So I was up early this morning. Way too early for my liking. I flick through my iPhone in bed and see on twitter that big news was coming down that we had used our powers of veto and not signed up to a new treaty that it was hoped would save the Eurozone. The reasons we have used our veto seem pretty clear. The deal would actually harm the UK but strengthen Europe.
As the UK is not in the Euro our viewpoint was always going to be different from the French and the Germans who are busy forcing through urgent changes. Germany want it to safe the Eurozone and the French (Sarkozy) want it because they (he) want to save their (his) jobs. Having David Cameron be the public bad guy works out great for Sarkozy as whatever happens he can point to it in presidential race which will go down well with the natives.
However despite this should the Eurozone fail it will hit us hard so we can’t be flippant. David Cameron is pretty centralist as Europe goes and he did discuss the situation with his Deputy and his Chancellor. So it wasn’t a unilateral decision and the Lib Dems were involved. This though has of course stirred the twitterari as they are a) happy that their party was involved but b) unhappy they were involved. Being a Lib Dem and having some actual influence is a hard thing for party members as we are used to railing against the man. Now we talk and debate with the man and that just isn’t as much fun.
I saw a City of London analyst on Sky News this AM say that 37% of the World’s financial sector business outside of the Far East and the US is done in London. Is is by far the busiest hub of non Far East and US financial business and this is despite the UK not being in the Eurozone so any changes to conditions in the City of London would have a huge effect. Remember this treaty wasn’t about the EU as a whole but about the financial sector aspect of the EU. We still have a voice at the EU table although now it’s more than likely they’ll be bloc voting of the ‘in’s’ and ‘out’s’ of their accord.
Next though is the question of whether or not this accord is legally binding? From all I’ve read and seen on the news this AM it seemingly will not be (but that of course isn’t known yet either way). If it isn’t then what is to stop one or more of the countries floating the rules to get more business? Not a lot. If 23 countries are all playing happy families then good times but all it takes is for one or two to take their ball back and play the game their own way for political reasons and the house of cards topples to the floor again.
Do I trust all of the leaders of Europe to play nice for ever and ever? No. Do I feel that they can play nice for a year or two? Of that I’m even unsure. The Euro crisis is spreading like a wildfire and today three of the top French banks have had their credit rating dropped. As it currently stands the UK is feeling the pinch but the wildfire is being doused by the English Channel. Had we gone all in to try to save the Eurozone without ensuring our financial sector survived then that would have been reckless.
I know there are far more clever people out there who know what they are talking about. I’m just a relatively ill-informed bystander but from what I’ve read the veto probably had to be used. The French were desperate to have everything their own way. The Eurozone needed the UK more than the UK needed the Eurozone but they needed the UK to give a lot more than it was going to get.
The Eurozone needs to survive. Of that there is little doubt. However was their proposed treaty definitely going to save the Eurozone? No. Would it have enhanced its chances of survival? Probably? Enough that it was worth us risking our place as the hub of the financial sector outside of the Far East and the US? I think not but that is something that will be debated for years.
I have long been a proponent of a stronger and united Europe but not at all costs. The UK would not have entered this treaty on a level playing field. It came to the table in a strong bargaining position and were unable to get what they wanted but they were also unwilling to give up what was desired. So it was stalemate and now we are outside the tent pissing in instead of the preferred position of being inside and pissing out. It’s not ideal but considering the options and the Eurozone wildfire it might be the best of a bad situation.
Nick Clegg has now spoken:
I regret that last night it proved to be impossible to find a way forward as a group of 27 on European treaty change.
I have said for months that it would be best to avoid arcane debates about treaty change altogether and if we had to proceed down that road, it would be best to do so in a way that did not create divisions in Europe
The demands Britain made for safeguards, on which the Coalition Government was united, were modest and reasonable. They were safeguards for the single market, not just the UK.
There were no demands of repatriation of powers from the EU to Britain and no demands for a unilateral carve-out of UK financial services.
What we sought to ensure was to maintain a level playing field in financial services and the single market as a whole. This would have retained the UK’s ability to take tougher, not looser, regulatory action to sort out our banking system.
As a lifelong pro-European, I will continue to argue within Government and with our European partners that where changes now occur, it is essential that the integrity of our open European single market is kept intact and that we work together on the long term problems of competitiveness within the EU on which millions of people’s jobs depend.
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