While Europe’s house is on fire, the British Prime Minister tried to loot some of the family silver and sneak out through the back door. The very fact that he expected to get away with it shows that he is no Margaret Thatcher. Meanwhile the British press reduces all this to crass old clichés of Britain standing up alone against German bullies and French plotters showing how toxic the debate has become in the UK. The Tory right has created its own Tea Party movement with similarly disastrous consequences for the country.
The irony of all this is that Cameron brought together a united front against Britain on the Continent and pushed the other 26 into creating the very instrument that will allow them to clip the wings of the City. Until now the UK has always found enough partners among liberal minded member states within the Council, like the Netherlands, the Czech Republic and the Scandinavians to protect financial services. Now however its rejection of the Treaty amendment forces the others to create another regulatory structure outside the EU where Britain has no voice. True, at the moment this legal framework is disputed and many details remain unclear. However the extreme stakes at hand will force the 26 to make it work on an intergovernmental level. Once this fiscal union is up and running on a quasi-EU level, it can be used to introduce all those regulations through the back door that the UK successfully blocked in the EU. Without the UK championing the interests of the City, the remaining liberal minded countries will have neither the cohesion, nor the interest to protect financial services from stricter regulation – and obviously such regulation will not favor the city, but Frankfurt and Paris.
This is not going to happen tomorrow but in a few years time – but investors understand it, thus investment decisions as of tomorrow will have to take account of this risk. Without access to the European Continent, the City loses one of its main competitive advantages.
The question is only whether the Tory Tea Party has forced Cameron into this corner or was it his tactical error. One must admit that the British Prime Minister is under enormous pressure at home – some of the loudest eurosceptic politicians of his party regularly label the UK Permanent Representative in Brussels a traitor, leaving no space for any informed debate even in the Government. (This also shows the increased politicization of British civil service for which the blame should fall on Tony Blair.)
However the final decision of European leaders to stand up against Cameron’s blackmailing tactics was taken just a day before the European Council in Marseilles at the pre-summit meeting of the EPP heads of states and governments. Had Cameron not left the European Peoples’ Party in 2009, he could have been there (like Thatcher) and stopped the united front forming against him.
Cameron has successfully fought off a brewing rebellion in his party and dealt a blow to UKIP at the same time. This will strengthen his position for now. In the mid-term however he has started digging the grave of London as a financial centre. Considering the state of the economy, this may cost the Tories the next elections.
In Brussels protectionists can light their bonfires and all of us who believe in Europe should start grieving for good old Britain of Churchill and Thatcher.
Is this the first blog entry? Or is there a problem with your archive?
rz, you just stumbled onto my first ever blog entry