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?”

And what of Britain?  What is the future in an outer ring of nations outside a core of 17 nations joined fiscally and monetarily?

In trying to answer this question I am conscious that I have always been, and remain, a pro European.  The EU supports trade and commerce and an incredibly positive cultural exchange.  True, it costs a lot but that is more than made up for by what we gain in trade and contracts.

I am also conscious that post globalisation the EU is an invaluable supra-national body, vital for international co-operation on issues like climate control and scientific projects.

But, most importantly I believe the EU (and its predecessors) is an absolutely crucial building block in what has kept the peace in Europe since World War II and what makes war seem almost unthinkable amongst these close knit neighbouring nations.

So what of the Euro?

I have always held the view that we were right to not enter into the Euro.  Oh, the principle seemed fine enough but only if monetary and fiscal policy was a good fit with our economy – which across so many countries and based heavily on Germany always seemed unlikely.  I thought Gordon Brown got it about right setting five tests to see if it was right to join, the first and most important of which said, ” are our business cycles and economic structures compatible so that we could live comfortably with Euro interest rates”.

Also, while I am a passionate believer in Europe and see it as far more than just a Common Market, I do not believe in a united states of Europe.  Nationalism is too potent a force to pull that one off peace-ably.  A close knit supra-national body and community of nations is how I see the EU.

This means I am glad we have not been part of the Euro.  I could never have foreseen this malarkey but it did not seem in our interests before.  Today, I think it is best we continue to keep out of it.

I suspect if the untangling can be done without excessive pain, one or two countries curently in the currency are best finding a controlled way to extract themselves.  This may be the best thing for all, not least the Greek people for example!

As it is these are interesting times for Europe and we must be careful that the EU itself does not unravel – which is a danger.

The Scottish angle in this is interesting. 

If Scotland were to become independent the SNP’s currency of choice would be Sterling.  Going into the Euro would be even more untenable now than when this policy was first made.  However, if we were to be part of a Sterling zone would it not be better if we got the vote for the body that decides fiscal policy that affects the currency – namely Westminster?  Does this not recognise we are part of a Sterling economy?  Is this not an indicator that we are a natural part of the UK rather than separate from it?  I would argue this helps to indicate that devolution within the UK is the most natural and the right constitutional arrangement for Scotland!

Independence in Europe, since the 1980s has been central to making Scottish independence seem more credible and less scary than outright independence maybe seemed in years gone by. If the future shape of Europe seems more uncertain, as I think is the case currently, then this strengthens the logic of being part of the UK.  Again, being an autonomous part of the United Kingdom is the way forward – Home Rule within the UK makes more and more sense to me.

I think in the current period Europe and the Global Financial Crisis are difficult ones for the SNP administration at Holyrood as they emphasise how they are in fact marginal to issues such as those crises and the the Sterling economic zone!