Friday, 9 December 2011

9 December 2011: The day Britain left Europe

David Cameron emerged as the villain of the hour in the early hours of this morning as news broke that after tense all-night discussions, the UK has vetoed treaty change to save the faltering euro. The meeting then went to plan B, forging ahead on a new treaty with just the 17 countries of the eurozone. But nine non-eurozone countries then said they would also sign the new treaty, leaving the UK as the lone one out. This may sound like a small detail, but in reality it is huge. As the world press is reporting this morning, this effectively means the UK has begun the process of leaving Europe. And even the UK’s usual allies in the American media were aghast.

“UK Threatens Eurozone” headlined ABC News this morning. “UK to Euro nations: We’re out, good luck” heralded CBS News this morning. The reason for Cameron’s veto is bound to make him even more unpopular globally. In order to give his assent to the treaty change, which would not have affected Britain but only the countries using the euro, he demanded that the UK be given an opt-out from proposed increased regulation on banks and financial traders. That financial transaction tax (or 'banker tax') proposed by the EU earlier this year had nothing to do with last night's negotiations.

France and Germany balked, and Cameron walked. As one journalist friend noted last night, "The UK has refused to help solve the crisis because it wants to help the banks who started the crisis." Because the other 26 members walked away and went ahead without Britain, it means the financial transaction tax is still on the table, and the situation on that issue is unchanged from what it was before the summit. Cameron walks away with nothing.

Putting the global economy at risk in order to protect London City traders may not be the most popular stance given the current economic crisis. And Sarkozy emerged from the meeting this morning eager to exploit this. “You cannot have an opt-out and then ask to participate in all the discussion about the euro that you did not want to have, and which you also criticised,” Sarkozy declared to the press after emerging from the meeting at 5:30 this morning. It took Cameron a full half-hour after Sarkozy spoke to comport himself and figure out what he was going to say in his own press conference.

Cameron’s intransigence may please his eurosceptic backbenchers, but it will enrage his global allies and the markets. It will also have serious consequences for the future of the EU and Britain. The eurozone states, plus nine others who do not use the euro but will join the pact anyway, will form a new treaty for a fiscal union. That leaves only the UK outside of this bloc.

As the Economist’s Charlemagne blog noted this morning, this is effectively the beginning of the end for the UK’s place in Europe – it is a divorce. The tigher union formed by all the other EU states will move ahead if the specifics are ironed out today.

The UK will now either have to leave the EU, or watch the EU become an irrelevant skeleton of its former self while the eurozone moves forward as the new federal entity. This is what Sarkozy has wanted for a long time – an EU without the UK constantly saying no and slowing it down. It looks like he is now getting his wish, which explains why he was looking so confident at last night’s press conference. Cameron, not so much.

It's a bit like that episode of The Simpsons when Homer joins the "Stonecutters" (a send-up of the Freemasons). When the rest of the members have had enough of him, they form a new organisation called the "Ancient Society of No Homers", leaving Homer as the lone member of the Stonecutters.  The rest of the EU is going to form their own club, and leave the UK behind.

Of course even the 26-country deal could unravel today – the details still need to be worked out. But the lines have been drawn, and the future of a two-speed Europe has been decided. Cameron will go back to Britain this afternoon, while the remaining EU states stay to take the decisions that may or may not prevent the collapse of the global economy. The UK has been left isolated and on the outside, looking in.


Gulfstream5 said...

Nah, David Cameron backed up by George Osborne (Chancellor) and William Hague (Foreign Secretary) constitute the best team we've had running this country since the days of Churchill. No doubt they didn't want to see this country dragged down any further by the hopelessly overbureaucratic, overborrowed, overtaxed, interfering and bankrupt EU that has been helping itself to our taxes for so long. About 8 dollars per US gallon for gas over here, remember? I bet the US would never have joined the EU in our postion.


Anonymous said...

@Gulfstream5 What are you on about? Fuel taxes have nothing to do with the EU. The level of ignorance in the UK about what the EU is and does astounds me. I say the UK leaving the EU is good news, they have done nothing but hold it back, they are hopeless and I wish them good luck with their future irrelevance.

Anonymous said...

"they have done nothing but hold it back, they are hopeless and I wish them good luck with their future irrelevance."

This was only ever a PR exercise, blaming the UK for EZ failure to sort out its own mess. Britain may have fared badly in the pathetic PR exercise but wins where it matters: a financial centre protected from poorly-disguised (and unashamed) French attempts to steal more British wealth. If acting to support free trade and counter Franco-German attempts to dominate through fiscal union and Lebensraum is ‘holding it back’, that can only be a good thing.

There is certainly more hope for the UK outside the EU than in; just ask Norway and Switzerland, the most prosperous nations in Europe and neither is in the EU. Strange that, isn't it? The UK has the financial centre of the world, pharmaceuticals, chemicals, services. Europe has ... ehm, the euro. Good luck with that and your future irrelevance!

Anonymous said...

The delusion of the British never ceases to amaze me. The idea that you think your economy even remotely compares to that of Germany is laughable. Norway and Switzerland are not in the EU BECAUSE they are extremely wealthy, not the other way around. Switzerland wants to protect its private banks, Norway wants to protect its oil and Iceland wants to protect its fish. Britain has nothing to protect - its financial services industry does not rise to that level and in any event if they ever left the EU all of that would move to Frankfurt.

The British are always using this example of Switzerland and Norway, but what none of them seem to realise is that both of these countries pay into the EU in order to participate in the common market. The UK's contribution to the EU would be the same whether they were part of the EU or just part of the common market like Switzerland and Norway (which anyway have to follow 80% of EU law). So all that would change is that the UK would no longer have a voice in the common market it is ruled by and pays into.

No wonder Scotland wants to separate from you idiots