Brussels, 21/02/2016 (Agence Europe) - After a marathon of nearly 30 hours, the heads of state and government of the European Union ended up agreeing on a deal aimed at granting a new arrangement for the United Kindgom's membership of the EU.
Late on the night of Friday 19 February, the 28 EU member states agreed on what has taken the form of an international legal agreement, which is thus legally binding. This will have to be integrated into the future European Treaties - as British Prime Minister David Cameron wanted. Cameron, for his part, has committed to defending this agreement in his country, ahead of the referendum there on 23 June on whether the UK should remain in the EU (see other article).
In implementing the changes that this agreement involves, the European Parliament will have co-decision in its areas of competence. This will especially be the case on social policy issues, when the European Commission drafts the famous safeguard clause authorising a member state, in other words the UK, to deny certain in-work social benefits to a migrant worker from another member state.
Generally, this agreement sets out the different paces of integration wanted by the member states by stipulating in black and white that different paths are possible, enabling those that so want “to go ahead, while respecting the rights” of the member states that do not make this choice. As regards the substance, while the British demands on the “competitiveness and growth” of the EU were the most consensual, the discussions focused on the integration of the eurozone and economic governance, on sovereignty and the principle of ever closer union, and on social benefits.
Eurozone and economic governance - a balanced compromise. The approved agreement states that economic and monetary integration is necessary for the countries that have the euro as their currency, but remains “voluntary” for those with a different currency. This integration will nevertheless continue to be open to the member states that want it. One of Cameron's major demands was that a member state be able to activate an “emergency brake” if a decision taken by members of the eurozone was to have repercussions on the whole of the single market.
After negotiations, Cameron obtained agreement that a single member state can trigger this brake, and that it is not necessary to have the agreement of several member states to be able to trigger it. This will not, however, equate to a right of veto - which was a red line for countries such as France and Germany. A member state will thus be able to request a discussion at the Council for a measure concerning, for example, banking union, after providing a reasoned justification. This step could lead to a discussion at the European Council but will not result in a “veto”. “The euro is the currency of the EU” and “there is no veto possible” on the desire of the eurozone to integrate further, said European Commission President Jean-Claude Juncker.
The rules of financial regulation will have to apply to all member states and all financial institutions, even if this is done more uniformly in eurozone countries. The supervisory authorities of the non-eurozone countries will nevertheless remain responsible for implementing these rules. In addition, the right has now been set out for London and the non-eurozone member countries not to contribute to the bailout of eurozone countries. These non-eurozone member countries would thus be reimbursed if money from the European budget had to be used to finance a certain programme.
Sovereignty and ever closer union - the EU recognises different paces of integration. The agreement states that the UK is not committed to ever closer political integration given its situation and with regard to the Treaties. This fact will be written into the Treaties when they undergo future revision. The EU28 say that the principle of ever closer union, written into the preamble of the Treaty, does not offer a legal basis to extend the scope of the Treaties or the scope of secondary legislation, and should not therefore be used to broaden the competences of the EU or its institutions extensively.
The agreement also states that the competences conferred on the EU can only be modified or extended through a Treaty change - which involves unanimity. The principle of ever closer union between the peoples is thus found to be “compatible with different paths of integration” and does not oblige the “member states to reach a common destination”.
As regards subsidiarity, the EU28 agreed that 55% of national parliaments can, within a time limit of 12 weeks, request that a brake be put on legislation being prepared that would be incompatible with subsidiarity. The member states could then abandon the draft legislation or amend it.
Social benefits and family allowance - Cameron's victory. Stating that the Court of Justice of the EU has already set limits on the rights that can be enjoyed by European migrant workers (social tourism jurisprudence - see EUROPE 11389), thus already framing abuses, the UK's 27 EU partners also agreed that the payment of in-work social benefits to European migrant workers who have newly arrived in the UK may be made conditional upon a period of seven years. Once this clause is activated, therefore, in 2017 or 2018 (the European Parliament must co-decide), the British authorities will be able to deny in-work benefits to a migrant worker for up to four years over this seven year period. In Cameron's view, this should enable savings of up to £10,000 (Ed: €13,000) per year in tax credits for some migrant families.
Although Cameron spoke of full denial of the payment of in-work benefits for European migrants, the text in fact provides for this payment to be graduated. A progressive return to benefits over four years is therefore provided for, according to how connected the worker is to the British labour market.
In practice, Cameron said, if this clause was to begin in 2017, it would then apply until 2024. However, if a worker arrived during the last year that this clause was in operation, the worker could be denied social benefits until 2028. This scenario is nevertheless not the one that was understood by other delegations - with Poland in particular saying at the end of the meeting that this point regarding the periods of seven and four years and their overlap should be the subject of negotiations when European legislation is reviewed. The Commission is due to make a request for examination of Regulation 492/2011 on the freedom of movement of workers inside the EU.
As regards family allowance, the EU28 put on record that from 2020 onwards, the level of family allowance will have to be indexed to the standard of living and level of benefits of the country where the child of the migrant worker lives. This measure, which will go through a revision of the regulation on the coordination of social security systems (833/2004) will also only apply to new arrivals, thus responding to the fears of Eastern member states. All member states will be able to follow the same approach and index family allowance exported to another member state in the same way.
Self destruction clause? The agreement states that all these arrangements will only apply if the UK notifies its desire to remain a member of the EU. According to a European source, “if the country votes 'no' then this agreement will evaporate”. Belgium was particularly insistent upon this. (Original version in French by Solenn Paulic)