Mr Cameron’s challenge…
The Prime Minister is in the unenviable position of trying to appease Tory backbenchers whilst trying not to alienate Europe; I must say I’m not sure he’s succeeding at both. There seems to be a huge wave of support for his stand veto at the Euro summit on Thursday, many will see this as the defiant stand of a strong Prime Minister, finally listening to the views of the people who elected him. There has however been a considerable backlash despite the support of some members of the press as well as the majority of Conservative MPs. The Deputy Prime Minister has decided that he is angry about it, and this, if the Mail is to be believed (don’t laugh), could, more than the question of AV, be the make or break issue for the Coalition; this is something that Danny Alexander has strongly denied.
I will leave my colleagues to debate the ins and outs of what this means for domestic politics and the future of the ConDems, but what does the will Cameron’s use of the British veto mean for our future relationship with Europe? First of all, I can imagine that a great many Eurosceptics will be scratching their heads, one minute David Cameron is telling them he will not consider the possibility of a referendum on Europe, and the next he is vetoing the Treaty for Fiscal Union and vexing almost every other European leader in sight. Some say however that the actual act of the veto is not what has angered the Europeans, according to Boris Johnson, it is the fact that the veto forced them to confront some rather uncomfortable home truths about the flawed nature of a monetary union without a political union. He argues that you can’t have one without the other, rather like trying to put the roof on a house without walls, it is simply destined to failure. Louis Armitstead however argues that it was not even David Cameron who eventually made the decision; she suggests that, with a cunning stroke of Machiavellian artistry Angela Merkel backed him into a corner for which the only politically face-saving option was to use his veto. Armitstead writes that by including a commitment to establish a Financial Transaction tax in the treaty, Merkel and Sarkozy forced Cameron’s hand. Had he gone alone with such a measure there is the danger he would have been accused of endangering the survival of the City, not a very appealing prospect for any Prime Minister, let alone a Conservative one! The veto is for David Cameron, she goes on, what the rebate was for Margaret Thatcher.
As for the British economy and what the veto means for them, well, some pundits seem to think that City bankers will have gone into apoplexy after such an act. They seem to think that Cameron has launched Britain into the abyss, that all the important decisions will be made without our involvement and we will be cast adrift whilst Europe recovers and we continue to flounder. Leading members of “large European banks” however, have taken a more phlegmatic approach to the whole issue and have said that they could not envisage a shift away from the influential grip the City has over Europe, “Deutsche would never leave London, as this is the banking centre of Europe…London has many advantages – less strict job laws, less taxes etc – therefore there will be no repositioning of Deutsche.” So we can see that few investors might be jittery at the moment, but no more than they have been in the last few months, when there are few European countries left which have not been bailed out by Germany. Manufacturers however have admitted that,in the short-term at least, the veto should not affect Britain’s trading relations with Europe. The longer term still looks uncertain, but it is difficult to say how more or less uncertain it would have been if Britain had not used her veto.
It is still too soon to tell if David Cameron’s veto was a positive thing for Britain. Boris Johnson suggested that the changes that the European Leaders were suggesting, i.e. giving many more powers to a new and unelected European body could be, as Sir Humphry might have put it, a rather ‘courageous’ move on their part, and so perhaps it is better that we have as little to do with it as possible. On the other hand, if all the other European countries endeavour to create closer economic ties, there is a danger that Britain might be left out in the cold altogether, however, since we have fewer restrictions in our economic sector this seems unlikely. Ultimately one has to wonder who can have confidence in a currency that even the principal architect has said is doomed to failure. Earlier this month, in a scene reminiscent of Dr Frankenstein denouncing his monster, Jacques Delors condemned the actions of the European leaders as “too little, too late”. Maybe therefore, it is not the act of the veto that Merkel, Sarkozy, et al, were annoyed about, but rather the fact that it brought disharmony to the proceedings at a time when trying to do anything to save the Eurozone is proving difficult. It was an extra issue they could have done without, because they know inevitably, they are fighting something of a loosing battle. With Moody’s sniffing around, and planning to scrutinize European credit ratings across the board, what they didn’t want was someone rocking the boat.
Posted on December 12, 2011, in Comment, Foreign Affairs, General and tagged Angela Merkel, Boris Johnson, conservative party, david cameron, europe, eurozone, Financial Transaction Tax, France, Germany, Treaty for Fiscal Union, Veto. Bookmark the permalink. 1 Comment.