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Cameron wobbles on a European tightrope

DAVID Cameron will outline tomorrow how he intends to renegotiate the UK's relationship with Europe.

That the long-promised speech has been much delayed and then hastily brought forward to avoid clashing with the 50th anniversary of the Franco-German treaty exemplifies the uncomfortable, ambiguous relationship his Government has with the EU.

He must placate the Eurosceptics in his party – whose profile has risen along with the UK Independence Party's increased share of by-election votes – while ensuring the UK's continued membership of the EU. This will demand a sure-footedness he has not so far displayed.

Yesterday, the Fresh Start Project group of Conservative MPs published their Manifesto for Change, which demonstrated the extent of revisions to EU treaties they want. These include repatriating powers on social and employment law, an emergency brake on financial services issues, a UK opt-out of policing and crime measures, legal safeguards for the single market and ending the European Parliament's sittings in Strasbourg.

There is a debate to be had about this wishlist. But the flaw is that it is based on the assumption that future treaty negotiations will be necessary to underpin closer banking union within the eurozone, providing the UK with an opportunity to renegotiate the terms of its membership.

EU officials are increasingly confident that a eurozone banking union and future moves towards a federal budget can be accomplished within current treaties. If that is the case, any change to British membership terms would depend on re-opening existing treaties. Stiff opposition, not least because it could open a Pandora's box of other member states also demanding individual opt-outs, means it could be years before renegotiation is possible.

That in turn would increase the calls for an in/out referendum. But pledging to hold one if he is Prime Minister after the 2015 General Election would be a dangerous gamble for Mr Cameron. If his position on Europe is to remain credible, and carry weight within his own party, he must make the case for the UK's continued membership more convincingly. The extent to which the anti-EU lobby has come to dominate the Conservative Party is evident in the case of the 20 Tory MPs who have signed a letter warning of the massive damage leaving the EU would cause Britain but who have asked for their names not to be made public for fear of losing their seats.

The business case for the EU is indisputable. Membership provides access to a market of 500 million people to which we sell 50% of our exports, with freedom of movement for people and capital and low transaction costs. Foreign companies invest in Britain because it is a gateway to the world's largest single trading area.

It is better to negotiate change from the inside than the outside. Member states that marginalise themselves also lose clout.

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