The pledge
“No further powers should be transferred to Brussels without a referendum … we will amend the 1972 European Communities Act so that any proposed future treaty that transferred areas of power, or competences, would be subject to a referendum on that treaty – a ‘referendum lock’.”
Coalition agreement, May 2010

The background
The E-word, Europe, haunted the last Conservative Prime Minister, John Major. Could it give David Cameron sleepless nights, too?

For months now, Chancellor Angela Merkel has been arguing that she wants action taken to ensure that Germany doesn’t again find itself in a situation, as it did with Greece, where it’s expected to bail out a fellow eurozone member that’s fallen on hard times.

In Brussels today, EU heads of government agreed to her plan for a new “permanent crisis mechanism” that should mean this never happens again, assuming it works.

The analysis
There are two options for putting this mechanism into effect: a new treaty, which would have to be ratified by national parliaments, and referenda if member states chose to go down this road.

After their bruising experience during the ratification of the Lisbon Treaty, many member states argued against this.

Instead, they agreed to follow option two: a process created by Lisbon called the “simplified revision procedure”.

This applies when it’s agreed that new rules just need a treaty change, rather than a new treaty.

In theory, it means ratification by national parliaments/referenda won’t be necessary.

Now this “simplified revision procedure” has been agreed, the Coalition Government is able to argue that a new treaty isn’t being created and so a referendum doesn’t apply.

It can also claim that the Merkel mechanism only applies to members of the euro and Britain isn’t affected.

Here, it’s likely to hit problems – and this is where memories of Major come into play.

Conservative Euro-sceptic MP Douglas Carswell believes the new mechanism means powers being transferred to Brussels that will affect Britain, even though the country isn’t a member of the eurozone.

One example he cites is the decision to give the EU scrutiny over all member states’ budgets, not just those that are members of the euro.

As a result, Mr Carswell argues that the Government, which is “desperate to imply there’s been no significant change”, is duty bound to hold a referendum.

John Major had a tough time with his Euro-sceptics. Does Mr Cameron have anything to fear?

The Prime Minister has been hailing his success in Brussels for winning support for a three per cent rise in the EU budget, despite arguing for a freeze before the summit.

When these calls for a freeze were debated in the Commons on 13 October, Mr Carswell put forward an amendment calling for the EU budget to be cut.

Government whips mounted an operation to stop them, but 37 Conservative MPs backed this amendment.

The verdict
Assuming member states follow the  “simplified revision procedure” and a new treaty isn’t needed, the Coalition Government will say there’s no onus on it to hold a referendum.

But Euro-sceptic Conservative MPs won’t give up without a fight. As the Major years revealed, if there’s one issue where the cause comes before party loyalty, it’s Europe.

Today’s agreement is unlikely to be the end of the matter. Watch this space.