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Analysis - Britain wins EU games and sets but match never ends

BRUSSELS (Reuters) - Britain has a long history of short-lived negotiating triumphs in Europe.

Britain's Prime Minister David Cameron arrives to attend an EU-CELAC Latin America summit in Brussels, Belgium June 10, 2015. REUTERS/Francois Lenoir

It has lurched from one renegotiation of its membership terms to another over the past four decades, with successive governments declaring victory only to find the issue just won’t die at home.

When Prime Minister David Cameron outlines his objectives for yet another renegotiation-to-end-all-renegotiations at a European Union summit this week, ahead of a referendum he has promised voters before the end of 2017, his 27 partners may feel a weary sense of deja vu.

“I would be surprised if this referendum did resolve Britain’s relationship with Europe,” said a senior European diplomat close to the discussions. “The nation state is a very old concept and perhaps the British have not fully recognised that it may be slightly out of date.”

Few EU governments or Brussels officials believe Britons will ultimately take the risk of voting to leave the 500-million-strong economic and political bloc, however little some may enjoy living in a community with continental foreigners.

But many EU partners doubt the forthcoming negotiations and referendum will settle the matter once and for all, or even for more than a couple of years. Indeed, Cameron’s 2014 referendum on whether Scotland should leave the United Kingdom has hardly taken that issue off the agenda.

“The great lie about referendums is that they are definitive,” said Denis MacShane, a former British minister for Europe and author of “Brexit: How Britain will leave Europe”.

Britain had been in the European Economic Community (EEC) little more than a year in 1974 when Labour Prime Minister Harold Wilson sought to renegotiate the “Tory terms” of accession accepted by his Conservative predecessor, Edward Heath, and to let voters to decide whether to stay in the EEC.

Then as now, the gambit was more about trying to preserve the unity of the ruling party than the membership terms.

In a pamphlet distributed to households before a 1975 referendum, Wilson’s government boasted of “Britain’s new deal in Europe”, secured “only after long and tough negotiations”.

The fine print was about more cheap imports of Commonwealth sugar and New Zealand dairy produce, and the right not to impose value added tax on essential foodstuffs.

On an issue that reverberated for decades, the government said the “threat” of Britain having to maintain a fixed exchange rate with its European partners had been removed. And it claimed to have won more money back from the common budget in the form of a “correcting mechanism”, although that was never triggered.

Britons voted by 67.1 percent to stay in the European Community. But Labour ended up splitting over Europe anyway, with several prominent pro-Europeans leaving to form the Social Democratic Party while the remaining Labour Party lost the 1983 general election on a promise to withdraw from the EU.

The virulence of those debates is worth recalling. Labour left-winger Michael Foot argued before the 1975 vote: “The British parliamentary system has been made farcical and unworkable by the superimposition of the EEC apparatus. It is as if we had set fire to the (House of Commons) as Hitler did with the Reichstag.”

Wilson’s renegotiation and landslide referendum victory did not prove a lasting solution.

From 1980, Conservative Margaret Thatcher made the fight to secure a permanent annual rebate from the EU budget her central policy in Europe, threatening to obstruct all community business with the battle cry “I want my money back”.

In 1984, Britain won a treaty-anchored yearly refund on its contribution to EU coffers, on the grounds that three-quarters of spending went on the Common Agricultural Policy at the time, and Britain, then one of the poorer member states, did not benefit much from farm subsidies since its sector was smaller.

Thatcher’s negotiating achievement opened the way for the biggest leap forward in pooling of sovereignty in EU history to build the European internal market, extending majority voting to enact swathes of business and environmental regulation.

Yet by the end of her premiership in 1990, her party was as bitterly divided over EU integration as Labour had been.

Thatcher reluctantly accepted the pound’s entry into the European exchange rate mechanism, meant to limit its fluctuation against other EU currencies. But she vehemently opposed moves to give European workers some of the social rights she had dismantled at home, and her hostility to closer European integration led directly to her downfall.

Perhaps the most striking example of British negotiating hubris was when Prime Minister John Major declared “game, set and match for Britain” after securing the right to opt out of a European single currency at the 1991 Maastricht summit.

Major, whose premiership was blighted by rebellions by Conservative Eurosceptics, also kept Britain out of the Schengen zone of passport free travel and reserved the right to drop out of European cooperation on police and justice matters as well.

Major convinced himself that European monetary union would never happen despite the treaty. The idea, he said, had “all the quaintness of a rain dance and about the same potency”.

When it did happen, his successor Tony Blair wanted Britain to join the euro in the early 2000s but was thwarted by the opposition of his finance minister and of public opinion.

More recently under Cameron, London stayed out of a fiscal compact treaty after failing to veto it in 2011, and shunned a European banking union with a single supervisor and a common resolution mechanism for winding up failed banks.

Now he seeks to exempt Britain from the treaty goal of “ever closer union”, win more scope to deny migrant workers from the EU access to welfare or in-work benefits, and secure protection for London’s financial services industry from any attempt by the euro zone to impose tougher regulation against UK wishes.

Such a new settlement, if endorsed by voters in a referendum, would lay the EU issue to rest for a generation, Cameron has said. History suggests otherwise, especially since the result may be much closer than in 1975.

“What is certain is that unless there is a ‘Brexit’, the upcoming referendum, much as in 1975, will not settle the issues,” Emmanuel Mourlon-Druol, a visiting fellow at the Bruegel economic think-tank, wrote in an essay.

Additional reporting by Guy Faulconbridge; Writing by Paul Taylor; Editing by David Clarke