UK Prime Minister David Cameron met with EU Council President Donald Tusk in Brussels last night to try and hammer out the final details of an agreement on reforms with the EU in preparation for the in/out Brexit referendum that is tentatively slated for June 23.
Our expectation continues to be that a deal will be announced at the February 18-19 – or at the latest at the March 18-19 – European Council.
*** Cameron’s original request to cut benefits for EU workers for four years has been softened, and the British side seems now inclined to accept a more palatable, EU-friendly version of that, whereby a so-called “emergency brake” will be available to all EU member states from day one after the UK referendum. Under the current proposal, any decision would in any case be vetted by the Commission or the Council. ***
*** And that is at the moment the real sticking point – whether to ultimately let the Council or the Commission decide ex-post (and not allow the Commission an ex ante scrutiny) on the legitimacy of an emergency brake decision taken by a Member State. That distinction would make a world of difference to the UK given that the Council has far more political flexibility in its judgment than the Commission, and, most important, has much more legitimacy among British voters, being seen as a gathering of sovereign states rather than a supra-national entity sitting in Brussels. ***
*** The case law of the European Court of Justice implicitly confirms that if Member States wish to restrict the free movement of EU citizens on grounds of public health, they may do so without being subject to an EU control procedure (Bressol case): this we believe may be the basic model and legal framework negotiators are looking at. ***
At this time, we hear a solution could be to allow the emergency brake to be applied immediately – without prior Commission vetting – with discussions that would then need to take place at the Council level, as is currently the case with the suspension of social security and immigration of large numbers of people.
For example, if a Member State currently were to pull an ’emergency brake’ to stop EU decision-making on social security for EU citizens exercising free movement rights, there would be discussion in the European Council, and the proposal could ultimately be blocked if there is no agreement there among all Member States.
A draft text should be circulated tomorrow as negotiators continue to hammer out the latest details. A lot will however also depend on whether the parties can solve drafting problem raised by the French Sherpa, who has expressed concerns over the UK push to include protection of the City of London from the possibility of the Eurozone teaming up to approve EU financial legislation that could go against British interests.