Britain's Demands Are Good for Europe

George and Wolfgang are such good friends.

Photographer: Carsten Koall/Getty Images

The U.K. government has begun to flesh out the reforms it would like to see the European Union undertake. Its proposals won't be easy to achieve, but they make sense -- and not just because they'd help Prime Minister David Cameron keep Britain in the club. They'd be good for the rest of the EU as well.

Tuesday's speech in Berlin by Cameron's finance minister, George Osborne, struck the right balance. In a spirit of friendship and solidarity, free of carping, he argued that Europe needs to put its existing two-tier character on a more stable legal footing. He's right.

Will Britain Leave the EU?

As things stand, there's a divergence of interests. Members of the euro area may need more political integration to make the single currency a success, but, as Osborne said, "the British people do not want to be part of an ever closer union." This difference needn't break the EU apart, but it will have to be accommodated more deliberately than it has been up to now.

At the moment, the semidetached status of Britain and the other eight non-euro members of the union is a constitutional anomaly. The EU operates on the presumption, enshrined in its treaties, that all of its members are heading to the same destination of "ever closer union," with the euro as their currency. This idea no longer promotes prosperity and stability for all of Europe.

Countries that seek closer political integration ought not to be thwarted by those, like the U.K., that neither need nor want it. Conversely, efforts to improve the single-currency system -- for instance, through closer coordination of fiscal policy -- should not be foisted on unwilling non-euro countries. At the same time, all members of the union, whether they've adopted the euro or not, share a compelling interest in maintaining and deepening the single market for goods, services, capital and labor. Where the interests of all are at stake, all should have a say.

These different goals can be reconciled, but not with a one-size-fits-all approach. As a practical matter, the EU is already a Europe of different speeds -- but the legal underpinnings (and visionary rhetoric) are constantly at odds with this reality. It's wrong to dismiss this tension as unimportant. The result is endless constitutional instability, which worsens the fears and resentments that drive anti-EU sentiment in many of the member states.

To be clear: In calling for a new -- and legally binding -- settlement that recognizes different kinds of EU membership, the U.K. is asking a great deal. The legal complexities are daunting, and the idea will be seen in many European capitals as fundamentally anti-communautaire. That it is Britain, ever the reluctant European, pressing the point makes the prospect even less palatable.

But if not the Brits, then who? The European Union's founding vision of ever closer union for all has outlived its usefulness. The sooner Europe comes to terms with that, the better.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.