I do not yet know what to make of what happened in Brussels last week and what the consequences will be for the UK as a result
My feelings are these:
1. I think the EU has failed to reach an agreement that will solve the current financial crisis. I think this agreement will fail to save the Euro.
2. I have some concerns that the aim of European leaders is a little too much to save banks that have loaned money to various European states rather than about saving any national economy. There is a little too much of the poor paying the price for this global financial crisis.
3. I have some concerns that the French are no friends of the importance of London as a financial centre and wish merely to curtail its power. I also think the French have a bad habit of thinking France and Europe are synonymous.
4. I worry that with the Euro, fiscal and monetary policy is basically aligned to what suits the German economy and that it is almost the case that a common European currency may as well be the Deutschmark. This isn’t necessarily a bad thing for every economy, but I doubt it would ever work well for the UK economy (and incidentally I doubt it would be right for any independent Scottish economy, should that ever happen, in the future)
5. I think France and Germany were trying to get Britain to bail the Euro out. I believe the UK should participate in doing what needs to be done to bring financial stability but we are not part of the Euro and should not bail it out.
6. I think David Cameron went over there to veto the deal and to appease the many Euro sceptics in his party. There are rather too many Euro sceptics in his party and their Little Englander nationalism is not good. I think, therefore he was far too quick to veto and could have taken a far more subtle approach. There was no win-win created.
7. In fact I think David Cameron was somewhat out manoeuvred by Sarkozy and my impression is that he has not done a good job with his diplomacy – rather overplaying his hand and getting a quite unnecessary result.
8. In actual fact we have vetoed the Euro Zone doing something we don’t mind – the Eurozone working within the EU to support their fiscal union.
9. However, in doing this we have failed to stop something we do in fact mind – the 26 countries acting as a bloc on single market issues with the UK on the outside. This is not good. It is not good for the UK long term and it may damage our trade and industry.
10. I argued previously that we are right not to be part of the Euro – a currency zone that does not work for us and is, and seems likely to remain, inherently unstable. It is right and very important that we are part of a supra-national body like the EU that is far more than a free trade area, but stops short – and always stops short of full integration. Our global relations and flexibility – especially openness to the growing far east and so-called BRIC countries remain important.
This may be a watershed moment. It is just possible that Europe may never be the same again. If this all means a two tier Europe, then so be it (I’m not sure how the Euro Zone will play out anyway). However, we must remain an integral part of the EU and we must work to achieve our interest within it and to take a lead. France are too self interested to be left alone to it and so, in the final analysis, are Germany.
The EU needs us and we need the EU. It is important that we avoid total isolation because there are trade deals to be done and diplomatic influence to be wielded – if we have any left! To this end, as a puzzle what happened and where that leaves us I am asking, “David Cameron, what was that all about?”