewhat detached relationship with the EU (the UK does not participate in the euro, and has special arrangements in justice and home affairs matters, Schengen and the Charter of Rights).

Two main scenarios for the UK’s future relations with the EU have emerged from the recent debate – one in which the UK remains in the EU, but on different terms to its current membership; another where the UK is outside the EU, possibly in a different regional trading bloc. Under the first scenario the UK renegotiates the terms of its EU membership with a view to repatriating significant EU powers to national control. Many believe there should then be a national referendum on UK membership based on the outcome of the renegotiation. The second scenario is that, given EU moves towards fiscal integration and ever closer political union, the time has simply come for an EU exit, which is now provided for in the EU Treaty. This might be subject to a national referendum. The UK would then negotiate bilateral trade and economic agreements with the EU.