Davos Diary: Europe Fears ‘Brexit’ But Not At ‘Any Price’

A parade of European leaders took the stage Thursday at the World Economic Forum to plead with the United Kingdom to stay in the European Union. British Prime Minister David Cameron’s response? We’ll wait and see.

Throughout the day, the so-called “Brexit,” or the U.K. referendum to leave its European partners, dominated conversation at Davos. No vote has been scheduled, and Cameron said he is “not in a hurry” to do so. But the very prospect of Britain leaving was enough to prompt numerous calls for it to remain a part of the EU, even if it doesn’t use the euro.

To keep his country in the union, Cameron has demanded a reform package from Brussels that would end so-called “benefit tourism.” The current system allows EU members to come to the U.K. and immediately claim welfare benefits; Cameron wants them to wait for four years to be eligible. The new package would assure Britain would never have to contribute to bailouts like the one given to Greece last year, eliminate red tape Cameron says prohibits business, and give more power to national parliaments to block legislation out of Brussels.

EU members, including the U.K., are scheduled to meet next month to discuss Cameron’s demands. French Prime Minister Manuel Valls said Thursday the negotiations had “only just begun” and warned that an agreement “at any price” would not be acceptable.

Valls’s comments didn’t stop other European leaders from lobbying Cameron to stay; even Valls said it would be “a tragedy” if the U.K. left the EU. “I say that as a Frenchman,” he added.

Dutch Prime Minister Mark Rutte, also speaking in Davos, said Europe needs Britain’s “outward looking, trade oriented, growth oriented” approach. He also urged the British business community to come out against the Brexit.

Other European leaders piled on. German Finance Minister Wolfgang Schäuble said it would be a “disaster” if the United Kingdom leaves the EU. And Dublin feels “strongly” about Britain remaining a central EU player, said Irish Taoiseach Enda Kenny, who added: “The union would be weaker without Britain.”

In his speech, Cameron said he was “optimistic” Europe could produce a reform package that would entice Britain to stay. He urged British NGOs and firms to speak up on their “Brexit” position.

“Don’t hold back right now, even though the question [of what reforms would be made] isn’t settled,” Cameron said. “If business backs my reforms, if you want to see the competitive Europe, if you want to see the flexible Europe, if you want to see a Europe where you can be in the eurozone and win or out of the eurozone and win, I would argue ‘Get out there and support those things.’”

Cameron has told members of his Cabinet not to take a position on the Brexit before Brussels considers the reform package. But major corporations are making their position known.

According to a report Thursday in the Financial Times, JPMorgan, Morgan Stanley and Bank of America are all likely to give six-figure amounts to the Britain Stronger in Europe campaign, which is anti-Brexit. They join Goldman Sachs, which has pledged 500,000 pounds, or about $709,000, to the same cause.

Photo Credit: Monika Flueckiger/swiss-image.ch