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By Ambrose Evans-Pritchard, International Business Editor
5:37PM GMT 24 Nov 2014
597 Comments Britain is already a lame duck within the EU’s internal governing structure and is losing influence “by the day” in Brussels, even before David Cameron holds a referendum on withdrawal.
This self-isolation has upset the European balance of power in profound ways, leading ineluctably to German hegemony and a unipolar system centred on Berlin. It is made worse by the near catatonic condition of France under Francois Hollande.
Smaller states no longer form clusters of alliances around a three-legged diplomatic edifice made up of Germany, France, and Britain. They are instead scrambling to adapt to a new European order where only one state now counts. So too is the EU’s permanent civil service and the institutional machinery in Brussels and Luxembourg.
Such is the verdict of Roman Prodi, the former Italian premier and ex-president of the European Commission.
I pass on his thoughts because the Brexit debate in the UK invariably dwells on what the consequences might or might not be for Britain, while taking it for granted that Europe itself would somehow sail on sedately as if nothing had changed. But everything would change, and we can already discern it.
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“France is ever more disoriented and Britain is losing power by the day in Brussels after its decision to hold a referendum on EU membership,” he said.
“All the countries that previously maintained an equilibrium between Germany, France, and Britain (from Poland, to the Baltic States, passing through Sweden and Portugal) are regrouping under the German umbrella,” he told the Italian newspaper Il Messaggero.
“Germany is exercising an almost solitary power. The new presidents of the Commission and the Council are men who rotate around Germany’s orbit, and above all there is a very strong (German) presence among the directors, heads of cabinet and their deputies. The bureaucracy is adapting to the new correlation of forces,” he said.
“Even the Americans are doing so. When there is a problem between Europe and the United States, President Obama telephones Mrs Merkel, not the British prime minister. In short, Germany has become the referee of Europe. As is well known, the rules in football are enforced when the referee whistles, and right now Germany is issuing the yellow card to a lot of countries,” he said.
There is a good deal of federalist slapstick in these comments but Mr Prodi touches on a point that we tend to gloss over in the internal “Brit-Brit” debate on Europe. The Atlantic free trade deal between the EU and the US has stalled in great part because Britain no longer has the gravitational pull to forge a dominant alliance, while Germany is dragging its feet.
The new order was all too clear when Jean-Claude Juncker was picked to take over the Commission. Sweden’s Frederik Reinfeldt and Holland’s Mark Rutte both joined Mr Cameron in opposing Mr Juncker at first - calling for fresh blood – but left the British leader dangling alone once Chancellor Merkel began to apply the gentlest of pressure.
“Wherever you go in Europe, people want to be close to Berlin,” said Mats Persson from Open Europe. “You feel it in Madrid. The Czech government is obsessed with this. There is a lot of Merkel hugging going on.”
The implicit argument is that by disengaging from Europe, Britain is bringing about the Europe it most fears: a more protectionist bloc, and one less amenable to our liberal view of the world.
You might argue that any benefits derived from stopping the Continent hurting itself are outweighed by the benefits of keeping well clear – and I would concur, chiefly for reasons of democratic accountability and sovereign self-government – but you cannot wish away these risks altogether.
Britain’s clout in Brussels was already waning before Mr Cameron pledged an EU referendum. It stems from Maastricht. By staying out of monetary union – with all its implications – the UK effectively opted out of the EU's future even then. This was disguised in the early years of EMU. It became crystal clear once the crisis exposed the fundamental failings of an orphan currency with no economic government to back it up.
Mr Cameron’s diplomatic loneliness was plainly visible at the December summit in 2011, when he felt forced to veto the Fiscal Compact. He was of course right on merits. The Fiscal Compact – pushed through outside the EU treaty structure – was and is an atrocious mix of pedantry and pre-modern economic illiteracy, with a delayed fuse that risks trapping the eurozone in depression for another decade.
Yet such was the zeal to push it through that he could not muster an alliance even from those countries – the majority – that knew it to be folly. They simply bent to power. In other words, he could not save the European political leaders from their own suicidal errors.
German hegemony is entirely unwelcome to Germany itself, and that is part of the problem. Frightened of its own historical shadows – “rearmament and dictatorship” as Mr Prodi puts it rather harshly – Germany still tries to think and behave much of the time as a subordinate power, like a large Sweden. But it is not a large Sweden; it is the policy-maker for a bloc of over 500m people.
It denies its own leadership, retreating into 3pc deficit rules and formulaic austerity, with very destructive results when leveraged through the whole eurozone by the mechanisms of EMU.
If Mr Prodi is broadly correct – and I suspect he is – British withdrawal from the EU will accelerate an unstable chain reaction and ultimately cause the whole project to unravel. It is simply unthinkable that the EU can survive as a reconstituted Holy Roman Empire governed from Berlin, yet without at least the charisma and sanctity bestowed on the medieval Hohenstaufen by Rome.
The EU is either a treaty club of democracies and equals, or it is nothing
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