Why Cameron should stay clear of an 'emergency brake' on EU free movement

David Cameron's 'immigration speech' is expected to take place very soon.

As we have noted several times, one of the options that he potentially could go for is an "emergency brake" - the ability to impose temporary restrictions on the number of EU migrants who come to the UK.

We can see why this would be appealing politically - but we fear that if Cameron does announce something like this, without having a clear vision for how it would work exactly in practice, it could turn into another net immigration target. Sounding very good in an election manifesto - but ineffective in practice.

We've made this point a few times but to elaborate, here's why:

An emergency brake would be targeted at flows of new EU migrants not the existing stocks. UK Ministers have previously spoken about the need to manage “destabilising flows” – however, this remains a vague term that could mean many different things. Pinning down what would constitute a destabilising flow could prove incredibly tricky. For example, the graph below shows that current flows are not proportionately higher than previous flows and remain small as a share of the workforce (relevant for their impact on wages). In general, if the bar is too high, the mechanism will never be used. If too low, the brake would become a long-term rather than temporary measure – a de facto limit – and be tremendously hard to negotiate in Europe.

Source: ONS

It is very difficult to codify objective criteria for pulling an emergency brake – particularly any that apply to the UK’s current situation. The UK economy is booming, unemployment is falling, EU migrants have high employment rates and the UK takes less EU migrants per head than several other EU member states. All these most obvious criteria won't work for the UK. It's hard to claim to be the best performing economy in Europe and simultaneously claim to have a 'crisis' so bad that special treatment is required. It would also be impossible to predict all the future challenges migration could pose.

Source: Eurostat

Possibly the most compelling argument the UK could use at the current time is that certain local areas are facing high pressures on public services and housing supply. However, restricting EU migration to certain areas of the UK would be very difficult to administer in practice, while national restrictions would be a disproportionate response to local problems. The impact of migrants is also hard to discern in exact terms given other domestic policies regarding housing and local services.

What the UK would effectively be asking for is a ‘time out’ from EU migration – which is largely a result of understandable political pressures. However, this necessarily makes the criteria for pulling the ‘emergency brake’ politically arbitrary – and in turn tougher to negotiate in Europe. There's not a government in Europe, it now seems, that doesn't have a populist challenge. Should Spain be granted dispensation too?

It's also difficult to sell at home. There are precedents in EU law for restricting either free movement of persons or the other EU freedoms. So in that sense, an emergency brake wouldn't be completely out of character for the EU. All of the existing 'brakes', however, are policed by the European Commission and the European Court of Justice – would a domestic audience be happy with such an arrangement? Furthermore, at the very best the brake is likely to be temporary and may only delay flows rather than actually reduce them. It would have to be activated for a very long time in order for it to really reduce net flows in the long-term.

In addition, if ‘cost of living’ is to be cited as a reason for pulling the emergency brake, it means accepting that there is a ‘cost of living crisis’ – a move that would any UK Government would be politically loathed to make in public.

If someone can come up with a criteria for how to capture all the potential variables, then we're open to suggestions. But it would be foolish to announce such a big policy on such loose grounds. As we've argued repeatedly, writing the headline first, and the policy later, rarely works.

Owen Paterson: Has he called for #Brexit or #EUReform?

BBC reports is is #Brexit

Former Cabinet Minister Owen Paterson has just made a hard hitting speech on the UK’s relationship with the EU. He made a familiar case that the EU is as much a political union as an economic one. He concluded that the UK should remain in the ‘economic’ Single Market but remove itself from the political union.

A clear position? Well, staying in the Single Market, while removing the political aspects of the EU can mean different things – it could mean remaining in the EU while pairing back the worst aspects of the EU’s state building or leaving altogether and negotiating instead a trade agreement in order to retain access to the Single Market.

There has been some understandable ambiguity in the reporting of Paterson’s position, this is our under-standing:

Times reports it is "reform"

Firstly, Paterson believes the issue should be solved via a referendum in 2017. But his proposed question is not entity straight forward. His preferred options are:

Yes: The UK leaves the EU and joins the EEA, like Norway; or
No: The UK stays in the EU and joins the euro

An interesting choice, that excludes the possibility of better EU terms or even continuing as a non-Euro state. However, it is clear that Paterson’s negotiation is not a ‘re-negotiation’ but a simple negotiation for #Brexit. He favours joining Iceland, Switzerland, Lichtenstein and Norway in EFTA and joining EFTA’s deal with the EU – known as the EEA (of which Switzerland is not part). And in order to conclude his exit terms and EEA membership he seeks to use a provision of the Lisbon Treaty that allows a two year period after notifying the EU of an intention to exit to attempt to finalise continuity terms – Article 50. We're sceptical of the EEA model as an alternative for the UK outside the EU, at least as currently set out, but let's leave that one to the side for the moment.

It has been argued previously that Article 50 could be used to trigger a full renegotiation of the terms of the UK’s membership within the EU. However Paterson’s proposal is more straightforward – he wants to immediately start to negotiate Brexit terms in 2015 so that a clear proposition is on the table for the 2017 referendum. That may have the benefit of providing the clarity that has so far been lacking in the ‘out’ case – but has three obvious drawbacks.

1. What happens if the other EU states do not wish to negotiate prior to a referendum outcome – they cannot be forced to.
2. What happens if the UK votes to stay in – would the other EU member states be compelled to cancel the exit application? Perhaps but at what price?
3. Article 50 isn't a great negotiating tool. We have previously weighed up the pros and cons of using Article 50 below, but what's clear is that it's giving away a lot leverage over the UK's terms of exit (for example, the final deal will be decided by a qualified majority vote of which the UK won't be part).

Source: Gaming Europe's Future by Open Europe

Paterson may however argue that Article 50 is a legal mechanism and something as important as the UK’s membership will ultimately be decided politically, in the UK and the EU level.

EU and Tory madness – but what has changed?

In Britain, “Europe” as a political issue has pretty much gone mad over the last few weeks. There has been a lot of rhetoric, but where are we in terms of substance?

Free movement: When asked about reports in UK media that David Cameron is considering proposing quotas for EU migrants, Angela Merkel told the Sunday Times: “Germany will not tamper with the fundamental principles of free movement in the EU”. This has always been the German position (Wolfgang Schäuble today echoed those comments). She added, “I spoke to David Cameron and we agreed to assess the [the upcoming ECJ verdict on EU migrants’ access to benefits] together. These are controversial issues that are debated also in our country. I am of the opinion that they need to be resolved in a way that tackles abuse.”

Hot potato factor: Medium to high. As we’ve always said, changes to the EU’s “fairness” regime – who can access what benefits and when – is fully possible. Caps will be much trickier. Yes, the politics around EU free movement have become massively complicated, with Tory politicians seemingly talking up the need to cap numbers – even though we may sense a bit of back-peddling on the more aggressive rhetoric (Michael Fallon’s comments notwithstanding). Remember, we have not yet seen a concrete proposal from No 10 and in terms of the basic positions in Europe, Cameron’s chances of achieving reform in this area are very much unchanged. This remains a moving target though and much can happen.

European Arrest Warrant and the “block” opt-in: This is the decision by the Coalition government to take advantage of a quirk in the Lisbon Treaty which allows the UK top opt out of around 130 EU police and crime measures, and then choose to opt back in to all, some or none of these measures, which means accepting ECJ jurisdiction over these laws. The opt out will take effect on 1 December – but the Coalition wants the Commons to vote to opt back into a package of 33 laws, including the controversial European Arrest Warrant.

Hot potato factor: Medium. Up to 100 Tory MPs have said they want to rebel and vote against opting in to the EAW. This is a debate that has been going on for some time and the big question was always how many MPs would vote against opting back in to the EAW. Theresa May and Michael Gove are now trying to minimise the rebellion and Lib Dem and Labour MPs will vote with the Tory leadership so the measure will almost certainly pass.

The £1.7bn cash demand: Due to changes to the way the size of the economy is calculated (ESA 95 NOT ESA 10), the European Commission has asked the UK to cough up another £1.7bn by 1 December – freakily coinciding with the bloc opt-in deadline. Cameron has vowed not to pay the money by then.

Hot potato factor: Off the charts. This is simply shocking. From the DG Budget people within the Commission not being able to explain where the changes come from – in fact briefing media the wrong information (out of ignorance not spin) – to officials in Brussels, London and elsewhere not getting the political explosiveness of the issue to Cameron seemingly being taken completely by surprise. Depending on how this ends, it has the potential to go down in history as one of the most mismanaged episodes in the EU, ever. Cameron can hardly pay up by December 1, but it’s also not clear whether he can block it (the decision will be taken by a qualified majority vote – see upcoming blog post), meaning that without a face-saving gesture - which, given the stakes, is still fully possible - the stage is set for a proper political crisis.

This is a new development, and in the short-term, far more unpredictable than the block opt-in or free movement debate.

Cameron will update the House of Commons today – it could be a long afternoon.

Barroso lets his hair down - and British media loves it

Would the UK have zero influence outside the EU? 

Outgoing European Commission President José Manuel Barroso is in London, and he has made a few interesting remarks about the Tories, Brexit, EU free movement and Grant Shapps. Wading into the most intense debate on EU migration in the UK since 1066, he has really hit the headlines. 

However, Barroso no longer has any real say over decisions in the EU - it's Juncker's show now, and he has made addressing the UK's concerns a key priority, although it remains very much an open game. Also, remember, the bulk of Cameron's renegotiation won't be with the Commission - it'll primarily be with member states (though having the Commission on-side will certainly help). 

In any case, Barroso told the BBC's Andrew Marr Show yesterday:

"So far the British government has not presented a proposal, a concrete proposal [on reform of EU free movement rules]. There are ideas floating, there are rumours. I cannot comment on specific suggestions that have not yet been presented. What I can tell you is that any kind of arbitrary cap seems to me to be not in conformity with the European rules."

Barroso is of course right - restricting the number of EU workers coming to the UK, via quotas, would be illegal under EU rules - as we argued in our recent flash analysis and most people agree on. The question is whether changes to these rules are possible - this is a big discussion which we've looked at here. However, Barroso also tried to strike a more conciliatory tone when he stressed that there are "widespread concerns in the UK and elsewhere about abuse of free movement rights" and further changes could be made to address them, although "changes to [EU migrants' access to benefits] need all countries to agree."

Barroso had some less well-targetted comments, claiming for example, that the UK would be "irrelevant" and "have zero influence" outside the EU, while also appearing to link EU membership to Cameron's ability to fight the Ebola virus.

At an event this morning, Barroso was also asked about remarks made by Conservative Party Chairman Grant Shapps, who was sent out yesterday to dismiss Barroso's comments, calling the outgoing European Commission President “an unelected bureaucrat”. Barroso - now clearly free to let his hair down - went all in:

“Since I was 29 years old, I was elected in my country…I don’t know who this gentleman is, but certainly he has not more democratic legitimacy than I have.” 

Which begs the question, if Barroso doesn't know who Shapps is, how can he comment on the man's electoral record? Anyway, it allowed the Tories to play the 'we stand up to Brussels card'.

What are David Cameron's options on EU immigration?

Following reports that David Cameron is considering a new announcement on how he would renegotiate EU free movement, potentially considering an "emergency brake", we have set out in a short briefing what his potential options are.

Here are the key points:

The debate about internal EU migration has two dimensions. Though inter-linked they should be treated separately. “Fairness” – who can access what benefits and when; and “volume” – how many migrants come to the UK every year. David Cameron is reportedly considering moving from addressing fairness to making a demand to curb the numbers of EU migrants to the UK.

There is substantial support at the EU level to give national governments greater control over access to their welfare systems and doing so would not require treaty changes but a qualified majority vote among governments and the agreement of the European Parliament.

Any move to limit the numbers of EU migrants coming to the UK would most likely require treaty change (with the possible exception of an ‘emergency brake’) and therefore the unanimous agreement of other EU governments. It is currently unclear what exactly – if anything – Cameron might ask for on volume, but he may have three broad options, which in order of increasing difficulty to secure EU agreement are:

1. An ‘emergency brake’ triggering temporary controls on EU migration if the flow is considered ‘destabilising’, too large and/or concentrated;
2. Permanent quotas on EU migrants;
3. A points-based system, similar to that which exists for migrants from outside the EU, differentiating between “skilled” and “low-skilled” migrants.

There are a number of questions around how an ‘emergency brake’ could be organised practically, but if this is David Cameron’s top EU negotiating priority he may just achieve it, given that there are precedents for brakes in other areas in the EU treaties and there is increasing awareness across the Continent that public concern about free movement is contributing to the EU’s unpopularity.

Whatever the merits of the proposal, as a domestic political strategy, it is unclear whether an ‘emergency brake’ would be enough to see off UKIP – as Cameron could still be accused of failing to secure full control over Britain’s borders and migration policy – although it may reassure 'swing voters'. Therefore, Cameron risks spending a lot of political capital abroad for limited political return at home.

Securing either option 2 or 3 would be an extremely difficult task as it would involve fundamentally rewriting the EU treaties and unpicking one of the founding principles of EU membership. There is likely to be little or no political appetite for such a move among other EU countries. The Swiss experience shows that, even outside the EU, measures to limit EU migration could result in threats from Brussels of reduced trade access to EU markets.

This is not to say that EU rules on free movement can ever be changed, but rather that this is one area where Number 10 will find it hard to get away with creating the headline first, and the content later. Given the domestic sensitivity of the issue and how deeply it strikes at the heart of existing terms of EU membership, successfully negotiating change requires a well thought out plan that has domestic and European level buy-in.

Latest UK migration statistics likely to further turn up political heat on EU migration

The ONS has this morning released its latest long-term UK migration statistics and they are likely to increase the intensity of the spotlight on EU migration - if that was possible. The headline statistics are:

• 560,000 people immigrated to the UK in the year ending March 2014, a statistically significant increase from 492,000 in the previous 12 months. Two-thirds of the increase is accounted for by immigration of EU citizens (up 44,000 to 214,000).
• 28,000 Romanian and Bulgarian citizens immigrated to the UK in the year ending March 2014, a significant increase from 12,000 in the previous 12 months.
• This contributed to overall net migration rising to 243,000 from 175,000 the previous year, way over the totemic 100,000 figure targeted by Conservative ministers.
• It is also interesting to note that the decline in non-EU migration (the part the Government can control) seems to have stopped. The latest estimates for the year ending suggest that 265,000 non-EU citizens immigrating to the UK, a slight increase but not a statistically significant change, from 246,000 in the previous year. Net migration of non-EU citizens increased from an estimated 145,000 in the year ending March 2013 to 162,000 in the year ending March 2014.

Source: ONS

These estimates show that 54%, 30% and 14% of total EU immigration was accounted for by citizens of the EU15 (the 'old' EU member states), EU8 (central and eastern member states that joined in 2004) and EU2 (Bulgaria and Romania) respectively. Overall net migration of EU citizens was 131,000, a statistically significant increase compared to 95,000 in the previous year.

This highlights, once again, that a large part of the recent increase in EU migration is being driven by migration from the more established EU member states, presumably a large number of them looking for an alternative to the high levels of unemployment in the countries worst affected by the eurozone crisis.

In contrast, migration from the 2004 accession states has been relatively stable. Net migration from these countries was 41,000, not a statistically significant increase compared to the 34,000 in the previous year. For Bulgaria and Romania, it looks as though the ending of transitional controls on access to the UK labour market in January 2014 could have had some impact with a 12,000 increase in migration on the previous year (although we should be careful since this data mostly reflects 2013), and almost 80% of EU2 citizens arriving for work-related reasons.

Yesterday saw the German government announce tough new domestic rules on EU migrants' access to benefits, which closely mirror those announced by David Cameron late last month. Downing Street has welcomed the German proposals and added, "Clearly there is now a case for looking at other things we want to do where we may need to change the [EU] rules". The question now is whether Cameron can muster enough European support to change the EU rules in this area sufficiently to satisfy public and political opinion in Britain.

EU referendum to be held in 2016 or 2017...No, not that one!

Swiss President Didier Burkhalter (see picture) has today announced that Swiss voters will be asked to vote on the future of their bilateral relationship with the EU "by the end of 2016 or the beginning of 2017."

There have been long-running negotiations over the Swiss-EU bilateral deals, with the EU keen on greater supranational oversight, but these talks gained more urgency in the wake of February's referendum in which the Swiss electorate voted in favour of renegotiating rules on the free movement of persons.

The result stipulated that Switzerland will have to renegotiate its bilateral accord with the EU on free movement within three years or revoke it. This in turn could threaten Switzerland's other bilateral agreements with the EU.

Last week, the EU told Switzerland that it was not prepared to negotiate quotas on free movement. In other words, in that choice between accommodating Swiss demands or playing hardball that we identified back in February, the EU has definitely opted for the latter approach. Interestingly, the decision not to negotiate was apparently reached by unanimity amongst EU governments, meaning that the UK opposed allowing the Swiss to 'renegotiate'. This is awkward for David Cameron, he was left with a choice of either giving Better Off Outers fresh ammunition ("see what the Swiss can do outside the EU") or accusations of denying the Swiss a similar right to which he wants to give Britain. In addition, in that old EU tradition, the Swiss are effectively being asked to 'vote twice', with a view to them voting 'the right way' the second time around.

In any case, faced with this impasse, the Swiss government's approach seems to be to put a 'take it or leave it' package to the public in the hope they vote to renew the bilateral relationship with the EU, even if this means little or no change to the rules on free movement.

Given that Switzerland is already outside the EU, a rejection of the package by the Swiss electorate could see relations return to square one - what that means is anyone's guess at this stage.

If David Cameron is re-elected, Switzerland's 'renegotiation and referendum' could coincide or foreshadow the Conservatives' efforts, which could be interesting.

Is David Cameron's latest immigration crackdown legal under EU law?

David Cameron today announced another 'crackdown' on EU migrants, stating that from November, EU jobseekers "will only be able to claim Jobseeker's Allowance and other key welfare benefits for a maximum period of 3 months." This will halve the current period over which unemployed EU migrants can claim these benefits. The result of this change will therefore be that new arrivals from the EU cannot claim Jobseeker's Allowance for their first three months in the UK but can receive it for three months after that, rather than the six allowed under the existing rules.

In addition, a consultation has been launched on banning overseas-only advertising – legally requiring employment agencies to advertise in Britain, and new plans to restrict the number of Job Centre Plus jobs which are automatically advertised on an EU-wide job portal.

The European Commission has already said it will investigate whether the changes to the benefit rules are legal under existing EU law (the UK and Commission are already locked in a long-running legal dispute over EU migrants' access to benefits). So, are they?

Needless to say No10 and the DWP are confident they are, and we think the Government has a strong case. However, as we noted of David Cameron's last 'immigration crackdown' in November 2013, the UK is at the very limit of what it can do within the confines of EU law.

In order to keep this latest measure within the EU rules, it will only apply to new arrivals to the UK who have never worked in Britain. This is because under existing EU rules, people who have worked in the UK must be treated differently because they enjoy 'worker status' for at least six months. As others have noted the impact of this policy on the ground is therefore likely to be small as not many EU migrants will be affected.

We have ourselves called for the Government to address public perceptions about free movement, primarily by instilling the principle that EU migrants should only be entitled to benefits after having made an economic contribution. This is clearly David Cameron's intention and he used today's Telegraph article to make the point: "You cannot expect to come to Britain and get something for nothing."

But unless this latest measure is followed up with reform of the underlying EU legislation, the UK Government is in danger of chasing diminishing returns with the risk is that voters simply become desensitised to the flurry of crackdowns that make only piecemeal changes.

Government's Balance of EU Competences Review sets out need for reform - finally

Today, the UK Government has published the third batch of its reports reviewing the ‘Balance of Competences’ between the UK and the EU. We have noted before that many of the previous reports, whilst interesting on much of the detail, have for various reasons turned out to be rather disappointing and dodged the major questions facing Britain in the EU, so how do today’s tomes compare?

Most interestingly, the controversial, and much delayed, report on the free movement of persons has finally been published and, unlike many of the previous reports, it is much clearer about the Government's thinking in what is one of David Cameron's primary targets for renegotiation. The report, which was trailed in today's papers and quotes extensively from our submission to the consultation, which you can read in full here, makes the following points:

• "Whilst there is broad consensus that highly skilled migrants from the EU have been beneficial to the UK, there is less agreement regarding low skilled migration, with some arguing that gains for employers are offset by negative impacts on the lowest paid workers."
• "The scope of free movement rights has now expanded beyond their original intention, and is no longer limited to economic factors."
• "Successive judgments by the ECJ have interpreted the right to free movement set out in the Treaties and the Free Movement Directive broadly, with the consequence of expanding the rights of entry and residence which may be asserted in reliance upon them, and consequently restricting Member States’ competence in this area."
• Other concerns expressed were criminals' exploitation of the rules, the localised impact on public services, and falling public confidence in the concept of free movement.

Specifically regarding the existing rules on EU migrants' access to welfare, this is the key passage:

"The Government considers that now is an appropriate time to review the EU level rules with a view to modernisation and ensuring they are fit for purpose in the EU of today. The rules have evolved beyond the original scope as the EU has evolved and the interaction between rules on residence and social security coordination becoming increasingly complex. This complexity has led to an increasing number of challenges through the ECJ, creating uncertainty and, in the majority of cases, weakening the ability of Member States to determine how their systems operate."

"Without reform, legitimate public concern about how EU migrants access social security in other Member States is likely to significantly undermine support for the principle of free movement."

This is the most explicit any of the BoC reports has been about the need for reform and, while there is no settled policy prescription (the report discusses OE's and David Goodhart's reform proposals at length), the key issues have been clearly identified.

This is apparently the third iteration of the report, following several rounds of coalition ping-pong. Nevertheless, it highlights the degree of cross-party consensus on the need for reform of benefits rules - which Labour has also called for. It would however be intriguing to know what was cut in the various edits.

We will be leafing through the other reports published today and will return to them on the blog later this afternoon.

The gates are open but so far no flood

Official data from Office of National Statistics published this morning shows that the number of workers from Bulgaria and Romania have dropped from 144,000 to 140,000 since transitional controls were lifted for workers from the two countries on 1 January 2014. As we said all along, not quite the opening of the floodgates that some had predicted.

Nevertheless, this still represents an increase of 29,000 workers from Bulgaria and Romania year-on-year. And the quarterly numbers do not present a full picture on which to judge any longer-term change or pattern.

More broadly, the data shows that, while coming from a low base, EU employment has driven quite a lot of the recent increase in employment. In total, the number of  employed in the UK has increased by 741,000 year-on-year. Migrants from the Central and Eastern European 'EU 8' countries only account for 2.3% of total UK employment but, over the past year, workers from these countries have accounted for 15.5% of the increase in UK employment (see graph below).

It remains to be seen whether these figures will have any effect on the political debate about migration in the UK, particulalry from the EU. Annual migration (rather than employment) figures released later this month (potentially on European election day) are expected to show that EU migrants from the EU will outnumber migrants from non-EU countries for the first time - which has the potential to be politically explosive.

Why is the UK so bad at counting people who come and go?

The ONS has now admitted that its figures for net migration into the UK were underestimated for the best part of a decade. For the period 2001-2012 it has said that 346,000 more people came to the UK than under its previous count. That the migration figures are liable to revision should be no surprise as the underlying original data - the International Passenger Survey (IPS) - is (as the name suggests) only a survey. The UK Government doesn't properly count who comes and leaves. However, the underestimation is still startling. 

Of the newly found 346,000 (the green line charted below) it is assumed that most of it can be accounted for by EU migration.

Source ONS

As we can see from the purple line net EU migration picked up after 2003 peaking in 2007 at over 100,000 per year. This coincides with the period of the majority of the ONS under-counting. The ONS believes its under-counting was due to a failure to recognise the large numbers of EU migrants coming through regional airports. Under the original IPS figures for the 1996-2011 period, a net figure of 3.9 million came into the UK of which 800,000 were from the EU. So who are the newly discovered 346,000 and how many EU migrants did actually come to the UK?

The answer is that we do not know. The 2011 census, which is a more accurate dataset, suggested that there were 2.7 million EU migrants in the UK of which 1.1 million had come from the 'new' post 2004 accession states. But this may itself be an underestimate and will include a large number of longer term migrants. It is likely that the ONS is right to suspect that their figures for EU migrants were underestimated but unless the UK starts counting people in and out we will never accurately know.

This is one of the biggest problems with the EU migration debate: the absence of reliable data and information erodes public trust in free movement. Yes, EU membership involves some loss of control over the border. But the UK is still out of the Schengen 'passport free' zone and other countries - via more effective identification (a complicated discussion in itself), taxation and border systems - are far better than the UK at counting.

Hungarian Commissioner says anti-immigration sentiment in Europe is a "non-issue" - days after a neo-fascist party gets 21% of the vote in Hungary

A bigger threat to the EU
than the UK's 'right to reside test'?

The Barroso Commission's term is rapidly coming to an end and Viviane Reding and Laszlo Andor are neck and neck in a pulsating contest for who will claim the wooden spoon - the award for worst Commissioner. Reding held the lead for a long time but Andor may have just caught up after his comments about immigration at an event yesterday on engaging the youth in EU politics.

According to EurActiv, when asked by an audience member about the rise of anti-immigration in EU member states, specifically towards Bulgarian and Romanian nationals, Andor replied that this was a “non-issue” raised mainly in the UK and Denmark, who were not founding members of the EU. He went on to say that:

“Discussions there are really annoying because they are discussing on non-issues like benefits tourism which is largely a myth.”

Leaving aside the extent of so-called benefits tourism - which we can debate - is a Commissioner from Hungary really saying that anti-immigration sentiment isn't a problem? A bit rich given that an outright fascist party - Jobbik - won almost 21% of the vote in last weekend's Hungarian parliamentary elections, a higher vote share for a similar party than in other EU country, and an increase from around 16% in 2010. Remember, this is a party that even Marine Le Pen from Front National has refused to cooperate with as she considers them to be too nasty.

There are plenty of unpleasant parties around Europe but aside from Greece's Golden Dawn, Jobbik really are in a league of their own. Despite running a more restrained and professional campaign, the party is at its core fundamentally anti-Semitic and anti-Roma, espousing a Hungarian nationalism that sees the inter-war dictatorship under Miklós Horthy when the country was aligned with Hitler and Mussolini as a source of pride. The party also has strong links with fascist paramilitary groups that have been involved with violent street clashes with Roma.

In 2012, the party's deputy parliamentary leader Márton Gyöngyösi infamously argued that

“I think now is the time to assess…how many people of Jewish origin there are here, and especially in the Hungarian parliament and the Hungarian government, who represent a certain national security risk for Hungary.”

The party's 2010 election manifesto meanwhile claimed that:

"The coexistence and cohesion of Magyar and Gypsy is one of the severest problems facing Hungarian society... a segment of the Gypsy community strive for neither integration, nor employment, nor education; and wish only that society maintain them through the unconditional provision of state benefits... certain specific criminological phenomena are predominantly and overwhelmingly associated with this minority, and that as a result such phenomena require the application of fitting and appropriate remedies."

Given their general outlook we imagine Jobbik wouldn't be too keen on large scale EU migrations into Hungary (other than of ethnic Hungarians from bordering countries which they have actively called for).

It is frankly ludicrous for Andor to single out the UK and other member states struggling to address the political and economic ramifications of unanticipated large scale immigration for criticism when a full blown fascist revival appears to be underway in his own backyard.

Fact-checking the Clegg v Farage EU debate

The first EU debate between Nick Clegg and Nigel Farage on LBC was for the most part restrained with a surprising amount of detail and substance. Most of the key fault lines in the UK-EU relationship were touched on.

However, given that the two men represent the polarising ends of the debate, there were also a number of claims that struggled in the accuracy department. Here is our quick 'fact-check' of the key debating points:

Claim - Clegg: I supported a referendum on Lisbon

Verdict: Technically true but highly misleading

On the referendum question, Clegg said that when it came to new EU Treaties transferring new powers to Brussels,

"I've never wavered in that position, that's why the last time the rules changed, something called the Lisbon Treaty, I said there should be a referendum."

It is true that the Liberal Democrats called for referendum on Lisbon but crucially it was an in/out referendum which was not on the agenda at the time - the issue wasn't even put to put to a vote. There was however a vote on whether to have a referendum on the Lisbon Treaty itself on which the party abstained, despite the fact that together Tory MPs, Lib Dem MPs and Labour rebels could have passed it. Clegg is being highly disingenuous by blurring the distinction between an in/out referendum and a treaty specific one. Farage's quip that there was no point waiting for a new Treaty as powers were being transferred to the EU every week via directives and ECJ rulings was quite effective in this context.

Claim - Farage: Under EU rules we have a completely open door to 485 million Europeans 

Verdict - Partially true but unclear on the numbers

It is true that the free movement of labour is a fundamental principle of the EU and the UK cannot limit the numbers of EU migrants coming over. However, Clegg was right to point out that the right to free movement is not completely unqualified - under the free movement directive migrants have to be able to support themselves financially or have 'reasonable' prospects of finding a job.

In terms of Farage's 485 million figure though we have to say we are a bit confused as to where exactly this comes from - the population of the EU28 is around 506 million, which minus the UK's approximately 63 million leaves 443 million.

Claim - Clegg: 3 million jobs would be at risk if UK left the EU

Verdict - Highly unlikely - would depend on a range of other factors

Clegg cited the well-worn '3 million jobs linked to the EU figure' despite established doubts over its veracity. Recently those tending to cite this number have replaced "depend on" with "linked to" but it's still dubious. As we've argued in the past, this claim is one of the most conspicuous examples of a rogue statistic without any credible counter-factual attached to it. The assumptions behind the 3 million jobs figure is that there would be no trade at all trade with Europe if the UK left the EU, which of course is nonsense -  a similarly heroic assumption to that which Better Off Outers make when calculating the cost of EU membership based on all regulatory cost magically disappearing on Day 2 post-Brexit.

Claim - Farage: UK would hold the whip hand in negotiations over a new trade deal with the EU

Verdict - Very uncertain 

Farage argued that in the event of an exit, the UK would "hold the whip hand" in trade negotiations with the EU due to the EU's trade deficit with the UK. We've looked at this in detail - the key point is that while this is true in the area of goods, when it comes to services - a crucial and thriving area of the UK economy - this is not the case. So with that logic, EU countries would have incentive to strike a deal with the UK in goods but not services including financial services. Secondly, the process for leaving the EU - the so-called Article 50 - actually involves less control for the UK than is often assumed, including a Qualified Majority Vote on the final deal in which the UK will not take part.

Claim - Farage: 75% of UK laws come from the EU. Clegg: no it's 7%

Verdict - Both are wrong

The contentious topic of how exactly how many UK laws are derived from the EU also came up, with Farage gleefully citing Viviane Reding's absurd claim that 75% of UK laws are decided in Brussels (as we've argued many times, Reding must secretly be on the UKIP payroll). Clegg went with the House of Commons' Library's briefing which estimated this to be around 7%. Regular readers will know we've analysed this in painful detail and the truth is it is simply not possible to say exactly - what's clear is that it's neither 7% (this only counts primary legislation which isn't meaningful at all) nor 75%. (But basically too many).

Claim - Farage: We give the EU £55 million per day

Verdict - True if counting gross cost, untrue and misleading if counting net cost

Farage is correct that the UK's contribution to the EU works out as around £55 million per day. However, that it is a gross figure which does not include the UK rebate (cold, hard cash the UK gets back from Brussels every year) and nor the UK's receipts from the EU budget (even if this is only UK taxpayers' cash being re-routed via Brussels).

Claim - Clegg: Without the EAW we'd struggle to extradite criminals and terrorists

Verdict - The EAW makes the process faster but it is not indispensable

The European Arrest Warrant (EAW) is used by EU states to speed up extradition procedures. It is true that the EAW has been used by the UK to recover suspected terrorists and other criminals from other EU states who have subsequently been found guilty and locked up. It is however untrue to claim that suspects such Hussain Osman and Jeremy Forrest could not have been recovered without it. Also before the EAW was agreed, there were agreement on extradition and the UK managed to successfully extradite plenty of criminals from EU countries through bilateral procedures. These were considerably slower but it is highly unlikely that with or without the EAW Italy would have wanted to hang on to Hussain Osman or France to Jeremy Forrest.

EU free movement: Denmark is in an almighty mess

After the UK, Denmark is now the country in which the intersection of the single market, social security and domestic politics looks the most complicated and contentious.

EU migration has become front-page stuff in Denmark. We're talking papers publishing a comprehensive list of the benefits EU migrants are entitled to, complete with the cost to the Danish taxpayer (2 billion Krona or €270m per year - according to Ekstra Bladet).

The reason is that Denmark has hit a bit of a perfect storm involving the complex interaction between EU law and three separate subsidies: child benefits, student grants and unemployment benefits. Basically, Denmark is accused of breaking EU law in all three areas:

Child benefits: In 2010 the then centre-right Danish government introduced a requirement for EU citizens to have worked in the country for two years before being entitled to claim benefits for their children (the "børnecheck"). The European Commission said last year this practice violates EU law, forcing the Danish minority government to seek to bring the rules in line with EU law. However, the opposition has so far refused to support a proposal to make EU migrants eligible for child benefits from day 1.

Student grant: In Denmark, students pay no tuition and are eligible for a grant while they study. In a ruling last year, the European Court of Justice said EU students must also be eligible for the grant - a very controversial ruling for various reasons (not least since few students from elsewhere in the EU seem interested in sticking around once they are done studying).

Unemployment benefits: According to figures from the Danish government, EU migrants are less likely to claim social benefits than the national average, but more likely to claim unemployment compensation (though the margins are small). The perception that EU migrants claim more of this benefit than natives is political dynamite. In response, the Danish coalition is planning to tighten access to unemployment benefits, by requiring Danish language courses, a mandatory call for availability to work and stricter requirements to be domiciled in Denmark.

The European Commission has hit back against these changes, calling them "illogical". And to add fuel to the fire, Copenhagen may soon be forced to change its existing rules on unemployment benefits (Under Danish rules, EU citizens must have worked three of their past 12 months on Danish soil before being eligible for the "dagpenge").

In a case likely to set a precedent for Denmark, the Commission has taken Finland to the ECJ over similar rules. The Danish government this week submitted its own defence in support of Finland but diplomats in both countries think they might well lose, meaning the rules have to change.

All of this is creating a very awkward situation for Danish Statsminister Helle Thorning-Schmidt. So far she has insisted on EU law needing to be respected - but Danish voters are aware she's also eyeing a top EU job in the EU institutions later this year and cynicism is growing.

Needless to say, the Danish People's Party has had a field day, saying stuff like:

“Either our entire welfare system collapses or the EU rules are changed. I would prefer the latter.”

DPP (DF) is now at over 20% in some polls and could win the European elections. 

So what does this mean for David Cameron? Well, he can take heart in the fact that one country faces a greater legal - though certainly not political - dilemma over EU migration than he does. Logic would suggest that Denmark is a strong, potential ally to the UK in reopening, say, the EU Social Security Regulation (which regulates access to a number of benefits, including child benefits).

Worryingly for Cameron, this is not quite how some people in Copenhagen see it though. But, we must say, it would be an accomplishment for the UK government to fail to sign up the Danes' support on this issue.

The Danish situation is seriously messy. 

New rules on access to benefits: another UK legal stand-off with the Commission?

The Government has today announced the details of the "minimum earnings threshold" that will be applied from 1 March to EU migrants seeking to claim certain benefits in the UK. The plan was first outlined in David Cameron's FT article last year, and the DWP has today revealed the details.

Under the new system, EU migrants will have to demonstrate they have earned around £150 a week - the level at which employees pay National Insurance contributions - for three months in order to qualify for "worker" status, which opens the door to certain benefit entitlements. Jobseeker's will need to wait three months before getting income-based jobseeker's allowance and, after the introduction of new rules on April 1, they will be ineligible for housing benefit. Those deemed not economically active would need earnings above income support levels and comprehensive sickness insurance, to be eligible to claim child benefit or child tax credit.

In our briefing following David Cameron's article in November 2013, we noted that the proposal for an earnings threshold had the potential to intensify the legal stand-off between the Government and the European Commission over the rules on access to benefits.

The Telegraph today quotes a Commission spokesman as saying:

The Court of Justice's case law makes clear that part-time workers, trainees and au pairs can be classified as 'workers', provided their activity has an economic value and is genuine and effective. This case-law makes clear that a definition of a worker according to the amount he or she earns is not compatible with EU law.

This is only an initial reaction and the Commission cannot take further action until it has reviewed the proposals. But, as we understand it, the Government will argue that it is not illegal because the threshold simply acts as an 'alarm bell' at which point claimants will face a fuller assessment of whether their work is "genuine and effective", with the possibility of being denied worker status.

This extra step means that the threshold is not an automatic criteria and should therefore fulfil the EU requirement that each applicant be assessed on their individual case.

What the Commission will make of this argument we cannot say but, as we have argued before, rather than the constant battling between the Commission and member states on this issue (it's not just the UK), the rules on access to welfare need proper reform, with a much stronger link between access to welfare and an economic contribution to the host country.

Europe responds to the Swiss referendum - and it ain't pretty

We suspect the reverberations from the decision in the Swiss referendum to cap the number of EU migrants might be felt for some time (we look at what the long term implications could be for the UK here). The Swiss case is interesting because unlike the debate on migrants from Central and Eastern Europe in the UK, Germany and the Netherlands, it primarily affects citizens of the wealthier member states, primarily Germany, France and Italy. Here are some immediate reactions from around Europe.

The tone from the Berlin has been quite tough with Steffan Seibert, Merkel's spokesperson commenting that:

"The government takes note of the result and respects it but it is also the case, in our view, that it throws up considerable problems... It's in our interest to keep EU-Swiss relations as close as possible."

Foreign Minister Frank-Walter Steinmeier (SPD) added that "I believe that with this result Switzerland has harmed itself". He also dusted off the classic line so beloved of his predecessor in the post:

"there can be no cherry-picking when it comes to the EU" 

The new FDP leader Christian Linder echoed this sentiment arguing that "The Swiss are taking from the European buffet only that what they want" (which is kind of the point of a buffet). Interestingly however he added that he was "open-minded" about having more referenda in Germany.

Meanwhile Alternative für Deutschland leader Bernd Lucke didn't explicitly argue for capping EU migration although he struck a different tone compared with the established German parties, arguing that:

"Irrespective of the result of the Swiss referendum we can also achieve in Germany an immigration law which is based on qualifications and he ability to integrate while preventing benefits migration... If necessary we could have such referendums [in Germany]."

The least diplomatic response came from Ralf Stegner, leader of the SPD faction in Schleswig-Holstein who took to twitter to describe the Swiss as "crazy".

Die spinnen, die Schweizer!
— Ralf Stegner (@Ralf_Stegner) February 9, 2014

The response in France has also been quite tough with Foreign Minister Laurent Fabius arguing that:

“This is bad news for Europe and the Swiss, because Switzerland will be penalised from withdrawing into itself... There’s a so-called ‘guillotine clause’ establishing that if one of the elements [of the Swiss-EU bilateral deal] is put into question – in this case, the free movement of workers – everything falls down. Therefore, this means we’ll have to renegotiate […] This means we’re going to reconsider our relations with Switzerland.”

Former French PM Fillon (UMP) was commented that:

“It would be totally incomprehensible if Switzerland put a barrier to the access of cross-border workers… On the other hand, that [Switzerland] wants to reduce the overall number of foreigners on its territory is a perfectly natural demand.”

Italy's Foreign Minister Emma Bonino said that:

“The impact [of the Swiss referendum] is undoubtedly very worrying, with regard to both Italy and the other agreements with the EU.” 

Matteo Salvini, the leader of Lega Nord, said:

“Hurrah for Switzerland’s democratic referendum. We’ll propose one in Italy, too.”

However, his fellow party member Roberto Cota – the governor of Piedmont – voiced concern over the future of cross-border workers from his region, claiming that:

“Respect is needed, because we’re talking about honest and regular workers. Together with [Roberto] Maroni [the governor of Lombardy, another senior Lega Nord member] we’ll request a meeting with [Italian Prime Minister Enrico] Letta on this issue as soon as possible.”

UK Foreign Secretary William Hague was quite restrained, commenting that he did not want to prejudge the results of the negotiations, adding that:

"We will be mindful of the position of 40,000 British nationals who work in Switzerland".

Irish foreign minister Eamon Gilmore warned that “We are seeing signs of the rise of the far-right in Europe” while the Luxembourgian foreign minister Jean Asselborn has been the most outspoken, claiming that the vote has put the Swiss in “good company” with people such as Marine Le Pen, the leader of the French Front National.

There have also been some strong responses coming out of Brussels with EU Commission spokeswoman Pia Ahrenkilde-Hansen commenting that:

"The message is clear today: free movement of people is a sacred right for the EU... This will clearly have implications for the rest of the agreements [with Switzerland]."

EU Justice Commissioner Viviane Reding, never knowingly understated, argued that "the single market is not a Swiss cheese. You cannot have a single market with holes in it" which is a silly statement given that the Swiss trading relationship actually is a bit like a Swiss cheese, with patchy market access in services, for example.

The response from MEPs is also interesting as they might have a say in the negotiations (although this is a bit of a grey area). While EP President Martin Schulz was relatively restrained, other senior MEPs were quick to stick the boot in.

Disappointing Swiss referendum will lead to disadvantages for CH in new negotiations with EU. #abst14 #CHvote
— Hannes Swoboda (@Hannes_Swoboda) February 9, 2014

So a lot of posturing. These negotiations will be very, very interesting...

Switzerland's free movement referendum could provide key test of what life outside the EU is like

On Sunday the Swiss electorate will be asked to vote in a referendum on whether to impose migration quotas on European Union and European Economic Area nationals – a system the country currently uses for non-EU/EEA migrants. The referendum question doesn't specify how large or what shape the quotas would take, but would instruct the Swiss Parliament to draft legislation addressing the immigration issue within the next three years.

Ahead of Sunday’s vote, it is looking very tight with 43% expected to vote in favour of the quotas and 50% against, according to a recent poll by GFS.Bern. If the referendum result goes in favour of introducing quotas, not only would it potentially end free movement between Switzerland and the EU as we currently know it, there could be much wider ramifications for the Swiss-EU relationship that would provide a landmark test case.

The Swiss-EU agreement on free movement was part of a bundle of agreements known as ‘Bilaterals I’, which covered six other areas including the Mutual Recognition Agreement, which simplifies the admission of Swiss products in to the EU market, trade in agricultural products and civil aviation (other aspects of Swiss-EU relations are governed by a 1972 free trade agreement and there is also a Bilaterals II – in total there are 20 main and 100 subsidiary agreements in place). Crucially, Bilaterals I contains a ‘guillotine clause’ stipulating that the contents can only take effect together: if one of the agreements were not to be prolonged or terminated, the others would also cease to have effect.

Nothing will happen immediately on Monday morning, irrespective of the referendum result, because if the Swiss government is mandated to impose quotas it would have to decide what form this would take. Nevertheless, it would set up a very difficult negotiation with Brussels, which, if it wants to play hardball, could scrap the entirety of the rest of the agreement.

Now, it is not difficult to see why this could have consequences beyond Switzerland's relations with the EU (some would argue, it will also be another test of how the EU responds to referendum results). But, should the row escalate and other aspects of Switzerland's trade cooperation with the EU be cut off, many would argue that it illustrates that a pick and mix UK relationship with the EU from outside (particularly a carve out from EU immigration that UKIP would favour) would be difficult or impossible to pull off. If, on the other hand, Switzerland was able to renegotiate its relationship to impose some form of restriction on EU migration, however minor, this would give those who favour UK exit an important precedent to point to.

For this reason, we suspect the EU will take a very hard line with the Swiss government if the Swiss people vote for quotas on Sunday.

Tories' Polish allies label Cameron's migration comments as "unacceptable"

Much has been said and written about EU free movement, indeed the rhetoric has escalated in the weeks before the lifting of transitional controls on citizens from Bulgaria and Romania. The question of on what terms EU migrants should be able to access the UK's welfare system - a crucial and sensitive issue - has been rolled into a wider debate about the costs and benefits of immigration per se.

While the tough message adopted by the government is designed to reassure a concerned public that EU migrants will not be a drain on the public purse, this has also generated a lot of concern among EU partners. While protests from the likes of Viviane Reding and Laszlo Andor will not cause anyone in Whitehall or Westminster to loose any sleep - in fact quite the opposite - the reaction from broadly sympathetic EU partners like Germany and the Netherlands ought to. 

Today, even Poland's largest opposition party Law and Justice (allied with the Conservatives in the European Parliament) stuck the boot in, letting it be known that leader Jaroslaw Kaczynski had personally written to Cameron to complain after the Prime Minister described Labour's decision not to apply transition controls to the A8 countries in 2004 as a "mistake" and a "shameful dereliction of duty". 

In an interview with Polish Radio today, Law and Justice MP Marcin Mastalerek described Cameron's comments as "unacceptable", adding that:

"If Cameron does not revise his view on this subject it will make working together in the European Parliament exceptionally difficult". 

Wprost cites Law and Justice MEP Ryszard Czarnecki as saying that:

"This is a completely mistaken diagnosis of the situation. The British economy has earned billions of pounds thanks to the work of Polish migrants over the past 9 years... I think the letter from [former] Premier Kaczynski will provide Prime Minister Cameron with some valuable material."

He added that he hopes the Polish government would also protest against Cameron's words which "are hurtful to the hundreds of thousands of Polish citizens who are working to advance the welfare of the UK".

Of course Law and Justice cannot afford to be seen giving Cameron a free pass on rhetoric that is seen as being hostile towards Polish citizens, so the tough tone is partially for domestic consumption. It remains to be seen whether the two parties really will struggle to work together within the ECR group.

Former Polish President Lech Walesa also joined the fray, accusing the UK of not appreciating how much they've benefited from the fall of Communism and of behaving "irrationally and short-sightedly".

The wider risk - as we've pointed out in our recent briefing analysing the results of our simulated UK-EU negotiations - is that Cameron's tendency to jump from headline to headline when it comes to EU issues risks alienating potential allies in his bid for reform.

It's not just the UK that's losing patience with the Commission over access to welfare

Viviane Reding

In a few weeks time, the transitional restrictions on citizens from Bulgaria and Romania gaining full access to all EU member states' labour markets will expire. As we have covered in our press summaries and on our blog, it's not just in the UK where this has led to political upheaval.

Last week, European Commissioner Viviane Reding finally responded to concerns expressed by the UK, Germany, Austria, and the Netherlands back in April about benefit tourism in the EU. Although she was right when saying that “free movement is a right to free circulation; it is not a right to migrate in member states' social security systems”, her actual policy proposals aren't terribly convincing.

In order to crack down on the abuse, the Commission proposes:

- a handbook to help local authorities spot sham marriages as well as guidelines on habitual residency, which would determine the extent to which a person is entitled to draw benefits in a host EU country (in other words, more intervention into national policy)

- helping local authorities understand EU free movement rules

- topping up the European Social Fund

That throwing more money at the problem isn't going to improve things shouldn't need to be said, especially given the sorrow state of the EU budget. The UK, is according to EU officials, "very disappointed with the scale and ambition", while German Interior Minister Hans-Peter Friedrich reacted by saying, "To launch discussions or to develop brochures won't suffice".


Hans-Peter Friedrich

What Germany will do next most likely depends on how smoothly the "second accession" of Romania and Bulgaria in January goes, but in any case the German coalition deal doesn't leave any room for doubt that it is determined to do something about it if problems arise.

Friedrich has threatened to work with other governments “outside the structures of the EU” if the Commission doesn’t respond adequately to concerns about welfare tourism - another signal that Germany is ready to resort to intergovernmentalism as it has signalled it will do with the banking union, at least for now.

Dutch Interior Minister Lodewijk Asscher, who has been making many similar noises to the UK and Germany, thinks that more Romanians and Bulgarians will come to the Netherlands than has been predicted. He said, "The official predictions are low, but earlier predictions weren't correct either."

He added that he would have liked to extend restrictions for Romania and Bulgaria, but "if you have an agreement with other countries, you should stick to it". However, local authorities in the Dutch cities of Rotterdam and The Hague are reportedly ready to defy EU law by denying tax or social security numbers to Romanians or Bulgarians who fail to pass housing and employment checks.

Meanwhile, today, UK Work and Pensions Secretary Iain Duncan Smith has announced that new migrants will be asked to prove that their English language skills will be no barrier to them finding employment in Britain, under plans to strengthen the UK’s Habitual Residence/Right to Reside Test. The Dutch coalition agreement already states that "Individuals who cannot speak Dutch will not receive social assistance benefit. This principle will be applied consistently: to EU nationals, third-country nationals and Dutch nationals."

The European Commission's run-ins with the UK, over the 'right to reside test', and Germany, following which Friedrich accused Commissioner Reding of "ignorance", highlight the level animosity its approach has caused.

The EU Treaty doesn't need to be re-written to deal with this issue. We've made a few suggestions here that the Commission would do well to engage with it if it really cares about maintaining support for free movement in Europe.

Between a rock and a hard place: Is Spain breaching EU law by making life difficult for Gibraltarians?

The 'Gibraltar question' has consistently been the biggest bone of contention in UK-Spanish relations ever since the 1713 Treaty of Utrecht which saw the territory permanently ceded to Britain. Although the issue never goes away, every now and then it flares up, and the decision by the Gibraltar authorities to construct an artificial reef - to prevent alleged incursions from Spanish fishing vessels - has been the latest trigger.

The Spanish authorities do have the scope to make life difficult for the Rock's inhabitants, and Spanish Foreign Minister García-Margallo has commented that this time, "the party is over". Madrid has already introduced stringent border checks on people travelling in and out of the territory - resulting in up to seven hour queues on the border (in stifling heat) - and further actions have been threatened, including €50 levy on cars entering and leaving the territory, as well as a tax crackdown on Gibraltarians who live on the Spanish side of the border.

Leaving aside the question of whether this is even in Spain's own interest given its own economic problems (thousands of Spanish citizens work in Gibraltar), are these types of measures - particularly the levy - even permitted under EU free movement rules? EU law prohibits discrimination against citizens of other member states when it comes to free movement, and the UK has indicated it could issue a legal challenge.

So does the UK have a good case? Article 45 of the EU Treaties which establish the principle of free movement states that:

2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. 

3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health: 
(a) to accept offers of employment actually made; 
(b) to move freely within the territory of Member States for this purpose; 

Discrimination is clearly prohibited for the purposes of employment, as is the ability to "move freely" within member states for this purpose, although exemptions for "public policy" and "public security" are quite vague. However, the right to free movement covers the right to live and work in another member state, it does not address the more specific issue of travelling between two member states for this purpose.

The UK and/or the Gibralterian authorities could however argue that the burdensome checks are a de facto impediment to the ability of British and Spanish citizens to exercise their right to work in another member state (i.e. on the other side of the border) and are therefore illegal under EU law. This is particularly true as the restrictions would not apply to the other border crossings, such as the Portuguese or French ones, although the Spanish could counter that the levy would be no different to localised toll roads or charges.

On the border crossing issue, EU member states are still allowed to police their own external borders, but internal border controls have been abolished in the Schengen area of which the UK is not a part. Therefore, Spanish authorities have the right to impose border controls, but according to a Commission source they have to be "proportional".

In other words, we have absolutely no idea whether the UK would be successful should it take Spain to the ECJ. The wonders of EU law...