UK has not lost euro veto

by Jack Schickler | 11.03.2016

Rather than strengthening our hand with EU partners, David Cameron’s renegotiation deal in February may have taken away some important bargaining chips, say Brexit campaigners.

Cabinet minister Iain Duncan Smith told the BBC’s Today programme we have “just given away our right to veto” euro area changes that will affect us, for “next to nothing” in return. (2h19’). Chris Grayling, another cabinet minister, says the deal constitutes a “significant – and underappreciated – loss of leverage. We now lack a key tool in preventing further EU integration – which we might be dragged along into”.

Both seem to refer to a passage in the deal which states that non-euro members such as the UK should “not impede the implementation of legal acts directly linked to the functioning of the euro area and shall refrain from measures which could jeopardise the attainment of the objectives of economic and monetary union”.

The quid pro quo is that the deal sets limits on further euro zone integration: the euro zone should respect the single market and not discriminate against non-euro members; and Britons should not foot the bill for a euro zone bailout. These sections of what Cameron renegotiated be will be incorporated into the EU’s own Treaties “at the time of their next revision”.

But this does not change the formal voting rules, according to Steve Peers, EU law professor at the University of Kent. “We have a veto on further Treaty amendments relating to the euro zone or anything else, which was not given up”, he explains. The deal sets limits on what further euro zone integration can do, and says we won’t impede further integration that respects those limits, according to Peers. But those limits are not set out in much detail – in contrast, say, to the section on welfare rules, which is much more specific.

Dr Pavlos Eleftheriadis, at the Oxford University law faculty, broadly agrees with Peers. For him, the commitment not to oppose euro zone measures is “vague”. Moreover, Eleftheriadis notes, we only agree not to impede “implementation” of legal acts, not their creation or agreement.

In short, the UK would still in practice be free to veto or vote against future measures without fear of legal reprisal. This is despite the fact that, as we have previously reported, the renegotiation is binding in international law.

But that doesn’t mean Britain can now block euro zone integration without fear of political repercussions. If we created obstacles without good reason, our partners would undoubtedly feel we had broken the spirit of the deal. To that extent, Duncan Smith and Grayling have a point. But they should remember that, if they get their wish and Britain quits the EU, we will lose all influence on how the euro zone develops and have no power to stop anything it does, even if it is detrimental to our interests.

Edited by Yojana Sharma and Hugo Dixon

This piece was updated on March 17 to clarify the legal position of Britain’s veto, add a comment by Dr Eleftheriadis and correct the month when Cameron’s deal was done to February

3 Responses to “UK has not lost euro veto”

  • It’s actually misleading at the end to state ‘if they get their wish and Britain quits the EU, we will lose all influence on how the euro zone develops and have no power to stop anything it does, even if it is detrimental to our interests.’

    We don’t lose all ‘influence’ as the decision shaping process would include EFTA members and other people involved with trade agreemants with the EU. It seems very likely that should we leave the EU that we would end up joining back up in a trade agreemant so there’s still inclusion within the decision shaping process. Losing all influence implies the influence we had was large and wortwhile in the first place as well, yet when it came to the referendum (our biggest chance to get all countries together to focus on specific issues) the best chance to gain reform (also aided by migration and financial crisis pressures causing losing britain to be quite damaging for the EU) there was very little result in ways of shaping how the EU works. At best it managed to gain a few benefits that aren’t guaranteed and won’t be given any chance to see what the actual results are before we vote.

    • “there was very little result in ways of shaping how the EU works.”

      This is a strong argument for Brexit. Much of the Remain language is vague stuff about how we’d be “stronger in” the EU, influencing what goes on.

      But this seems alarmingly fanciful. We don’t, in reality, hold much sway in the Parliament, nor in the Commission. The strongest negotiation is to walk away, or to say you are going to leave. But when there was a very real danger of us leaving – they gave almost nothing: it looks more and more as though they will ignore what was nominally agreed, such is their arrogance (and boy are the eurocrats arrogant..).

      We need to regain full sovereignty, not give any more away, and cooperate fully with the EU from a position of making our own decisions.

  • An emergency loan for Greece through an EU-wide bailout fund using up to £850m of British contributions from the European Financial Stability Mechanism fund. Osborne complained that the decision to use the EFSM — despite previous agreements that it would not be used in eurozone bailouts — was made in a crisis meeting with no noneurozone country official in the room. Osborne was told by EU officials that the nine noneurozone countries didn’t need to be consulted because the 19 eurozone countries have the qualified majority necessary to make such decisions.