Prime minister David Cameron is under pressure from his own party’s euro skeptics to hold a national referendum on the country’s membership of the European Union. Many believe that the U.K. economy is being hampered by unnecessary rules which are imposed by Brussels. Evidently, some conservative MPs are demanding to loosen the existing ties with the EU bloc to a relationship based on trade partnership. At the same time, Cameron is also resisting a push by many member states like France and Germany to grant central authorities in Brussels, in particular greater powers over financial and legal affairs.
Mr. Cameron seems to believe that the U.K.’s best interests are better served by staying in the EU, so that his country can have access to the European single market, and also have a say in how it is governed. For the record, the British prime minister is due to make a speech in mid-January to outline his position about this politically divisive matter. Last Wednesday, he pledged to his party that he will get the changes which suit Britain. Unfortunately, this issue may have also fueled talk that the U.K. could eventually withdraw from the EU.
In this light, ten high-profile business leaders warned their PM not to seek a wholesale renegotiation of the U.K.’s membership of the European Union. In a letter published last Wednesday in the Financial Times, they argued that Britain’s membership of the EU is being put at risk, and that such a move is creating damaging uncertainty for British business. In their letter, the outspoken executives admitted that Mr. Cameron was right to dismiss the idea of emulating Norway or Switzerland, which are enjoying a trading relationship with the EU. Alas, they have no say in the rules of the European single market. The businessmen maintained there was an urgent need for EU reform in areas such as employment legislation and EU budgets. They went on to suggest that that such a plan could fail, pushing the U.K. out of the EU and hurting business in the process.
Of course, membership in the EU has given the U.K. access to the massive European market and a say in how the region should govern itself and run its financial markets. Britain has also benefited from EU funds to build its infrastructure such as broadband networks to keep up with its neighbours. Arguably, the recent turbulent economic times have inevitably forced the 17 Eurozone countries to move ever closer together, creating a more powerful union that could leave non-euro members like Britain with less negotiating power.