Tuesday, 15 November 2011

Angela and Dave fight it out over EU's future

It’s the fundamental question facing the EU today: should the union integrate, or disintegrate? In two duelling speeches yesterday the British prime minister and the German chancellor took polar opposite positions on the answer.

David Cameron’s speech, delivered just hours after Angela Merkel delivered a speech to her conservative CDU party conference calling for further European integration, appeared to be a direct response to the German chancellor. Describing himself as a Eurosceptic, Cameron said the EU had overreached in its ambitions and that the euro crisis is "an opportunity, in Britain's case, for powers to ebb back instead of flow away and for the European Union to focus on what really matters".

Merkel’s speech hours earlier had delivered the opposite message. Telling the audience that Europe faced its greatest challenge since the second world war, she said, “The task of our generation is to complete economic and monetary union and build political union in Europe step by step…that does not mean less Europe, it means more Europe.”

Considering the influence of the UK in Europe compared with the influence of Germany, it was a bit like a pygmy picking a fight with a giant. Cameron’s argument may find a sympathetic audience with the British press, but among national governments – even those in his ‘Northern bloc’ – the idea that the crisis is an opportunity to pull Europe apart is not very alluring. But whether or not the UK actually has the influence to sell Europe on the idea of downgrading the EU to merely a free trade zone, the fact is this may happen anyway. But few outside Britain would describe this as a desirable outcome.

Today, the CDU fought back. Volker Kauder, the CDU leader in Germany's parliament, blasted the British approach to the euro crisis. "Just looking for their own advantage and not being prepared to contribute -- that cannot be the message we accept from the British," he told the audience. He was referring both to the British Conservatives' desires to use the euro crisis as an opportunity to repatriate powers to London and to their opposition to the financial transaction tax proposed by the commission.

His remarks have already sparked a furious reaction in the British press, with the Daily Mail accusing Merkel of expecting Britain to "fall into line" with Berlin like all other EU countries do. Many Eurosceptic commentators are writing that with the EU moving toward closer integration, this is the perfect time for the UK to exit stage right. Merkel and Cameron are set to meet on Friday, an occasion which will surely be frought with tension as the two leaders drift further and further apart on their ideas of how to resolve the euro crisis.

'Neither side has their priorities right'

It isn’t just other European leaders who don’t share the view that the EU should see the euro crisis as an opportunity to dismantle itself. Cameron’s deputy prime minister Nick Clegg hit back today against Cameron’s speech in no uncertain terms. Speaking at a press conference with Dutch Prime Minister Mark Rutte (a not insignificant detail), he dismissed Cameron’s call for unilateral repatriation of powers as unrealistic. “It's not possible, and Europe doesn't work like that,” he said.

At the same time Clegg suggested that Merkel’s calls for treaty change in order to bring about closer economic union were also a step in the wrong direction. He said European leaders need to be focused on jobs and economic growth, not fundamental questions of the EU’s future. “The danger always is that the debate becomes very quickly polarised between one side which says this is the moment to rush headlong towards further integration, new treaties, new intergovernmental conferences, new arcane debates about EU powers, and another side that says this is the moment to unravel the whole thing,” he said. “I don't think either side have got their priorities right."

“Is the whole political establishment now going to disappear into a windowless room in Brussels, discussing things that no one can understand?” he asked. “It means absolutely nothing to millions of people across the EU who are worried about economic security. They are worried about prospects for their children. The only people who will benefit will be populists, chauvinists and demagogues, who will exploit that lack of political leadership."

Clegg may be worryingly right about his latter point. But Merkel is also right that the institutional causes of the euro crisis – the fact that the European project was unfinished and the attempt to have a monetary union without an economic union didn't work – have to be addressed. Mistakes were made, and now the euro is hanging by a thread as a half-finished project. The choice now is to finish it, or abandon it. Either choice will require treaty change. Both Cameron’s road and Merkel’s would require this unpleasant process. And as recent events have proved, to do nothing is no longer an option.

Clegg’s instinct that a protracted battle on treaty change will cause public disquiet is probably correct. And yet leaders may have no choice but to forge ahead with that battle whether they want to save the European project or abandon it. The ensuing deadlock and complications may open the door to the populists, chauvinists and demagogues Clegg fears.

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