The critics of David Cameron's recent speech on Europe are staring in the rearview mirror. They extol a European Union that brought peace, contributed to security in the cold war, and fostered regional integration that met 20th century needs. These are historic accomplishments. But that world is past.
I am not a nostalgic Anglophile, though I am fond of Britain. Some 20 years ago, in opposition to the UK government, I supported Germany's unification and EU integration. My view today is based on a global assessment of how the European Union and Britain must again adapt. The United States and the world benefit from an economically healthy, open European Union that accommodates national diversity and is grounded in democratic choice.
Instead of lecturing Britons with old talking points that they would not accept themselves, Americans should be listening to Mr. Cameron. By looking ahead, the UK prime minister's speech could turn out to be a rare statement that moves the arrow on the future's compass.
First, Mr. Cameron recognizes that Britain and the European Union must be more competitive in a fast-changing world economy. The European Union of the 20th century was preoccupied with forging a regional market among advanced economies; yet over the past five years, two-thirds of global growth has come from developing economies. Over the past decade, the share of developed country exports to developing markets rose from 25 to 45 percent. To compete, Europeans will need structural reforms, not just fiscal and monetary policy patches.
Some structural reforms take time to produce benefits. But labor market flexibility and an approach that supports small business can produce jobs quickly. So Mr. Cameron is challenging EU social and work policies. He wants the single market to extend to more services. As a world leader in financial services, the United Kingdom needs banking safeguards that do not strangle a key industry. EU policies also threaten innovation in energy, agriculture, and the life sciences. As Gordon Brown showed when he resisted adopting the euro, Britain—an advanced economy with more than 60 million people—should be willing to defend its beliefs and interests.
Second, Mr. Cameron recognizes that the euro area crisis will change the European Union. Because the euro area's trials demand a fiscal union, he shifted Britain's historic resistance to deeper integration. He accepts that there will need to be different approaches for various EU members.
No one can foresee how these arrangements will turn out. Mr. Cameron is acknowledging the reality that EU states will need to debate and negotiate the outcome, and he is expressing UK interests. One of his principles—to move governmental authority closer to citizens—simply presses the European Union to apply its own subsidiarity policy.
Third, it is now up to British diplomacy to determine whether Mr. Cameron makes history or merely a speech. London needs to develop partners, issue by issue. It will not be sufficient just to back the single market and cast protest votes. To achieve Mr. Cameron's aims, his ministers will need to build trust and ties with counterparts, persistently and consistently, not just leaving the work to traditional diplomacy.
Earlier this year, I listened to George Osborne, UK chancellor of the exchequer, present his case for the European Union to a group of German chief executives. They liked what they heard. Germany exports more to Britain than to China.
Berlin is the key to Mr. Cameron's strategy. While committed to deeper integration, German leaders might value the UK economic perspective and appreciate that the new European Union will need flexibility, as long as Britain remains on board.
Similarly, Britain can build allies among smaller European states if it convinces them it prefers coalitions to splendid isolation. France's dirigiste economic policies may obstruct UK aims—though Anglo-French military cooperation enhances the European Union. But, if Paris does not make structural reforms Germany and the euro area will have a larger worry.
Finally, Mr. Cameron's political judgment, in uniting the Tories and undermining the UK Independence party, is worthy of a nod from Disraeli. The Labour opposition will have to decide whether it opposes letting the public vote on such a key issue. Mr. Cameron's position also presses other European leaders to consult their voters. The European Union always has been an elite project; as it adapts, these elites should persuade their citizens, too.
Mr. Cameron stated that he prefers the United Kingdom to remain in a healthy, more competitive European Union. He countered British opponents of the European Union with arguments about its benefits. Now UK business should help Mr. Cameron. So should the Labour party. And the United States.
I hope Britain succeeds. The road ahead will not be easy. A Britain that did not try to shape its future, however, would be acquiescing to some future as "West Saxony" or "Normandy Nord." That would not be worthy of the Britons I have read about, worked with, and respected.