Even Before Any 'Brexit' Vote, UK Losing Sway In Europe

BRUSSELS (Reuters) - After decades of punching above its weight in Europe, Britain's influence in the European Union is waning, even before we know whether a promised referendum on "Brexit" will go ahead.

London's partners are keen to keep Britain in the 28-nation bloc, but not at any price.

They value its open economy, international outlook, military prowess, democratic culture and able civil servants, even though it remains semi-detached outside the euro currency, the Schengen open border area and much police and judicial cooperation, and with a permanent rebate on its EU budget contribution.

But there is growing frustration in Brussels, Berlin and Paris at the lack of clarity over Prime Minister David Cameron's goals if he is re-elected on May 7 and seeks to renegotiate Britain's EU membership and put the result to a vote in 2017.

"The real danger is that they raise demands that cannot be achieved with their partners," said a person familiar with German Chancellor Angela Merkel's thinking.

A belief in Cameron's entourage that Merkel will do whatever it takes to keep Britain on board, to balance out a more statist France, may be a misjudgment. He has twice ended up isolated by making that assumption - when he tried to veto an EU fiscal pact in 2011, and when he sought to block Jean-Claude Juncker as European Commission president last year.

Long-time British allies such as Poland and other eastern Europeans have been alienated by Cameron's anti-migration rhetoric. Others are loath to ally themselves in EU bargaining to a country that may not be there to repay a favor.

Cameron himself, under pressure from the anti-EU UK Independence Party and Eurosceptics in his own Conservative party, has been deliberately vague about what changes he seeks.

In a campaign television interview last week, he said: "The problem with the European Union at the moment, it has got some good aspects but too many things that drive people mad.

"People see that it is trying to become too much of a state rather than an organization, it is trying to take too much power."

LACK OF SUPPORT

When the prime minister called last year for change in the EU treaty to curb free movement of EU migrants, Merkel and other leaders quickly told him that was a non-starter. No one is ready to plunge into a divisive treaty revision that would entail risky plebiscites in states such as France, Ireland and Denmark.

Some EU diplomats are hoping the election result removes the referendum threat. The opposition Labour party has said it would not hold one. But even if it forms a government, uncertainty over Britain's place in Europe is unlikely to fade for long.

"The UK has had enormous influence on EU policies, but the UK is losing influence," said Poul Skytte Christoffersen, a veteran Anglophile former Danish ambassador to the EU.

"Nobody wants to join a coalition with the UK because you don't know where that is leading. The lack of influence will grow as long as you have this lack of clarity. The fact is, this will be a long time," he said.

He said Denmark, the Nordic countries and the Netherlands, which shared Britain's attachment to liberal economics and free trade, were deeply worried at its waning influence.

Long over-represented in the upper echelons of the executive European Commission, Britons are a dwindling band. There are now many more German than British officials in key positions.

Some 45 percent of British-born Commission staff are aged 55 and over, heading towards retirement, and Britons make up less than 2 perce8nt of new recruits. They are a wasting asset with uncertain career prospects.

Yet the EU carries a British imprint, even through the United Kingdom only joined at the third attempt in 1973 after the six-nation European Economic Community had been shaped by France and Germany in the 1957 Treaty of Rome.

"The EU today bears strong signs of British design and as such serves Britain’s interests well," said Michael Leigh, a British former Commission director-general. "The United Kingdom is largely responsible for the EU's predominantly liberal ethos and present geopolitical dimensions."

The single market for goods and services was built with firm backing from then-British prime minister Margaret Thatcher in the 1980s, and Britain was a driver of the EU's eastward enlargement after the fall of the Berlin Wall. London has long set the EU's free-trade agenda and fought protectionism.

SLIPPERY SLOPE

Yet Britain's politicians, egged on by a predominantly Eurosceptic media, may be about to set the country on a slippery slope to leaving the EU, according to Denis MacShane, a former Labour minister of state for Europe.

In "Brexit - how Britain will leave Europe", MacShane argues that Cameron could be forced into setting unachievable negotiation goals to hold his party together. An EU referendum would be a chance for Britons to express their anger with the political establishment, goaded by a largely anti-EU media.

"If they get a referendum they can give vent to their anti-politics mood by voting against whatever the London elites tell them to do," he writes.

EU supporters lack a charismatic leader capable of tangling with UKIP's man-of-the-people Nigel Farage or Eurosceptic Conservative London mayor Boris Johnson. Many of the leading pro-Europeans are of retirement age, and big business leaders who back the EU are not widely popular, MacShane observes.

Mandated by Cameron's center-right coalition government, British civil servants undertook an unprecedented review of EU competences, producing 32 volumes with 3,000 pages of evidence on the division of powers between Brussels and member states.

The dispassionate findings were trickled out without fanfare because the divided coalition parties could not agree to draw any policy conclusions from the exercise.

A review by the Brussels-based Centre for European Policy Studies, published this month as "Britain's Future in Europe", concluded: "Overall, the evidence supports a common-sense view that British interests are best served by continuing membership of the European Union, combined with pushing ahead with reform processes, while retaining its important opt-outs."

There was no strong case for repatriating powers from Brussels or negotiating more opt-outs, it said. Reforms to reduce red tape were under way and would benefit from UK help.

Whether such a pragmatic conclusion would prevail over emotional identity politics in a referendum is far from certain.

(Writing by Paul Taylor; Editing by Kevin Liffey)