President Obama and Brexit.

In an open letter to President Obama, five MPs and MEP Nigel Farage have called on the US President to stay out of the EU debate. “With so much at stake, they write, it is imperative that the question of exiting the European Union is not one answered by foreign politicians or outside interests, but rather by the British people who must ultimately live with change or the status quo,” the letter said.(

Responding in The Times, Daniel Finkelstein has written that  trying to silence Obama over Brexit is absurd. “The US President, he writes is bound to have a view on such a central plank of US European policy. “America’s postwar protection of Europe makes it not only the president’s right to speak out, but his responsibility”.” Like every one of his predecessors, he wouldn’t want us to leave the EU.”

The US was present at the creation of the EU.

The US has a special stake in the European “construction”,  as the French call it. The original design was called the Organisation of European Economic Cooperation, overseeing the distribution  of Marshall Plan funds. The US provided the funds, and encouraged the Europeans to manage the distribution.

That was in 1948. In 1949, the North Atlantic Alliance was created to shore up European security, but the US Congress insisted on Article 5, whereby each country in the alliance had the discretion not to come to the support of an ally. In fact, over the years of the cold war, and into the 1990s, the US did chose to come to Europe’s support.

Without US support, it is doubtful that the European movement would ever have been launched. Secretary of State Dean Acheson and Jean Monnet, the inspirer of European integration, co operated to promote the European Coal and Steel Community. In Dean Acheson’s perspective, it was important to draw West Germany into the western defence orbit through some deal with France. In Jean Monnet’s view, here was an opportunity to lay the ground work for a supranational Europe, not as Churchill often proposed  a Europe of cooperation between its states and nations.

Monnet’s central preoccupation was to create a European order on a US federal model, and not on the national states, which he considered the main sources of Europe’s wars. Both Monnet and successive US governments considered that Europe’s problem is its fragmentation into a host of competing sovereignties, whose territories are far too small to be able to manage the multiple political and economic interdependencies of the modern world.

There were two major problems: de Gaulle and Churchill.  Both men had stood in the war against Hitler’s attempt to overcome Europe’s political fragmentation by establishing German hegemony, predicated on a supranational ideology of racism. There was little reason to believe they would support the idea of transforming their countries from sovereigns to provinces in a European superstate.

De Gaulle and l’Europe.

In his BBC broadcast in June 1940, de Gaulle called for resistance to German domination and France’s occupation. A few days previously, the National Assembly had voted full powers to Marshal Pétain, whose policy was to make peace with Hitler.  Robert Schuman, considered by EU supporters as a founding father,  voted for Pétain.  Not surprisingly, when he tried to be nominated in Alsace to the new National Assembly of the  Fourth Republic,  Alsace, his home province, would not hear of it.

De Gaulle based all his policy during and after the war on national resistance to any doctrine- supranational marxism, supranational Atanticism or supranational Europeanism- which would undermine the constitutional states, and particularly the constitutional state of France. France’s revival, and a European order amenable to France’s interests were his twin objectives. Such an order, in de Gaulle’s mind, included alliance with the United States, but also with Russia as France’s indispensable ally to prevent the re-emergence of Germany.

France had, and still has,  a central preoccupation: Germany. How could a European order be established on the basis of nation states, without a united Germany once again becoming predominant?

De Gaulle’s policies of the 1960s attempted to reconcile national independence with closer relations with West Germany by creating a French western European sphere of influence. He failed. By the end of the decade, Germany was once again in the ascendant, most evidently in the form of the rise of the DM. De Gaulle stepped down in 1969, and France, with the support of Luxemburg, then of Italy, launched the multi decade campaign to create the Euro.

The idea was for France to co manage the common currency, and not have its economic policies dictated by an over mighty Bundesbank. This involved edging away from de Gaulle’s idea of a Europe of co-operating states to a more federal Europe. Hence President Giscard d’Estaing’s partial recognition of the primacy of EU law over France’s ordinary courts; direct elections to the European Parliament; and  the attempted revival at monetary co-operation with Germany.

President Mitterrand  carried the policy forward by backing the EU’s internal market policy, increasing the powers of the EU institutions, and in particularly pushing through the single currency, against stiff Bundesbank resistance.  German unity came in a rush in 1990, and in effect, spelt the end of French leadership in the EU. From then on out, leadership in the EU would be at best co-operation between the unequal partners of Berlin and Paris.

In 2010, Chancellor Merkel tore aside the veil, and told President Sarkozy, and the Greeks in no uncertain terms, that Europe had to take its marching orders from Berlin.  For all the institutional building that had been going on for sixty years, Germany was once again on top, and Europe was once again in trouble.

The UK and the EU.

Churchill was the other problem. As the champion of the UK’s centuries old parliamentary constitution, when Monnet put forward his proposal for a supra national design of Europe, Churchill made quite clear that this was incompatible with UK sovereignty. In the UK,  the Crown  in parliament is sovereign, and that is not an abstract principle, but simply the cornerstone of the UK political system whereby voters vote in their government to govern, and vote them out if they do not match up to expectations.

The paradox in UK relations with the EU is not, as so often repeated, that the UK is “an awkward partner”, in other words, dragging its feet in resistance to a supranational Europe. Whitehall officially subscribes to by far the most supranational agenda of all major EU states. The 1972 Act of Accession is unequivocal: the Crown in parliament binds itself to recognise the primacy of EU law.

This is not the Europe of cooperating states and nations which Churchill wanted, though Prime Minister Heath, during the parliamentary debates of 1971,  invoked Churchill  in his own cause. Heath signed the UK up to a European superstate at the Paris summit of October 1972, where the nine heads of government subscribed to a common vision of creating a single European sovereign for economic, monetary and political affairs by 1980.

The UK idea of Europe, as laid down in the 1972 Act of Accession, is for a supranational Europe, with strong central powers exercising “pooled sovereignty” in the joint interest of member states, and aiming at a single internal market, comparable in size to that of the US, with a single currency, a common foreign policy, and eventually a common security policy. Such a British imagined EU would be the European pillar of a strengthened Atlantic alliance.

The Paris summit project died almost as soon as it was launched. The attempt to manage a joint floating of European currencies against the dollar came to a quick end when the German Finance Minister, Helmut Schmidt, engineered the floating of the DM on world markets. At the same time, the French Communists, closely linked to Moscow, entered a joint Programme of the Left with the Socialists and Left radicals. Its guiding idea was to achieve extensive nationalisations, and to promote what the Soviet leader, Leonid Breschnev, called “peaceful coexistence” across Europe-the prosecution of class war short of nuclear exchange.

Whitehall’s Achilles heal.

The Paris summit ideal died a quick death, but the UK government’s official view of the objective of EU integration has not. It is scarcely an exaggeration to state that the UK is by far the most supranational of all major states. Both Germany and France, like the US in Clause 5 of the Atlantic Treaty, keep a reserved domain of sovereignty, in other words of the ability to say No in international relations. Unlike Germany and France, the UK, in matters relating to the EU, the UK does not. What is decided in “Brussels” has direct effect in the UK, without appeal, amendment, let alone rejection.

So how come that the UK has this reputation of being “awkward”? The answer is simple: Whitehall has never sold its closet idea of European supranationalism to the UK voting public. The UK voting public does not enthuse about supranationalism, most importantly because it does not vote in parliamentary elections for the people in “Brussels” who make a growing body of laws that take direct effect in the UK.

The British Social Attitudes Survey from 1993 to 2014 ask five questions: what should Britain’s long term policy be regarding the EU: leave:  reduce its powers; stay the same; increase powers; work for a single EU government? The advocates of a single government fall from under 10% in 1993 to under 5% end 2014. Those in favour of increasing EU powers rose to 27% of the responses in the early 1990s-the height of the pro-EU wave in the UK-to 10% end 2014. In other words, the survey indicates that about 15% of the UK public backs the Whitehall view. That makes for 85% who do not.

End 2014, 25% of the respondents wanted to leave; those wanting the EU’s powers to stay the same were at 15%; those wanting to reduce EU powers  were 38%. The UK public, it maybe said without risk of controversy, is for close cooperation with European neighbours, and is reluctantly willing to accept a minimalist supranational component. Overwhelmingly, though, the British public does not buy into Whitehall’s prospectus.

The ever closer union campaign.

In the EU,including in the UK,  the the supranationalists have campaigned relentlessly for “ever closer union”. In the UK, the Great and the Good clamoured for the UK to join the exchange rate mechanism in 1990, despite the devastating impact on the UK domestic economy, and in order to be able to participate in the negotiations on monetary union, leading to the Maastricht Treaty of 1992.

In the UK, the institutional bases of the Whitehall EU vision are variously: the BBC; the Financial Times; the Foreign and Commonwealth office; key members of the London financial markets, British or foreign; multinational corporations based in the UK in order to service the continental markets; the leaders of all political parties, whatever they may have said on their way to the top.

On the continent, the champion of “ever closer union” has been Germany, with support in other states. The German condition for agreeing to Maastricht was that a single currency had to be flanked by a single EU polity. In other words, that the EU had to gave supranational powers and take on a federal form. Germany did not get what it asked.

A European Constitution was elaborated under the leadership of former President Giscard d’Estaing, in the European constitutional convention of 2002 to 2004. The Constitution proposed quite clearly that the Constitution and the judgements of the European Court of Justice would be the ultimate law of the EU, overriding national laws and parliaments.

The Constitution was ratified by the parliaments of 18 member states but voted down by the French and Dutch electorates in national referenda in 2005. On the implicit assumption that the majority of member states had voted in favour,  the advocates of “ever closer union” rejigged the constitution as the Lisbon Treaty, and the supremacy clause was smuggled into an annex. But the annex had to recognise that the juridical foundations for this claim could be found in no Treaty. The EU claims to supranational authority have mud feet.

The 1972 Act of Accession is the bedrock of ECJ claims to primacy in the EU.

So where is the foundation of the ECJ’s continued claim to primacy? The answer is in the 1972 Act of Accession of the UK to the EEC. Section 2.1. states categorically that the judgements of the ECJ have primacy over UK national courts. In short, the ECJ is the UK’s supreme court for matters relating to the EU, and these are forever expanding.

This is definitely not the case of the German Constitutional Court, which in its judgement on the Lisbon Treaty, states categorically that the EU is no more than an alliance of sovereign states and is in no way a constitution overriding the German Basic Law. The Court adds that were such a European constitution to be drawn up, Germany would have to call a German constitutional convention.

All other supreme courts in the EU, and they take a variety of forms, retain a sovereign space of ambiguity in their relations with the ECJ. As I have pointed out in this blog, the primacy claims of the ECJ are a contested space. The paper to consult on this is  Franz C. Mayer, The European Constitution and the Courts: Adjudicating European Constitutional law in a multilevel system”,

The reason is simple: there is no European electorate. There are national electorates, and as poll after poll clearly shows without any room for ambiguity whatsoever, their loyalty goes first and foremost to their home states.

The UK, the US, and a two pillar Atlantic alliance.

So where does this leave us on the matter of President Obama’s forthcoming visit to the UK? Given the reality of Europe as it, the UK is a vital, perhaps the vital piece which keeps the EU construct afloat. This is not the usual view: the usual view is that the EU is driven by the Franco-German “tandem”, as it used to be called. Since 2010, the tandem has been replaced by German hegemony. And the German public is much less sympathetic to the European idea than it was in 1990.

In his best selling book, The Sleepwalkers: How Europe Went to War in 1914, Christopher Clarke writes in his last chapter that the events of 2010 illustrate that for all the institutional creativity that has gone on since 1945, the underlying structure of Europe in 2010 was, and remains, similar to that of 1914. So, Clarke observes, does the pattern of responses to the challenges of managing European interdependence.

The ongoing US Presidential election campaign illustrates a further point: the Europeans have in effect demilitarised, while the US public is fed up providing a security subsidy to a rich EU. What is more, the US public that votes for radical solutions is not enamoured with free trade. The US electorate is giving an unambiguous signal to “Washington DC”, the US equivalent of the EU’s “Brussels”, that business cannot carry on as usual. And usual means the perpetuation of the political structure originally set up in the late 1940s, and that has underpinned the Atlantic alliance ever since.

Obama, Europe and the UK

Daniel Finkelstein is quite correct to argue that there is no sense in asking the President not to give voice to the US interest in what has been a central plank of US foreign policy since the days of President Truman. For all the talk of the “pivot” to Asia, by far the largest targets for mutual inward investment of the US and the EU are each others markets. In Asia, US alliances are bilateral; in the Atlantic area, they are multilateral as well.

It is most likely that Obama wants to perpetuate the US–UK alliance(for all the nonsense that has been printed in the UK about Obama being the most anti-UK President ever). The UK remains instinctively Atlanticist, which is not what one could say with too much confidence about either France or present-day Germany. Furthermore, in the absence of a European Constitution unequivocally establishing the EU as sovereign, the only extant legal foundation of EU supranationalism is the 1972 UK Act of Accession. This is the bedrock of Atlantic and EU policy.

Unfortunately, it has an Achilles heal: the UK electorate. If Obama endorses,  in his expected speech on the UK, the EU and the Atlantic alliance, the Whitehall view on a supranational  EU, he in effect states that the UK electorate has to lump it, and live with a neutered constitution. The UK may be the Mother of Parliaments, and the founder of a galaxy of successful and politically independent countries, but its future is to be politically neutered.

This is an impossible demand to make of a country. No friendly ally could ever possibly propose that a country abandon its sovereignty for the benefit of the alliance. Were it to do so, the country would not be an ally, but a client. In particular, for the UK, it means that the UK vote to become a province in a supranational Europe.

I doubt very much that President Obama would advocate such a thing.  But this is what Whitehall has pursued through thick and thin from the time of the Heath government on. The result has been the emasculation of British constitutional democracy, the creation of a large manufacturing internal market, the primacy of Germany, the subordination of France, mass unemployment on a scale unrivalled since the 1930s and the attempt to create a US of Europe without the consent of its peoples.

My proposal.

My proposal is quite different. It is still in the power of Prime Minister Cameron to alter the language of the 1972 Act of Accession, restating that the Crown in parliament is sovereign. Were this to be done, Cameron would likely lead a massive Remain victory in the referendum.

Why? because the UK public favours a Europe of co-operating states, and not a Europe identified all to widely with a faceless and unaccountable bureaucracy, called “Brussels”, and that takes its orders on all major subjects from currency to the movement of peoples from Berlin.

By re asserting in a revision of the 1972 Act that the Crown in parliament is sovereign,  the UK government would be stating in no uncertain terms that its stands four square in favour of a Europe of cooperating states, with cooperation rooted in the consent provided by parliamentary procedures. There would be no need to withdraw from the EU. Quite the contrary, the UK would be stating that a supranational Europe runs against the European grain, and that an alternative is available, even urgent, and that the UK is the leader of that alternative.

The reluctant leader of a more federal Europe is Germany, reluctant because federalism is no longer in its interest. It is in its interest to keep the currency, and German exports ever more undervalued. But that is in effect wrapping a nationalist preference in federal or supranational clothing. It is not sustainable.

Nor is it in Germany’s interest to become a province in a European superstate, where the majority of smaller, poorer or simply greedy  provinces gang up on supposedly rich Germany to get it to transfer funds to them. The German public is not a turkey, voting for Christmas.

But nor is the UK advised to stay in an EU where France and Germany push through whatever proposals fit their joint preferences but do not tally with British interests. The UK has to say: No. And the only Europe in which  it can effectively say no is a Europe of states.

That means one thing: the UK has to stay In the EU, and militate for a Europe of cooperating states, with minimalist federal characteristics. By stating the terms of UK membership of the EU and staying In, the UK is saying that all prior, present or future EU policies are subject to review, amendment and rejection by the Crown in parliament.

In doing this, it should be noted that the UK is doing no more than what Germany already does. By coming out of the supranationalist closet, and admitting that the UK is for a Europe of states, there is the prospect of  a functioning British-German alliance, that could help to unravel the disaster into which the federalists and supranationalists have led Europe.

There would be trouble a-plenty ahead with the dwindling band of “ever closer union” supporters on the continent and in the UK. But that is the price of governing.

If Cameron dodges this challenge, he aligns himself with the supranationalists, those who militate for the UK to be a non self governing province of a European empire. That is most definitely not in any recognisable US interest, President Obama please note.





About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) ( His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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