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Wednesday, 7 December 2011

PM David Cameron of the United Kingdom is ‘stuck between a rock and a hard place’, but shows tremendous leadership against an opposition that smells blood.

In the almost 40 years that the United Kingdom is a member of the European Union (since 1973), there has been mutual respect, mutual benefit and a certain amount of affection. But there never has been love.

The UK wanted special terms, special benefits and a special discount on the membership fees. In the meantime the country tried to benefit most from the EU, while trying to ensure the least amount of interference of the EU in country politics. The opposition against the meddlesome European Union has always been strong. 

The UK is probably the only country in the European Union where a majority of the people and almost a majority of parliament don’t want to be a member of the EU at all. 

One of the reasons for this widespread reservedness and even animosity against Europe might be that the UK was used to being one of the most important and influential empires in the world and had undisputed power. Now the country is at best a member of the European Economic Top 5 and it is not recognized for its leadership within the EU.  On top of that, the country feels much stronger connected with the USA, with whom it shares its language and a very special relationship. 

The UK always felt a stranger in the relation with continental Europe with its Paris/Berlin axis, its many incomprehensible languages and its endless discussions and bureaucracy. Therefore it has always been a EU-member without passion. Ireland, although the country is further away from the European continent, felt much more love for the European Union, as it gave the country the chance to escape from poverty.

And now, at a time that it is ´do or die´ for the whole European Union and especially for the Euro-zone and its current member-states, it is the lack of love that puts a lot of tension in the ‘marriage of convenience’ between the EU and the UK.

And just like in a respectful, but loveless marriage between people; in good times they manage to keep things from falling apart. In bad times, however, the tensions grow quickly and then often the self-interest wins from the mutual benefits of the marriage. 

Therefore it was pleasantly surprising for me to see the tremendous leadership that was expressed in the letter that David Cameron wrote to the Times today.

David Cameron, the young and eloquent Tory (conservative) Prime-Minister in the first British coalition cabinet in ages, is – as inquiring minds know – stuck between a rock (the plans of Merkozy for a much stronger connected Europe) and a hard place (the anti-European sentiment on his home turf).

In his letter Cameron explained the stance of the United Kingdom towards the Euro-negotiations of tomorrow. I quote the pertinent snips from this letter (for reasons of unpaid access, the link points to another newspaper that also integrally printed the letter):

What matters most to Britain's national interest now is that the eurozone sorts out its problems. These have been having a chilling effect on our economy for the past 18 months, and the longer the crisis continues, the more it will damage us. We need this resolved as quickly as possible.

That requires three things.
First - as Germany has argued - there needs to be much tighter fiscal discipline and closer fiscal co-ordination within the eurozone to restore market confidence and stop unmanageable debt and deficits occurring all over again.

Second, the members and institutions of the eurozone should take whatever action is necessary to prevent a second global credit crunch. In a world where the interest rates on Greek debt are 33%, on Spanish debt 5% and on Italian debt 6%, we need to see the full implementation of all the elements that the UK has been pushing for - above all a big firewall to prevent contagion along with properly capitalised banks.

Third, and more fundamentally, we need to see improved competitiveness, especially in the euro-area economies that are struggling to grow. Britain has put forward and consistently argued for bold structural-reform programmes and a comprehensive growth plan for Europe.

In all of these debates my job is to defend and protect the British national interest.

If we are changing the treaty that applies to all EU countries and allowing the eurozone countries to have new rules, it is also important that there are rules to keep the single market fair and open for key industries for Britain, including financial services.

Our requirements will be practical and focused. But eurozone countries should not mistake this for any lack of steel. Fundamentally, the problem with the eurozone is a problem of competitiveness, with countries that have large trade deficits coexisting with Germany, which has a huge trade surplus. These imbalances have to be addressed. Without this there will be no lasting solution. We fully support the eurozone's determination to reform its own rules and structures, but not if they are just papering over the cracks and threatening Britain's own interests in the single market.

While this week's summit will inevitably focus on the crisis in the eurozone, I am still committed to forging a new kind of Europe. Indeed, some of the problems underlying the crisis strengthen the case for a more competitive, dynamic and outward-looking Europe.
I have spoken about a Europe that has the flexibility of a network, not the rigidity of a bloc. A Europe that looks beyond itself, with its eyes to the horizon, and recognises that it must change fundamentally or fall behind. A Europe that cherishes its national identities as a source of strength.

That is the kind of Europe that is in Britain's national interest and that is the kind of Europe I am determined to help to bring about."

This is a very strong letter and the letter of a man that seems committed to do the right thing in tomorrow´s Euro-zone negotiations. It is very good to read in the red text that Cameron addresses the problems of the structural imbalances within Europe and doesn´t put the blame for the Euro-crisis solely on the peripheral Euro-countries.

I wish the German and Dutch governments would express Cameron´s understanding of the fundamental problems within the Euro-zone. However, I´m not optimistic about this: PM Mark Rutte of The Netherlands and Chancellor Angela Merkel will probably decide to ignore these imbalances totally and to go on with their blame game of Southern-Europe.

Everybody that knows the financial substance of the City for the British Gross Domestic Product, understands that Cameron stands firm for the interests of London. And that Cameron is not in favor of a much stronger connected Europe (´the bloc´) and that he sees the national identities as a source of strength is understandable; both from his British background and from the pressure that is being put on him by both his own party-members and the opposition.

To give you an impression of this internal opposition that Cameron has to deal with, I show here the pertinent snips from an article in the Financial Times of today:

The prime minister was asked in the Commons if he would show some “bulldog spirit” at the weekend EU negotiations. “That’s exactly what I will do,” he insisted.
Yet however the talks are resolved, Cameron seems unlikely to emerge clutching what many of his backbenchers would like to see: the repatriation of various powers such as human rights legislation and employment laws.

That is likely to stoke the internal pressures which were visible in the October Commons debate over an EU referendum, when 81 Tory backbenchers rebelled against the leadership.

Ed Miliband skewered the prime minister over the issue during PMQs, reminding the House that Cameron had promised the repatriation of powers during that debate: “Six weeks ago he was promising his backbenchers a handbagging for Europe, now he’s reduced to handwringing.”

The line is sensitive for the Tory leader as it reflects what many of his rank and file believe. Asked by backbencher Steve Baker whether Britain should simply “leave Europe” – a not uncommon view among Tory MPs - Cameron replied that it was in the country’s interests to stay “in the single market”.

His demands would not include repatriation of social or employment laws but would instead be “practical and focused“, he warned. Instead the immediate priority was to drag the single currency back from the precipice: “Our biggest national interest is that the eurozone sorts out its problems“.

Meanwhile Cameron is facing pressure from another cabinet minister, this time Northern Ireland secretary Owen Paterson, who has told the Spectator that a referendum on EU membership is “inevitable“.

As James Kirkup writes on his blog, Paterson said:
“If there was a major fundamental change in our relationship, emerging from the creation of a new bloc which would be effectively a new country from which we were excluded, then I think inevitably there would be huge pressure for a referendum.”

Asked if a referendum would be required, he continued:
“I think there will have to be one, yes, because I think the pressure would build up. This isn’t going to happen immediately because these negotiations are going to take some months. But I think down the road that is inevitable.”

If the leader of an notoriously anti-European country shows so much strength and leadership in favor of the EU against an opposition that is so widespread, then let him be a beacon for the rest of the EU leaders to show the same strength and resolve. Then tomorrow´s Euro-zone summit might become a success after all.

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