Met Traders

UK set for EU referendum

Posted May 13, 2015 Ashley Chadwick

The recent UK election produced the first Conservative majority for 23 years and with UKIP managing nearly 4 million votes, a 13% share, it is clear that talk of EU membership is not going to disappear any time soon.

One of the Conservative’s election pledges was to hold an in/out EU referendum by the end of 2017. Many viewed this promise as an attempt to win back right wing voters who were thinking about voting UKIP and it worked, with UKIP stealing plenty of votes from the left wing parties as well as the right, despite initial claims it was just the Conservatives that were going to lose votes to UKIP.

Within the first few days of the new Government, Prime Minister David Cameron has said he would like to hold the referendum earlier than 2017 if possible, in part to avoid clashing with French and German elections. The Conservative party will be campaigning to remain in the EU, alongside most other major parties, the exception being UKIP. However, it is thought up to 60 Conservative MPs on the right of the party, are in favour of leaving the EU.

What is certain is that David Cameron wants to change Britain’s relationship with the EU and seeks amendments to EU treaties, to make them more favourable to Britain and to exclude Britain from attempting to form ever closer union within Europe. Cameron wants these changes to occur as soon as possible and will certainly not want to hold the referendum until they have occurred, as the better the deal he can forge for Britain, the more support there will be to remain in the EU. In late 2014 Britain was faced with a £1.7 billion surcharge from the EU, due to the strength of the British economy relative to other economies in the EU. He refused, amid cries that this kind of demand was only making a ‘Brexit’ (Britain leaving the EU) more likely. In the end Cameron managed to negotiate the bill down, enabling him to maintain his tough on EU stance, but the entire event certainly increased support for the Out campaign.

George Osborne is set to lead the negotiations with the other members of the EU and initial discussions are being held prior to a Euro group meeting in June. However, German finance minister Wolfgang Schauble has said Germany will not be rushed into treaty changes and it may not possible to achieve them quickly.

The main focus for the Eurozone in recent years has been on Greece and the reforms they need to make and debts they need to pay. Thus far they have been meeting deadlines and they met a deadline on the 12^th of May from the Eurozone, albeit with money borrowed from the IMF. As long as Greece meets these repayments and talk of a Grexit subsides for a time, the major concern for Europe could be negotiations with Britain and the fears that they could leave the EU.