Cameron quandry for EU anniversary

UK leader faces impossible political balancing act, wanting looser ties as Europe moves ever closer.

LONDON // It has been called a landmark speech, one that will point the way forward for Britain's often difficult relations with the European Union.

But David Cameron's statement on the EU, due later this month in commemoration of the 40th anniversary of Britain's entry into the bloc, has already been delayed.

The British prime minister faces an almost impossible political balancing act.

On the one hand, he needs to placate increasingly restless European partners, who are set to integrate ever closer in 2013 and are tired of Britain dragging its feet.

Britain has historically been wary of entering into too close a relationship with Europe.

In the 1980s, under the prime minister, Margaret Thatcher, that relationship got decidedly difficult and she has since argued that Britain should leave the EU. Britain has negotiated a number of opt-outs to EU treaties and is not a member of the euro zone with its common currency, the euro.

On the other, he needs to speak to the many eurosceptics in his own Conservative Party as well as to the country at large, where opinion polls now show a majority would vote for the UK to leave the EU given a straight in-or-out choice.

"He basically needs to write two speeches," said Petros Fassoulas, chairman of European Movement UK, an organisation that calls for closer integration with the EU.

And, if as appears likely, Mr Cameron will call for a renegotiation of key points in the Lisbon Treaty to form the basis for a future popular referendum, the speech could leave him in an "awkward" position.

"A renegotiation is not really available because there is no appetite in the EU," said Mr Fassoulas. Should Mr Cameron try to fail, Mr Fassoulas argued, the UK could eventually be forced into an in-or-out referendum after the next general election.

"He runs the risk of coming home having to say that his negotiations failed and having to propose that we actually leave the EU."

But critics of Britain's relationship with Europe say that danger is overblown. Indeed, some suggest that it would both be in Britain's and the EU's interest to ensure that a workable arrangement can be negotiated to also serve as a model for other countries not willing to integrate too closely.

Euroscepticism is not solely a British phenomenon, said Pawel Swidlicki, a research analyst with Open Europe, an organisation that argues that the euro zone crisis has discredited the notion of ever-closer union.

In addition to Scandinavian countries such as Denmark and Sweden, which have not joined the common currency and remain outside the euro zone, southern European countries may begin to baulk at an outlook of "constant austerity", should the eurozone crisis continue.

"It's as much a turning point for Europe as it is for Britain," Mr Swidlicki said. He said Britain's efforts to renegotiate its relationship should be seized upon as an opportunity to "make the EU work better".

With its geopolitical clout, financial markets and contributions to the EU budget, Mr Swidlicki argued, few in the EU would really like to see the UK leave the union, even if Britain can be an "awkward partner".

Anti-EU sentiment is growing in the UK. In a late December Guardian/ICM poll, 51 per cent of respondents said they would vote to take Britain out of the EU if presented with a straight choice against just 40 per cent who would keep Britain in.

The United Kingdom Independence Party, which runs on an almost exclusively anti-EU platform, saw its popularity spike last month after census results showed 4 million more immigrants in the country since 2001, largely from countries which recently joined the EU.

The mood is such that even the opposition Labour Party, which under former prime minister Tony Blair signed the Lisbon Treaty, is taking note. Ed Miliband, the leader of the opposition, has blamed "real failures" in the EU for growing scepticism at home, prompting Mr Blair to liken such scepticism to a virus.

Much of the discussion centres around a perceived loss of British sovereignty over key issues such as the movement of labour, which critics say has hurt the British economy. The EU is Britain's biggest trading partner and a slowdown there has hurt the British economy, even as the free flow of labour mostly brought less qualified labourers to England, with few going the other way.

The Eurozone crisis, meanwhile, has brought out fault lines in the union, analysts say, that only either further integration or disentanglement can ameliorate. Greater integration would allow for more flexible legislation and therefore quicker and more cohesive action in times of crisis. Greater disentanglement would allow the same, but on a national rather than EU level.

With new powers for the European Central Bank introduced in September 2012, the eurozone is set for greater integration, even as Britons are increasingly looking to apply the brakes.

But in Europe, British popular sentiment is seen to be largely a result of a failure to hold a serious discussion about the EU.

"The Brits basically didn't nurture any proper thinking about Europe at all," said Ulrike Guerot, a senior policy fellow with the European Council on Foreign Relations. "That's why they are now kept in a very anti-European, very silly, very childish discussion about Europe."

Ms Guerot also suggested the British government was "highly overestimating its negotiating capacity", and its ability to go it alone. But she welcomed what she said was now a chance, with Mr Cameron's speech, to focus British minds, before populist politicians talk the country into an either-or referendum.

"The best thing [Mr Cameron can do] is to keep the situation slightly open and then for the British elite to mobilise public opinion and make clear the cost of non-integration."