How is the EU getting on without Britain? Ask Mark Rutte and the Frugals

It has been fascinating to watch the first major European Council meeting in Brussels since Brexit took effect on January 31. For decades, the British were blamed for causing division and preventing progress towards “ever-closer union”. Now that the UK has left, albeit with a year’s transition period, we can no longer be blamed for disunity within the European Union. Our former partners will have to look elsewhere for a scapegoat.

So what has happened? The answer, in the words of an unnamed French diplomat, that “the Dutch have taken over the British seat”. Under their lanky and rather likeable leader, Mark Rutte, The Netherlands has assumed the lead of an awkward squad, known as “the Frugals”, who are fighting a rearguard action over a new €750 billion coronavirus fund, necessitated by the economic effects of the pandemic, that will mainly benefit the more profligate southern member states.

Mark Rutte and the Frugals sound like a Sixties rock band, but they are deadly serious. The new fund, championed by Emmanuel Macron and Angela Merkel, marks a step towards “eurobonds” — in other words, collective borrowing on the capital markets by the EU rather than member states. This would ultimately open the door to a power grab by Brussels at the expense of national governments.

The Frugals — Holland, Austria, Finland, Denmark and Sweden — are determined to stop the fund turning into yet another mechanism for handouts to poorer states. Before conceding the point of principle — that the EU can now raise its own funds rather than relying on its members —the Frugals want a leaner package with loans rather than handouts and many more conditions attached. Not only do they insist that, in return, “Club Med” countries such as Spain, Italy and Greece reform their labour markets — which the Italian Prime Minister Giuseppe Conte described as “blackmail” — but they also want the Central Europeans to commit more explicitly to uphold the rule of law.

The latter proposal infuriated Viktor Orbàn, the Hungarian Prime Minister, who found himself targeted for allegedly exploiting the crisis to curtail democracy and judicial independence in his country. “I don’t know what is the personal reason for the Dutch Prime Minister to hate me or Hungary,” Orbàn fumed, “but he’s attacking [me] so harshly and making it very clear that because Hungary, in his opinion, does not respect the rule of law it must be punished financially.” Orbàn, in turn, rallied his allies, Poland and Slovenia, to resist a “rule of law” provision.

By the time the architects of the rescue fund, Macron and Merkel, left the late night meeting, they were exasperated by the absence of solidarity. “They ran off in a bad mood,” Rutte remarked. Hopes that what threatens to become the worst economic crisis in the EU’s history would bring about a show of unity have been dashed. Even if the new fund is agreed, the divisions that have been exposed seem irreconcilable.

For the EU, Brexit is already history. The UK is no longer a convenient whipping boy. While some EU members wish to go on punishing the British indefinitely, most have other agendas. In the demonology of the European project, Perfidious Albion has been replaced by the Flying Dutchman.

The post-pandemic world is proving to be a tough, unforgiving place. The two superpowers, China and the United States, are throwing their weight around and demanding that smaller players take sides. For security and intelligence purposes, Britain is fortunate to belong to the “Five Eyes” Anglophone group that includes the US, Canada, Australia and New Zealand — but we are also still very much a European country, even if not an EU one. This makes the UK geopolitically unique. We can still play our traditional transatlantic mediating role, but we can also offer moral leadership to the West — as we have done, for example, on Hong Kong.

The unedifying spectacle of the Brussels summit is a reminder of why Brexit was inevitable. The tensions between Europe and the UK were never really about populism or the British press. They were about what nation states regard as their vital national interests. For the Dutch, like other Continental peoples, an issue such as the coronavirus solidarity fund is such an interest.

The British, since Brexit, have reverted to a very different world view, politically and psychologically. As we see it, we can look after ourselves financially and expect others to do the same. Solidarity funds and the like signify little to us. We care more about the terms of trade, security, culture and migration, not only with our EU neighbours, but also those with whom we share equally strong family connections around the world.

The British are better off outside the Brussels conference chamber — and the EU is probably glad of it too. As Churchill predicted, Britain was always going to be “ with Europe, but not of it”. Now that we are no longer rubbing each other up the wrong way, perhaps we can rub along together rather well.