On Wednesday, UK Prime Minister, David Cameron, spoke at Bloomberg’s City of London headquarters and promised an in-out referendum for the UK’s membership in the EU by the end of 2017. Cameron said if he wins 2015’s general election, he will demand the repatriation of a series of powers to Britain and subsequently conduct a vote, reported Bloomberg.

David Cameron

Here are some highlights from PM Cameron’s speech,:

Deliver prosperity, retain support

  • Cameron started by saying he wanted to speak with urgency and frankness about the European Union and how it must change – both to deliver prosperity and to retain the support of its peoples. I speak as British Prime Minister with a positive vision for the future of the European Union. A future in which Britain wants, and should want, to play a committed and active part.

Three Challenges

  • First, the problems in the Eurozone are driving fundamental change in Europe.
  • Second, there is a crisis of European competitiveness, as other nations across the world soar ahead.
  • Third, there is a gap between the EU and its citizens, which has grown dramatically in recent years. And which represents a lack of democratic accountability and consent that is – yes – felt particularly acutely in Britain.
  • If we don’t address these challenges, the danger is that Europe will fail and the British people will drift towards the exit.
  • Britain is not in the single currency, and we’re not going to be. But we all need the Eurozone to have the right governance and structures to secure a successful currency for the long term.
  • Cameron added, while there are some countries within the EU which are doing pretty well. Taken as a whole, Europe’s share of the world’s output is projected to fall by almost a third in the next two decades. This is the competitiveness challenge – and much of our weakness in meeting it is self-inflicted.
  • The biggest danger to the European Union comes not from those who advocate change, but from those who denounce new thinking as heresy. In its long history, Europe has had experiences  with ‘heretics’ who turned out to have a point.

21st Century European Union

  • Cameron’s vision for a new European Union, fit for the 21st Century, is built on five principles.The first is competitiveness. At the core of the European Union must be, as it is now, the single market. Britain is at the heart of that Single Market, and must remain so.
  • The second is flexibility. We need a structure that can accommodate the diversity of its members – North, South, East, West, large, small, old and new. Some of whom are contemplating much closer economic and political integration. And many others, including Britain, who would never embrace that goal.
  • The third principle is that power must be able to flow back to Member States, not just away from them. This was promised by European Leaders at Laeken a decade ago. It was put in the Treaty. But the promise has never really been fulfilled. We need to implement this principle properly.
  • My fourth principle is democratic accountability: we need to have a bigger and more significant role for national parliaments. There is not, in my view, a single European demos. It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU.
  • The fifth principle is fairness: whatever new arrangements are enacted for the Eurozone, they must work fairly for those inside it and out.That will be of particular importance to Britain. As I have said, we will not join the single currency. But there is no overwhelming economic reason why the single currency and the single market should share the same boundary, any more than the single market and Schengen.

Real Choice

  • Cameron believes the best way to do this will be in a new Treaty, so he adds his voice to those who are already calling for this. His strong preference is to enact these changes for the entire EU, not just for Britain.
  • If there is no appetite for a new Treaty for us all then of course Britain should be ready to address the changes we need in a negotiation with our European partners.
  • The next Conservative Manifesto in 2015 will ask for a mandate from the British people for a Conservative Government to negotiate a new settlement with our European partners in the next Parliament. It will be a relationship with the Single Market at its heart.
  • When we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice. To stay in the EU on these new terms; or come out altogether. It will be an in-out referendum.
  • Our participation in the single market, and our ability to help set its rules is the principal reason for our membership of the EU.
  • Legislation will be drafted before the next election. And if a Conservative Government is elected we will introduce the enabling legislation immediately and pass it by the end of that year. And we will complete this negotiation and hold this referendum within the first half of the next parliament.
  • The fact is that if you join an organisation like the European Union, there are rules.You will not always get what you want. But that does not mean we should leave – not if the benefits of staying and working together are greater.
  • We would have to think carefully too about the impact on our influence at the top table of international affairs. There is no doubt that we are more powerful in Washington, in Beijing, in Delhi because we are a powerful player in the European Union.

So how was Cameron’s speech received? According to Reuters, the sterling dropped to its lowest level in almost five months against the dollar on Wednesday, while the prime minister spoke.

He also received a chilly response from EU partners. French Foreign Minister, Laurent Fabius, commented, “If Britain wants to leave Europe we will roll out the red carpet for you…” This echoes Cameron who had previously used similar comments to invite wealthy Frenchmen alienated by high taxes to come and move to Britain.

German Foreign Minister, Guido Westerwelle, said his country wanted Britain to stay as a full EU member, but London could not think it can pick and choose aspects of membership that it desired.

And from Davos, business leaders didn’t support the speech. Martin Sorrell, chief executive of advertising giant WPP said, “Having a referendum creates more uncertainty and we don’t need that. This is a political decision. This is not an economic decision. This isn’t good news. You added another reason why people will postpone investment decisions.”