How Cameron’s kamikaze act could have been prevented

Did David Cameron deliberately manoeuvre the UK into splendid isolation last night, or was it an accident that could have been prevented? The latter, if the following account from someone who followed the proceeding closely is to be believed:

“I gather that the UK presented a whole draft protocol to the Council legal service the day before the meeting, detailing various subjects in the field of financial affairs where they wished decision-taking to switch from QMV to unanimity (some in areas that have been QMV from the beginning, and some that have been QMV since the 1986 Single European Act negotiated by Thatcher). Whatever the merits, presenting such a detailed document at the last minute in that way was not likely to work: one would have expected any such request to have been sent to every government and talked through extensively with them beforehand, if it were to have the remotest chance of being accepted.

A turning point in the meeting was when there seemed to be near consensus on Van Rompuy’s proposal to use Protocol 12, which can be changed by a (unanimous ) decision of the European Council without requiring a lengthy IGC and subsequent national ratification. Germany was the one that was isolated at that point, arguing for a fully fledged treaty. Then, the President asked whether Britain would want any “compensations” in this case too, or at least whether it might not need so many  (given that Cameron had said in the House of Commons “the more eurozone countries ask for, the more we will ask for in return”: logically a lesser demand should require less compensation). However, Cameron said that his demands would be the same. Given that there was no sympathy at all for his demands, this was the point at which the Protocol 12 route, which requires unanimity, was effectively closed down and one country after another accepted a new treaty at 17+.”

Without Cameron’s spectacular kamikaze act, the continuing disagreements between Merkel and Sarkozy would have dominated today’s news. Instead, he’s achieved the remarkable feat of uniting the eurozone, but at great cost to his own country and to himself.

Judging from reactions in the UK today, the enormity of last night’s events has only just begun to sink in. The BBC started the day with a headline that read: “EU-wide treaty change bid fails”. In the afternoon, it changed to “Eurozone deal reached without the UK”. Tonight, it’s “UK alone as EU agrees fiscal deal”.

Normally sensible commentators are seriously suggesting that Britain, already out, could now try to wield its veto power to prevent the other 26 forging ahead and making use of the EU Institutions in doing so. Prominent Liberal Democrats have spoken out in support of the deal. Which makes sense: Cameron couldn’t have exercised his veto without explicit authorisation from Nick Clegg.

But will the LibDems maintain their support for the British government position when it becomes clear that the UK is heading for the exit? And will the British population think again, now that an in/out choice has effectively been made for them by the coalition government, rather than in a referendum or at a General Election?

Victory for Europe, disaster for Britain

By Professor Simon Hix

At the EU summit in Brussels yesterday Britain lived up to its century old stereotype of “perfidious albion”; which Wikipedia describes as “a pejorative phrase used within the context of international relations and diplomacy to refer to acts of duplicity, treachery and hence infidelity (with respect to promises made to or alliances formed with other nation states) by monarchs or governments of Britain (or England) in their pursuit of self-interest and the requirements of realpolitik”.

When the rest of Europe needed a deal to save the Euro, the European economy, and the global financial system, Britain whined about some petty domestic interests.  Remember, most of the financial regulations the rest of the EU are talking about were actually proposed by Britain to the G20 as a way of saving the global economy.  And also remember that Britain already has a “financial transactions tax” in that stamp duty is already paid on most financial transactions in the UK.  So, what exactly was Cameron trying to veto?  I just don’t get it, and nor does anyone outside a few crazed Europhobes on the extreme right of the British Conservative party.

So, the result is beautiful isolation, as 23 EU states set up a fiscal union.  This is inevitably a slippery slope to Britain’s exit from the EU and the single market: a major I victory for Merkel and Sarkozy, who called Cameron’s bluff.  The Czech Republic, Hungary, and Sweden will in all likelihood join the other 23 states.  After all, Denmark – the only other state with an opt-out from the Euro – has already agreed.  This is likely to lead within a year or two to a new treaty to replace the EU, amongst 27 states in Europe (the other 26 in the current EU plus Croatia).  Forget the European Union, the new European agreement will be a “European Fiscal and Political Union” with only the UK, Switzerland, Iceland and Norway on the periphery – rather like Puerto Rico in relation to the United States.

If this happens – which in effect is Britain being kicked out of the EU and the single market – the consequences will not only be huge for the British economy (since over 50% of our trade is with the rest of the EU), there will be knock-on effects on British public finances, as markets turn their focus away from a more stable Eurozone to UK government debt (which is already worse than Greece), and even an effect on the sustainability of United Kingdom.  Britain’s exit from Europe would be a huge boost for the campaign for Scottish independence.  A majority in Scotland may well decide that it would prefer to be one state in a European federal union than be tied to a moribund and bankrupt administration in Westminster and Whitehall.

So, how stupid will Tory Eurosceptics look in 5 or 10 years time, with “Little England” outside Europe, a collapse in British exports (as a result of exclusion from the European continental market), a gradual shift in Europe’s major financial centre from London to Frankfurt, skyrocketing government debt as markets demand 5% interest on British government bonds, and an independent Scotland?

Simon Hix is Professor of European and Comparative Politics at the London School of Economics and Political Science and Fellow of the British Academy.