News Analysis: Britain Rethinks Opposition to a Two-Tier E.U.

BRITAIN could be on the verge of accepting, maybe even welcoming, the two-tier European Union it has long resisted.

When Prime Minister David Cameron warned on Sunday that he might veto the bloc’s next budget, he was repeating a threat made by most of his predecessors before they haggled over future spending. But in a BBC interview, Mr. Cameron went on to suggest something never countenanced by any previous British prime minister: that on spending issues, it might be good to split the European Union in two.

Despite its long ambivalence toward European integration and its refusal to adopt the euro, Britain has usually demanded a seat at Europe’s top table. And the country has resisted moves to relegate it to an outer, more detached tier as a status not befitting a global power.

But with Britain struggling to emerge from recession and Mr. Cameron under domestic political pressure to distance his country from Europe’s financial problems, he is now willing to let Britain take a back seat in the European Union.

“When you have got a single currency with a central bank behind it and more transfers between those countries, there will come a time, I believe, when you will need to have two European budgets: one for the single currency — because they are going to have to support each other much more — and perhaps a wider budget for everybody else,” Mr. Cameron told the BBC interviewer, Andrew Marr.

“We should be welcoming of this,” Mr. Cameron added.

Under plans now being discussed in Brussels, the 17 European Union nations that use the euro could have their own budget, allowing them to make big transfers of cash to help ease the type of economic pain now being felt in Greece and Spain. They might even have their own separate parliament, to make the system more accountable.

By contrast, countries like Britain would stay out, driving in Europe’s slow lane — or perhaps heading in another direction altogether.

For longtime observers of Britain’s engagement in the European Union, this is a shift of potentially historic proportions.

“Ever since it joined, British policy has been based on the imperative of being in the room when important matters are discussed,” said Charles Grant, director of the Center for European Reform in London, “so that Britain could either stop things happening or shape outcomes that suit Britain.”

“However, over the past year, it has become apparent that a new principle has emerged: to encourage the others to integrate, while we stand back, leave the room and adopt a semidetached relationship with our partners,” he said.

The 27-country European Union provides a single market for its member-nations’ goods and allows the unfettered transit of citizens across national borders, among other shared benefits. Those functions presumably would stay in place. But if it were to adopt a two-tier budget, it remains unclear on what the money would be spent or how the new structure would operate.

Nor is it clear how such a plan would play out in British politics. Although the opposition Labour Party has criticized Mr. Cameron in the past for what it considers his marginalizing of Britain’s role in Europe, Labour has not tipped its hand on whether it thinks there should be a referendum vote on Britain’s relationship with the bloc. Mr. Cameron could encounter more resistance from the Liberal Democrats within his own coalition government, who are more pro-European than Mr. Cameron’s Conservatives.

Talks on the next European Union budget are expected to culminate in November when European leaders will try to agree on a spending ceiling for the 2014-2020 period.

The European Commission, the bloc’s executive branch, has proposed a figure of up to 1.03 trillion euros, or $1.34 trillion, for all 27 nations. That compares with a ceiling of 975 billion euros for the current seven-year period. The proposed figure, though, is almost certain to be negotiated downward. With the Continent engaged in country-by-country cuts in national budgets, Britain has led calls for curbs.