My pessimism in last Friday’s blog was misplaced: the Brussels EU summit has made meaningful progress, and progress in a British direction at that. The European Commission’s President, José Manuel Barroso, has acceded to Anglo-Dutch pressure to reduce red tape which limits businesses and economic growth. In a fringe meeting over the weekend, Cameron lauded his efforts, which have cut 6,000 pieces of legislation since 2005. The progress, which may have been worth 32.3 billion Euros across the continent, was supported by Chancellor Merkel and the leaders of Poland, Finland, Estonia, Sweden, and Italy.
Barroso indicated a preference for “lighter, simpler, cheaper, common-sense regulation” rather than the Brussels bureaucracy’s tendency to slap one-size-fits-all regulation on a problem first, and ask questions about the impact later. Interestingly, Barroso has adapted his language to that of London and Amsterdam, declaring: “we have to slash red tape”.
Cameron had included non-politicians in his delegation, including a business taskforce of Mark Bolland (M&S) and Dale Murray (entrepreneur) – “the best business brains in Britain”. The Prime Minister discussed his intention to persevere with deregulation in the hope it would free businesses “to enable them to compete and succeed…The Commission has done an excellent job in lifting the burden of bureaucracy. Now I want to get business engaged.” Cuts proposed in Cameron’s 60-page document include the requirement to keep health and safety records, which the government estimates could save 2.7 billion Euros.
Behind the camaraderie, divisions remain. Barroso is still pushing forward data protection regulations for April 2014. British SMEs fear this would disproportionately affect them, and that they would not see the benefits from a ‘digital single market’, which works in favour of multinationals. Britain has no veto in the matter, so cannot ensure ‘smart regulation’ in the future. In other back-room dealings, Cameron is reported to have gained Merkel’s support for the police and justice opt-out-opt-in strategy in return for his complicity in the further consolidation of the Eurozone.
The Brussels meeting also proved a stage to announce the completion of an EU-Canada trade agreement, CETA. The Commission estimates that benefits could include 23% more trade, worth $36 billion. Eurosceptics might welcome this announcement as much as pro-Europeans, since it heralds the possibility of Britain pivoting its economic interests to the Commonwealth of Nations.
Negotiations for the Comprehensive Economic and Trade Agreement were launched in 2008, so this success must come with a note of caution: a similar agreement with the United States (TTIP) is unlikely to be just around the corner, especially since America’s economy is far more complex than Canada’s, and European firms have a greater fear of being undercut by US imports. Congress is still in favour of ‘Buy American’ schemes, and transatlantic tensions remain around the Snowden revelations and sectoral protectionism.
