The UK and Italy: how interests can converge on EU issues

During a recent visit to London, the Italian Prime Minister spoke plainly and bluntly: European leaders underestimate the likelihood of a British exit from the European Union. “It’s a huge risk,” Enrico Letta said. “We have to prepare a discussion on trying to prevent this risk.”

The referendum on EU membership promised by British premier David Cameron, if he wins the next election, is still years away. The two sides of the British debate remain as distant and combative as ever, and public opinion is almost evenly split. If Mr. Cameron wants to successfully renegotiate the terms of his country’s relationship with Europe, and then convince his citizens it is in their interest to remain part of the bloc, he needs allies.

During two days of meetings in London, Mr. Letta emphasized the contribution of the UK in keeping the Union “open to the world”, “liberal” and “innovative”. Certain other EU countries – France, in particular – are reluctant to give in to British demands. Mr. Letta, however, seems to believe that Italy, and the EU as a whole, face greater danger if they ignore such demands. He offered an Anglo-Italian agenda that identifies areas of cooperation and common goals, but also issued a stern warning: “The crisis has shown that individual member states cannot go it alone. No member state, not even Germany, has the economic and political strength to exit the crisis with its own forces … Today, size matters again.”

He called for greater integration within the eurozone, starting with the elusive goal of a banking union and a mechanism to ensure timely intervention in case of a banking crisis. At the same time, and crucially for London, Mr. Letta urged fellow leaders to allow for more flexibility for members of the Union that do not share the single currency.

With its 500 million consumers and a combined GDP of 11 trillion pounds, the single market is viewed across the Channel as the greatest single benefit of the EU membership. An estimated 3.5 million jobs are linked, directly or indirectly, to the UK’s trade with other member states. Few think Britain would be better off outside the single market, though many euroskeptics think a participation in the European Free Trade Association would allow Britain to reap the benefits without the costs and limitations of full EU membership – like countries such as Norway and Switzerland do.

There remain differences between the Italian and British visions. Rome and London have typically held different attitudes toward European integration: Rome has been strongly supportive, at least before the crisis; London has been lukewarm at best, and at times openly hostile. Mr. Letta remains keen on strong central European institutions (“We need more Europe”, he told an audience of politicians, businessmen and academics at Chatham House),which runs counter to London’s long-held mistrust of Brussels’ powers. And the Italian Prime Minister’s call for a “new narrative” to solve the legitimacy crisis of the Union is likely going to be ignored in a country that maintains a merely cost-benefit approach toward the bloc.

At the heart of Mr. Cameron’s EU efforts is the repatriation of some powers from Brussels. According to a recent survey by polling consultancy Survation, when citizens were asked what areas they would most like to see returned to UK control, most responded immigration, criminal justice and employment laws. The same survey found that Britain is split over the broader issue of membership, with 51% in favor of an exit and 49% wanting to stay in.

When Mr. Cameron discussed shifting EU powers with Angela Merkel, the German leader, keen to prevent Britain from leaving, did not reject the possibility. Mr. Letta, whose country holds the rotating EU presidency in the second half of 2014, told the BBC that returning significant powers to London “can be possible, and it could be useful for us, too.”

Unlike a significant part of his own Tory party, Mr. Cameron wants Britain to remain in the Union, and hopes to lead the “stay in” side at the referendum, tentatively scheduled for the end of 2017. His government has begun publishing the first of 32 reports that will form the most comprehensive review of the UK’s 40-year relationship with the EU.

Meanwhile, the two camps are battling on the domestic front: a few days apart, a pro-EU manifesto launched this month by the group British Influence (which includes Lord Mandelson) said exiting the Union would be a “historic error,” while the Institute of Economics Affairs offered 100,000-euro prize for the best “Brexit” plan. Mr. Cameron’s own exit from power would shake the debate. But a recent poll gave him hope, showing that his Tory party had closed much of the gap with Labour, while the anti-EU, populist party UKIP, which had eroded some of the Conservatives’ support, had dropped in the polls after a surge in May.

An Anglo-Italian push by two leaders who, both at age 46, are among the youngest in the EU might prove useful for London. But much could happen before the next UK general election in 2015. The stability of Mr. Letta’s government raises doubts in London, given the history of unstable governments in Italy and the precarious coalition that makes up this administration. An early test could come with the European Parliament election in 2014, viewed as a measure of anti-EU sentiment, including in Britain where the UKIP – ironically for a party that despises Europe and its institutions – has traditionally performed well. Even closer at hand is the general election in September in Germany – upon which so much of Europe’s future and its prospects for returning to growth will depend.