OK, Brussels, let’s make a deal!

There’s an interesting situation shaping up in the EU.

For months now, Angela Merkel has been coming under increasing pressure to mutualise debt in the eurozone.  “Mutualise debt” sounds innocent and technical, but in plain terms it means Germany agreeing to underwrite everyone else.  Not surprisingly, German voters don’t relish that idea — and on the face of it, the German Constitution doesn’t allow it.

Yet it goes to the heart of the €uro problem.  A single currency can’t survive without a lender of last resort.  In the end, that lender can only be Germany — or the ECB backed by Germany.

Merkel is being beat up on not only by EU member states, but increasingly by President Obama (still hoping for re-election) and even by China.  So she’s looking for a compromise.  She might manage some cautious moves in the direction of debt mutualisation, but in exchange she wants her fiscal pact enshrined in the EU Treaties.

It’s wonderfully ironic.  The Lisbon Treaty was supposed to be a settlement for all time, or at least for many years, yet there are immediate demands for new treaties.  It’s also difficult to understand Merkel’s apparent confidence in Treaties.  After all, the Maastricht Criteria were enshrined in the treaties, and much good it did them.  In the EU, de facto beats de jure every time.  It’s easier to edge over your borrowing limits than to cut pensions.

Be that as it may, it looks as though a new Treaty is on the way, designed to include fiscal rules for the eurozone.  This could be a huge opportunity for the UK, as we’d be asked to sign up.  It is difficult to see how the Government could refuse a referendum on such a treaty.  You can hear their excuses already “Well the fiscal rules only apply to euro members, so it doesn’t affect us”.  But I don’t think the people, the media or Westminster will let them get away with them.

This is our chance to renegotiate.  We’ll give them what they want, so long as they give us what we want.  Ten years ago, I’d have been happy to settle for the reinstatement of the Maastricht opt-outs (especially on employment law) plus fisheries and some bits and pieces.  That will no longer do.

The only renegotiated deal that I’d be prepared to recommend to voters, and to support, would be a pure free trade deal.  Absolutely no political or regulatory involvement with Brussels.  Period.

There are of course those who say that we’d be like Norway, paying billions for access to the Single Market, and still subject to EU rules over which we had no influence (as if we had a great deal of influence now).  But that’s nonsense.  We should no more be obliged to obey their rules than we should oblige them to obey ours.

What would we pay for access to their Single Market?  Simply to allow the rump-EU reciprocal access to our market.  Even that would be generous, since they sell a great deal more to us than we sell to them.

So they could keep selling us BMWs from Munich, and we would keep selling them Toyotas from Derby and Jaguars from Browns Lane.  Sounds like a fair deal to me.

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6 Responses to OK, Brussels, let’s make a deal!

  1. You are so right! (Again).
    We are going, however, to get a “sensible compromise”. The EU is brilliant, being run by second raters, at that – fudging and waffling.
    Meanwhile Spain is already broke which means that all state employees – I repeat all state employees think of that! – are not going to get paid. Police, Teachers, Tax Collectors, Mayors, Army (lots of those) all on the street begging or else demonstrating.
    Their banks have, apparently (Newsnight) been pillaged by the corrupt politicians. They are busted too. (Santander?) You cannot even use an ATM.
    People are moving into the millions of unoccupied properties and squatting there. Others are pushing out the Moroccan immigrants on the fields and farming them themselves illegally with their hoes and spades, desperate for food.
    This is Spain which is firmly European and the centre of the Catholic Faith, for heaven’s sake!
    So the second raters of the EU – the twin Presidents of Europe and the High Representative and the 27 Commissioners in their Group are caught like rabbits in the headlights.
    And Mr Cameron smiles on.

  2. maureen gannon says:

    What can I say but agree 100% with both of you, I want to see that 50 Million a day spent here in this country , not maintaining unelected no brainers to a lifestyle they are unaccustomed to.

  3. fausty says:


    Notice how Cameron qualified his statement on banking union:

    “… we won’t take part in the profound elements of that banking union.

    So, we will take part in the banking union, but not as deeply as others … yet.


    Who can possibly believe that Cameron would renegotiate? Even were a straight in/out referendum to be held in 2015, no government can bind its successor. So an “Out” vote need not be implemented by any incoming government, especially as election pledges are mere mandates: they do not compel governments to deliver.

  4. Charles Wardrop says:

    Agreed indeed, but how could the present UK PM, clearly an undeclared Lib. Dem., help us?

  5. Pingback: How to declare an EU referendum, keep all sides happy and win the general election – Telegraph Blogs

  6. Malcolm Edward says:

    I agree, we should have nothing more than a free trade deal with the EU or just rely on WTO and GATT rules.
    We must not be part of today’s EFTA. If and when we leave the EU, we need to beware of europhiles (pretending to be eurosceptics) encouraging us to join EFTA as a ready-made treaty. EFTA is a trap for the unwary – we’d still be handing over vast sums to Brussels and having to obey many EU regulations, with the added bonus for Brussels that our concerns can’t be raised and can be totally ignored, yet we can be told what to do.

    Those of us wanting an independent Britain need to set the agenda for the type of Britain and what sort of trading, judicial and defence arrangements we want post-EU. We don’t want the europhiles subordinating us again to the EU or to any sort of world government with another tranche of treaties.

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