EU Veto: The Backlash

It is interesting to try to analyse quite why our European partners — most notably Merkozy — have responded in quite the way they have to Cameron’s historic veto.  Sarkozy’s petulance was hilarious to watch.

Boris Johnson (whom I seem to be quoting rather a lot these days) has a simple explanation.  Merkozy just can’t forgive the Brits for being right all along about the €uro.  Major negotiated the €uro opt-out, and eurosceptics have been making the case for at least fifteen years that the €uro was fundamentally flawed and could not succeed.  Cameron on Monday in the House quite rightly avoided any tone of triumphalism, but we are surely entitled to some quiet satisfaction when after all those years, and all those brickbats, we are finally, utterly and overwhelmingly vindicated?

So the search is on for scapegoats, and who more obviously guilty than those pesky Anglo-Saxons?  It was in the City of London that evil speculators targetted the cracks in the €uro structure, while London’s deep, liquid capital markets enabled them to do so.  it was Anglo Saxon scepticism (Merkozy would say hostility) to the €uro project that drove the débâcle.  We may eschew triumphalism, we may try not to gloat, but they know we were right, and it rankles.

Now they’re saying that Cameron has sabotaged the great €uro rescue, and threatens not only the European but even the global economy.  Obama apparently believes that the British veto is bad news for his re-election next year.  But they’re all doubly wrong: first because the eurozone can go ahead with its rescue attempt without the UK.  Nothing we have done will block that attempt, and indeed Cameron has made it clear that we support attempts to save the €uro (though there, I think, he’s mistaken).  And secondly, the plan to save the €uro is utterly lacking in substantive content, and cannot succeed, with or without the UK.

Jacques Delors, that voice from the last century, has popped up to assure us that the original concept was just fine, but those politicians to whom he entrusted his legacy were guilty of flawed execution.  If only they’d been a bit stricter, if only they’d kept to the Maastricht rules, if only they’d audited the accounts in Athens a little more carefully, all would have been well.  But all that his intervention shows is that even now, with full benefit of hindsight, he just doesn’t understand it.  He was the prime mover in one of the most irresponsible political experiments of the post-war era (hat-tip Lord Lawson), yet he still doesn’t get it.  So perhaps it is no surprise that he got it wrong to start with.

The fact is that failure was not just an accident along the way.  It was baked into the pie.  It was hard-wired into the system from the start.  Indeed they would have known that, if only they’d read the economic reports that they themselves had commissioned.  The McDougall report of 1977 said that a successful monetary union would require massive fiscal transfers (between 6 and 8% of EU GDP) to resolve the inevitable imbalances.   Yet Delors ignored that advice, and Merkel today is clearly resolved not to have Germany pay for vast on-going bailouts for half the eurozone.

Of course even the fiscal transfers would not have been sufficient in themselves.  The EU would require much higher labour mobility than exists — indeed more than can exist given linguistic barriers in Europe.  And above all, it would require that sense of common identity and political cohesion which exists, say, in the USA, where they all salute the same flag.  The lack of that political identity in Europe, despite half a century of relentless integrationist propaganda, is a key reason why a single currency cannot work — and why “democracy at the European level” cannot work either.  As Enoch Powell famously observed, there is no European “demos“.

Then we have Nick Clegg — “Pigmy Clegg”, as he will now be known — who rushed to the TV studios as soon as the news of the Veto broke, to support the Coalition and Cameron’s action, but a day later was expressing his desperate disappointment with a deal that was “bad for Britain”.  A man wholly without principle (except knee-jerk support for Brussels), blown about by the latest critical comment.  Like an old armchair, he bears the imprint of the last person who sat on him.

The usual suspects are trotted out — Lord Oakeshott, Paddy Ashdown, Heseltine, Clarke — to tell us that the Veto will leave us “isolated and marginalised” in Europe (the threat used to be that on leaving we’d be isolated and marginalised outside), that the Veto would be bad for jobs, bad for inward investment, bad for growth, bad for the City, bad for the Pound, bad for the Coalition, bad for the Conservative Party, bad for Auntie Marjorie and everyone else.  Fortunately an overwhelming majority of the British people seem to think, according to the polls, that the Veto was a thoroughly good thing, and I agree with them.

We’ve been here before.  Cameron may be the first British Prime Minster ever to wield his Veto (and well done him).  But there was a very similar reaction when John Major demanded, and obtained, his Maastricht opt-out twenty years ago.  We should be isolated and marginalised.  Britain was again clinging to the memories of independence and past imperial glories, and failing to embrace the future.  We would lose jobs, growth, inward investment, prosperity, we would be isolated and marginalised, reluctant to embrace the future, to join the great project that would dominate the 21st Century, to be part of the new Global Reserve Currency which would knock the dollar off its pedestal.

I’m sorry, Nick (and all the rest of that diminishing bunch of True Believers).  But we’ve been here before.  We’ve read the book.  We’ve seen the movie.  We’ve eaten the pie.  We know how it ends.  And we’re not going there again.

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6 Responses to EU Veto: The Backlash

  1. Mike says:

    It is so refreshing to read a blog like this after all the waffle and bluster of Newsnight yesterday. Actually, I go on Labour List and it was interesting to read people on there grumbling about BBC bias too!

    Now (thanks to your blog and a post thereupon) I have seen what Mr Cameron was expected to sign up to, I realise that he quite simply had no alternative. No wonder they are so angry though – we are talking about him putting in £150,000,000,000 or thereabouts, the same sort of money as Germany, France and Italy (now controlled from Frankfurt).

  2. Interesting times Roger. But whatever else we might have been, we are not Anglo Saxons, in any significant way genetically. And we do not speak ‘Anglo Saxon’ apart from a few choice words and place names.
    There is a limit to how many people that can fit into longboats, and there were not huge numbers of those. (Most of the occupants would have been men anyway, with obvious results.)

    • Thanks Fenbeagle. Of course you’re right in historical and ethnic terms. But “Anglo Saxon” is now widely and loosely used to describle a calssical liberal, pro-market world view. I am using it in that sense.

  3. Mr. Green says:

    Nicely expressed Roger.

    There are several issues that rarely see the light of day on the BBC, or elsewhere in the media.

    The FT used to produce a nice league table showing how many EU directives have been implemented by each Member State. The UK was in the top three, usually.

    If you link this to net contributions to the EU budget the UK would be assessed as one of the ‘better’ EU Member States.

    I heard Andrew Neil ask a politician why we fixated so much on EU trade when 97% of our trade was covered by the rules of the World Trade Organisation.

    And with UK foreign trade no-one seems to mention the massive trade imbalance in favour of the EU.

    Personally I lost faith in this whole EU thingy when pictures emerged of imported Welsh lambs being burned alive on French dockyards all those years ago. The French police looked on impassively. Try that in Dover and you would rightly be prosecuted for animal cruelty. When I mentioned this atrocity the quiet, dismissive shrugs from my European friends spoke volumes. Where’s this famous solidarity when you need it.

    And another thing. Historically the UK would have fewer laws and regulations, and respect for the law was fairly good (a generalisation I know). On the Continent there are rules and regulations about everything (the Napoleonic Code). So people feel psychologically free to ignore the stupid ones, which are usually the ones they don’t agree with (or are not in their interest). This goes especially for the EU directives.

    Lastly, our efficient farmers and our useless manufacturing make us unfitted for EU membership, where massive subsidies are given to farmers and manufacturing is soft-pedalled as German and French manufacturing is more efficient than ours.

  4. Sue says:

    That one action gained the Conservatives 2 million new voters

    Which begs the question : Does he think “the EU” isn’t an issue with Britons now?

    ” Bankers in London, home to Europe’s biggest stock exchange, derivatives market and asset-management business, have a message for European leaders looking for greater integration: We’re happy to go it alone!”

    The people who are unhappy are the Europhiles and Libdems and most of them have something to gain by being so (pensions, jobs, future jobs etc… )

    If Cameron needed more evidence to call a referendum than this, he is not a good leader.

  5. Mairin says:

    Wonderful missive Roger. shout it from the roof tops please,
    And why does the BBC and Fibdems keep insisting that we are isolated , unfortunately we are still members of a fraudelent body and Osbourne will still attend the monthly finance meetings so what is their problem?

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