Should we stay or go? Cameron pledges British referendum on EU.

Britain's prime minister declared himself in favor of an up-or-down referendum on whether the UK should remain a member of the European Union.

Suzanne Plunkett/Reuters
Britain's Prime Minister David Cameron is seen on a television screen as a dealers trade on the floor at IG Index in London January 23. Cameron promised on Wednesday to give Britons a referendum choice on whether to stay in the European Union or leave if he wins an election in 2015, placing a question mark over Britain's membership for years.

Britain's prime minister used a long-awaited speech Wednesday to declare himself in favor for the first time of an up-or-down referendum on whether the UK should remain a member of the European Union and committed his Conservative Party to holding one by the end of 2017 if it won the next general election.

"I say to the British people: This will be your decision. And when that choice comes, you will have an important choice to make about our country's destiny, " Prime Minister David Cameron said in a London address largely designed to relieve the pressure from "euroskeptics" in his own party, his own cabinet, and the Conservatives' upstart rivals, the UK Independence Party.

Delivered with one eye on a domestic audience, the address generated some of the most positive headlines in the Tory leader's career from right-of-center British media outlets and predictions that it could spark a fillip in the polls at home. But the speech risks years of uncertainty when it comes to relations with the its other intended audience – Britain's European Union partners.

In comments that would be just as resonant in struggling parts of the eurozone, the single currency area which Britain is not part of, Mr. Cameron said that "public disillusionment with the EU is at an all-time high" while also describing democratic consent for the EU within the UK as "wafer-thin."

At the same time, he was also careful not to tilt too far to the euroskeptic right, which wants an immediate referendum between the European status quo and an exit. Cameron said that would be "an entirely false choice," as the union was likely to be "transformed perhaps beyond recognition" over the coming years by the measures needed to save the single currency. 

"We need to allow some time for that to happen – and help to shape the future of the European Union, so that when the choice comes it will be a real one," he said.

However, some experts have voiced caution against Britain placing too much store in the belief that an opportunity for renegotiation will arise in the form of other EU states seeking a revision of treaty arrangements in order to underpin new governance arrangements for the eurozone. With the crises that have enveloped the single currency currently in a lull, there has been a downturn in enthusiasm for re-opening of treaties, including on the part of the EU's powerhouse, Germany.

"There has already been some miscalculation over what German intentions were over the fiscal compact, and I think there is a danger here of misreading Germany again,”  says Simon Bulmer, the head of the department of politics at the University of Sheffield, who recalls how Germany last year pushed through a key treaty to enforce budget discipline within the bloc – without UK support.

"I don't think Germany has made up its mind over whether it wants a treaty reform or not, partly because of the calculation over Britain,” added Professor Bulmer, an expert of relations between EU states, especially between the UK and Germany.

“It doesn't want that issue to come on to the agenda again when it has got the eurozone to deal with. If Cameron has made an assumption that Germany is willing to negotiate with Britain, on Britain's interests, then I think he may be badly mistaken."

Powers wanted back

British conservatives are eager to repatriate powers from Europe on social and employment laws, allowing, for example, the UK to restrict the payment of benefits in Britain to EU citizens entitled to settle there.

However, rather than setting out a checklist of powers he wanted to win back from the EU, Cameron was deliberately vague in identifying a series of principles – flexibility, competitiveness, and others – that he identified as the foundation for the EU in future.

Much of the initial reaction from Europe was withering. The German foreign minister, Guido Westerwelle, said ''cherry-picking'' on aspects of EU membership was not an option. France's foreign minister, Laurent Fabius, said it was impossible to have an "a la carte" Europe and, taunting France's cross-channel rivals for investment, warned: "If the UK decides to leave the EU, we will roll out the red carpet to businessmen." At home, pro-European opponents described Cameron's address as "schizophrenic."

On the eve of the speech, there was a taste of what many pro-Europeans in Britain warn would be the "second class" role the country could be consigned to if it drifted away from the EU – having to go along with decisions made by the bloc without having a real say at the heart of decision-making any longer.

UK risks being sidelined

Eleven European Union countries, including France and Germany, received a green light to work on the introduction of a tax on financial transactions. While Britain has opted out of the tax, which is designed to discourage speculative trading, investors trading on the London Stock Exchange will still have to pay it if they are based in one of the 11 countries.

Notwithstanding the increasingly fraught debate between British euroskeptics and their opponents, Cameron seemed to have done enough Wednesday for his address to at least be ranked in the future alongside other landmark speeches by his predecessors on Britain’s relationship with the Continent.

They include Margaret Thatcher’s 1988 speech in the Belgian city of Bruges, when the then prime minister warned against trying to fit nations into “an identikit European personality.” That speech has been an inspiration for generations of Tory euroskeptics, although it lay the seeds for splits in her own government.

Others include two speeches by Mrs. Thatcher’s successor, John Major, when he appeared to signal a break with her vision of Europe when he declared in 1991 that wanted to see Britain at the “heart of Europe,” but then marked an embrace of euroskepticism again with a 1994 address in the Dutch city of Leiden. Six years later, and heading a Labour government, Tony Blair used an address at Warsaw’s stock exchange to make the case for an expanded European Union.

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