Back to Maastricht with a vengeance: Just when you thought it safe to go back in the water . . .

BRITAIN is going to pull out of Europe. The Conservative Party is split. Plots are afoot in Westminster, Whitehall and Brussels. Headlines in the past week had a certain familiarity, echoing the furious row that has dominated British and European politics for two years.

Maastricht is back. Just when you thought it was safe to go back into the water, suddenly that curious mixture of theology, acronyms and bile, which in Britain constitutes the debate over Europe, has returned to the surface.

And like almost everything else that crops up in British politics these days, it has turned out nasty for John Major. The Eurosceptics are back on the warpath, ministers appear at odds with each other and the Tory press is making it worse.

The day after the Prime Minister and Chancellor Helmut Kohl publicly stressed their 'common approach' to European issues, the Sun boldly said that Mr Major was 'ready to put Britain's membership of the European Union on the line' by turning the next general election into a referendum on the issue.

It looked like another well- judged spanner in the works of Mr Major's cautious European election strategy, and although that particular story was denied, most Conservatives assume that other articles last week, suggesting that Britain might opt permanently into a second tier of Europe, had originated with senior Eurosceptic politicians.

'It is coming from sources close to the Cabinet,' one backbencher said darkly. 'You have only to look at the geography of this place. When certain ministers from one part of the country start talking to certain MPs from another, it's not about local planning applications.' This is not just another piece of Tory leadership jostling, nor is it merely a banana skin. Important changes are taking place, in Britain and in Europe.

At home, Conservative MPs believe that there has been a profound shift in public opinion. One middle-of-the-road Tory said: 'There is overwhelming hostility to Europe. People come up to you at meetings and say, 'This is not what I voted for in the referendum in 1975. I wanted an economic community not ever closer union.' ' A Cabinet minister added: 'There is a substantial move in the public mood away from support for centralised European institutions.' In other words, there are now votes in Euroscepticism.

Meanwhile in Europe, the process of long-term change is under way again. After Maastricht there was a long period when it seemed all but dead, but in the past six weeks something has begun to stir.

First, monetary union is firmly back on the agenda. It had dropped off after the havoc in the European Monetary System, the collapse of growth and the widening of budget deficits that seemed to foreclose prospects for a single currency.

But the European Commission has revised upwards its forecasts of economic growth for France and Germany, and revised down its estimates of the public sector deficits in Europe last year. And the financial markets show a remarkable convergence in long-term European interest rates.

'Six months ago, if you looked at the prospects for monetary union in 1997, you would have had to say no,' says Graham Bishop of Salomon Brothers, the investment bank. 'Now the answer would be: maybe.' Henning Christophersen, the EU's economics commissioner, said last week that a majority of EU members would be ready for monetary union by 1998. Britain has an opt-out from this, of course. But even this year, fundamental choices have to be made on the road to monetary union that will affect the whole European economy. 'And we cannot opt out of that,' a London banker said.

Second, discussion has started among, and within, governments about the prospects for the revision of the EU treaty planned for 1996. This Intergovernmental Conference is unlikely to be the simple 'pit- stop' some hoped for. Much debate is likely about the workings of the EU and its decision- making procedures.

The biggest single issue is the enlargement of the EU, to include some if not all of the states of the East. This demands a far-reaching examination of the way the EU operates, and some of this work will have to be done by 1996.

But the blunt statements by Eurosceptics that 1996 is going to be a take-it-or-leave-it plunge into federalism are very wide of the mark, European diplomats say. Indeed, there is likely to be a shift from the monolithic idea of political integration implied in Maastricht towards a more pragmatic approach: variable geometry, in the jargon, meaning that groups of states participate in different aspects of integration to different degrees.

There is already a British agenda for 1996. The functioning of the presidency system is being re-examined; so is the way that the commission is organised, and the role of the Council of Ministers. But Britain wants to keep essentially to issues of governance, not principles. London is intent on seeing new approaches to the Common Agricultural Policy and the present system of regional transfers, but this is likely to come later - in 1997.

It is to this that British officials point when rumours of withdrawal start in London. British factional infighting has already helped to link enlargement to the much wider debate that will open up over the next two years.

The intense and furious debate triggered by the row over qualified majority voting in March has already begun one of the arguments that was bound to crop up in 1996. On that occasion, the Prime Minister was generally deemed to have picked a fight with Europe, then backed down, leaving the sceptics steaming.

We will have another glimpse into the future this week when the European Parliament considers the membership deals for Sweden, Finland, Austria and Norway. This debate will foreshadow both 1996 and the discussions of central European membership.

It is possible that withdrawal, or at least permanent existence in a second tier, will come to be seen as a mainstream British opinion by the other EU members. But for Britain to advertise in advance that it sees membership of an 'outer core' as desirable 'is defeatism of the worst kind,' one pro-European Conservative explained. 'It prejudges the debate, and leaves the door open for those who want Britain's influence marginalised,' he said.

Perhaps the most disturbing lesson the European institutions will draw is that they are in for a very rocky five years in their dealings with member- state governments.

The factional fighting of the British right is far from unique. In France, Germany and Italy, too, the centre and centre-right are locked in similar spats. But the rise of like-minded movements elsewhere does not mean an end to the clash of ideologies over Europe.

Two remarks illustrate the gap. 'Our belief is in a free- trading, decentralised, outward-looking Europe,' Douglas Hurd said last week. 'We do not want to be a de luxe free- trading area,' countered Rudolf Scharping, leader of Germany's Social Democrats and candidate for chancellor in the October elections. In European eyes, just as in many British eyes, the argument over Britain's involvement in Europe has not been settled.

(Photograph omitted)

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