Europe's no longer the PM's problem. The economy is

What will voters be worrying  about when they go to the polls in 2015, asks Andrew Grice. A clue: it won’t be Brussels

“We will let sleeping dogs lie,” David Cameron is said to have told senior European Commission figures as Leader of the Opposition.

He had no desire to re-open the Europe issue that had torn his party apart since the Thatcher era. “If you put two Conservatives in the same room, it does not take them long to fall out over Europe,” he said.

The Eurocrats were pleasantly surprised. They had feared they would soon be dealing with the most Eurosceptic British Prime Minister since Margaret Thatcher after Mr Cameron pulled his MEPs out of the European Parliament’s mainstream centre-right group (figurehead A Merkel) and joined a bunch of right-wing fruitcakes.

This weekend the same senior EU figures are bemused that the same Mr Cameron has given the sleeping dogs a 10,000-volt shock. His long-delayed speech on Europe was widely followed in Brussels. Although there were more nods than expected to the benefits of EU membership, his message was clear: if Britain does not get a special new deal from the EU by 2017, it will head for the exit. “This is blackmail,” said one Brussels insider.

Why, then, did the Prime Minister who wants his legacy to be the leader who reformed the EU so Britain can stay in, take a gamble which could leave him as the man who accidentally took us out? And why whet the appetite of the ravenous hounds in his own party by suggesting that a whole range of powers could be returned from the EU to the UK?

This speech took six months to formulate. Mr Cameron, the Chancellor George Osborne and the Foreign Secretary William Hague worked back from where they wanted to be at the 2015 election. They judged that, to calm the fractious Tory pack, they had to split off the hardliners who want to leave the EU from pragmatic Eurosceptics (as Mr Cameron regards himself) unhappy with the status quo but who would stay in if the UK got a better deal. They also needed to unite the Tories at the next election and reduce the threat from the UK Independence Party at next year’s European Parliament elections. The best way, they calculated, would be to promise an “in/out” referendum after 2015. The trick seems to have worked, at least in the short term. Some of the 81 Tory rebels who voted for a referendum last year say they will join Mr Cameron in voting Yes to remaining in the EU if he gets a good enough deal.

That is significant. But it is still a big “if”. Much of the closer integration in the eurozone can be achieved without the new EU treaty that would give Mr Cameron more clout in his renegotiation battle. Talks on a new treaty may start in two or three years. EU sources believe Britain would get some concessions – such as reforms to the working time directive, safeguards for the City of London and expansion of the single market in service industries. But they say Mr Cameron can forget his call to end the EU’s “ever-closer union” and a British opt-out from big areas like the social chapter of workers’ rights, seen as an integral part of the single market Mr Cameron supports.

The Prime Minister wooed EU leaders, particularly Angela Merkel, before his speech but Downing Street overspun the German Chancellor’s response that she was willing to talk about Britain’s wishes. “She wants the UK in for strategic power reasons to counterbalance the French, but not on the basis of a pick-and-mix Europe,” said one diplomat.

So the Tory dogs will sink their teeth into Mr Cameron if he urges a Yes vote in the referendum. Some will yap at his heels long before then. “We are going to have to put more flesh on the bones,” said one minister, admitting that Mr Cameron’s renegotiation goals were left vague.

Yet the long-awaited speech, when finally delivered, went as well as the PM could have hoped. The Tories are divided on EU membership but broadly united on a referendum. Conversely, Labour is broadly united on EU membership but split on a referendum. That worked to Mr Cameron’s advantage when Ed Miliband forgot the “never say never” bit of Labour’s referendum policy and implied in the Commons that Labour would never allow one.

The Tories are convinced that Labour’s refusal to “trust the people” will play well for them at the 2015 election. Next Wednesday, the Government has called a Commons debate on Europe to add to Labour’s discomfort.

But just because Mr Cameron has decided to “bang on about Europe,” doesn’t mean the whole country will see it as the top issue in 2015. Yesterday’s economic figures are a stark reminder of that. Perhaps next week’s Commons debate should be about the risk of a “triple-dip recession”. It’s not Europe, stupid – it’s the economy.

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