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Friday, 2 November 2012

Will the United Kingdom of PM David Cameron be forced out of the EU after disastrous Tory vote in the Commons?

It's so much better
When everyone is in
Are you in?

“Et tu, Brute?” (and you, Brutus?)
Julius Caesar’s famous last words

It is no secret that most Britons have always had a true love/hate relationship with the EU and its predecessor the E(E)C: some of them even loved to hate it! From 1973 when the UK became a member until today, the British membership has always been more like a necessary evil for the British than a choice out of conviction. With this attitude, the United Kingdom differed strongly from f.i. Ireland, which became a full-hearted member, also in 1973.

While the European Continent hosted the most important trade partners of the British, their heart had always been with the United States with whom they shared their language and their business attitude.

Both countries were in favor of the more aggressive and hierarchic Anglo-Saxon business model with its strong focus on shareholder value, efficiency and profit maximization, while the European continent had been more used to the German/French Rheinland model with its consultation culture and its focus on continuity and the interests of all stakeholders. 

These business models seemed like water and fire and as a consequence both sides essentially didn't understand eachother. Therefore, during the years of its EU membership, the UK tried to yield as much as possible from the business opportunities that the EU offered, while trying to pay as little contribution for it and accept as little legislation from it as possible.

This led to a cool, business-like, but useful relation with the EU that lasted for almost fourty years, until… David Cameron got elected in 2010 as Prime Minister for the Tories. Although the Tories had clearly won the elections, this didn’t lead to a majority in the House of Commons. Therefore Cameron was forced to form a coalition with the Liberal Democrats of Vice-PM Nick Clegg: a very rare situation in the UK.

This coalition has seemed to work alright for the domestic issues in Great Britain, but it has been very divided on the EU: Nick Clegg and his LibDems are pro-Europe, as they see the EU as a necessary asset for Britain’s wellbeing. While Cameron really can’t be accused of being anti-European and anti-EU, this could be said about many Tory MP’s, who would rather leave the EU today than tomorrow, just like many common Britons (especially the English and Welsh citizens).

They see the EU as a bureaucratic, undemocratic, money-consuming monster that wants to overrule the British way of living and doing business, thus threatening the Britons in their very existence on their own island. While the trend of going back to your grassroots is currently worldwide, I don’t consider this the main reason behind the English hostility against the EU and the European countries.

Everybody that watched old episodes of Fawlty Towers (”Don’t mention the war!”) or Top Gear, when the lads talk about the Germans sees the barely hidden hostility and frustration of the English against the Germans (and also the French and other European countries as a matter of fact). Although WWII is now over for more than 65 years, it is hardly forgotten in England.

The Scottish citizens differ from the English in this matter, as they rather see the EU as a means to become independent from the United Kingdom again than as an enemy at their own turf.

Yesterday, on October 31st, 2012, the sh*t finally seemed to hit the fan in the House of Commons.

Just like the Dutch government, the British government and especially the parliament had been outraged by the European Union’s intention to raise the EU’s budget by 7% for 2013. Therefore, it had been David Cameron’s plan to visit the next EU summit on November 22-23 with the message that ‘nought and solely nought percent’ was the British goal for the EU budget raise plans.

However, this didn’t go far enough for a one-off coalition of Labour MP’s and a number of hardliners in the Tory party. Instead of settling for the 0% increase of the EU’s budget, they wanted to send Cameron to the EU with the order to DEcrease the EU’s budget by several percents.

This was too much for Cameron, who would get in an impossible split between his own party’s interests and that of his more pro-European coalition-partner Nick Clegg. On top of that, he feared the reproachful glances of Angela Merkel and François Hollande, as he already suffered from a reputation as the ‘saboteur’ of the EU.

When yesterday a vote on this topic was held in the Commons, Cameron hoped that his coalition’s whips (i.e. fraction leaders) could shut up the Tory rebels and could bring a majority for his ‘EU budget freeze’ policy. This didn’t happen…

Although David Cameron can hardly follow in the footsteps of the famous, Roman ‘senator-turned-emperor’ Julius Caesar, when it comes to leadership, strategic insight and bravery, he experienced a truly Caesaric moment on this doomed October 31st, 2012.

He lost the majority vote for his EU budget freeze policy with 304 against 297 votes and is now in an impossible position, seemingly even worse than in December, 2011. Although it had been a non-binding vote on the EU budget freeze yesterday, the political implications of it yet seem very clear. The position of the Tory party, combined with Labour’s current anti-European stance, might eventually force Cameron and the UK out of the EU if nothing changes dramatically. Coalition-partner Nick Clegg saw it happen and was not amused.

The Financial Times wrote a few articles on this topic, of which I print the pertinent snips:

David Cameron suffered a fresh blow to his authority when the government lost a Commons vote over the EU budget after a pincer movement by Labour and more than 50 rebel Tory MPs.

The prime minister had hoped to win political capital by heading to this month’s EU summit with parliament’s backing for his call for a budget freeze.

But his credibility was instead undermined as eurosceptic MPs backed an amendment demanding Britain go even further and push for a reduction in Brussels’ seven-year funding package.

Despite a concerted operation by Conservative whips, the government lost the vote on Wednesday evening by 307 to 294, one of the biggest rebellions of the coalition.
The vote was non-binding, but will once again leave Mr Cameron open to charges that he is unable to control the anti-EU wing of his party, which is in the ascendancy.
Ed Balls, the shadow chancellor, seized on the result saying it showed Mr Cameron was too “weak” to deliver a genuine cut and reform of the EU budget.

The prime minister earlier told the Commons he was taking the “toughest line” in budget negotiations of any British government for decades. “At best we would like it cut, at worst frozen, and I’m quite prepared to use the veto if we don’t get a deal that’s good for Britain.”

Ministers are increasingly uncomfortable that the EU budget is rising when the UK is slashing public spending. Liam Fox, former defence secretary, abstained because it was wrong to “vote for more money for the European Union at a time when we are reducing spending”.

Mr Cameron’s failure to secure his own party’s support echoes the vote a year ago when he suffered the largest revolt of his premiership as 81 Tory rebels backed a referendum on Britain’s membership of the EU.

Obviously, it is not a very smart move of the EU to ask for a substantial 7% budget raise in times of economic desperation everywhere in Europe and I can understand the British MP’s voting against it.

On the other hand, the EU still works with a ‘token’ budget of less than 1.5% of European GDP (€141 bln vs. €12.6 trn, according to Wikipedia). This is a much lower percentage than the average national budgets of the European member states. On top of that, most budget money is reinvested in the European member states through agricultural subsidies and the so-called structure funds for reinforcements of the European infrastructure.

Although you can argue if this is money well spent, most people admit that ‘Brussels’ delivers a lot of bang for their buck, when it comes to the legislative force  of the European Council and the other European institutions.

When you take notice of the fact that the number of tasks of the European institutions (f.i. the ECB)  has strongly increased during the last five years, it is not strange that the EU needs slightly more budget.

Nick Clegg is aware of this conundrum and states that there is little hope for a European budget cut, as proposed by the Tory rebels and Labour. However, he is confident that he can pursuade his EU colleagues in accepting a budget freeze. Again the Financial Times:  

British ministers insisted on Thursday morning that the government would continue to press for a freeze in the European Union budget despite losing a Commons vote when rebel Conservatives united with Labour to reject the proposal in favour of pushing for a cut.

George Osborne, chancellor, dismissed Wednesday night’s non-binding vote as “tactics at the start of a negotiation”, while Nick Clegg, deputy prime minister, said the rebels had “absolutely no hope” of cutting EU spending.

David Cameron, the British prime minister, was undermined when more than 50 Tory MPs rebelled despite a concerted operation by Conservative whips. The opposition Labour party described the defeat as “humiliating” and said it showed Mr Cameron was “weak and out of touch”.

Mr Osborne said Britain had to be prepared to settle for a freeze, as it was better than not reaching any deal on the seven-year budget. He refused to be drawn on whether he thought a real terms cut was possible, but said the government would only accept an offer from the EU that it thought parliament would approve.

Mr Clegg, who leads the Liberal Democrats, the smaller coalition partner, was confident he could convince his European peers to freeze the budget.

In a speech to Chatham House, the think tank, on Thursday, he said: “This is a deal that can be done – that’s the message I’m pushing with my European counterparts. With governments across Europe having to get the most out of every pound, euro or zloty they spend, a real terms freeze is a good offer.”

Both ministers lashed out at Labour, accusing the traditionally pro-Europe party of opportunism.

Mr Osborne said their stance “took them a step further away from government last night” and that it reminded him of the tactics the Tories had used unsuccessfully early in their time in opposition. Mr Clegg said the party was “dishonest” and “hypocritical”.

Ed Balls,[Labour’s] shadow chancellor, struck back: “David Cameron has failed to convince his own backbenchers, just as he is failing to convince other European leaders.”

One of the Tory rebels, Sarah Wollaston, stressed the party was united on Europe, suggesting the naysayers had helped David Cameron by giving him a strong negotiating position.

Ed Balls, the shadow chancellor is right. PM Cameron is the victim of the ambivalent British stance towards the EU: a marriage of convenience without the love to keep the partners together in the end.

Most credit of the UK in the EU has already been used up during the last years in which Cameron showed himself as a naysayer against almost everything coming out of the EU.

In her dreams Sarah Wollaston might be right about ‘giving Cameron a strong negotiating position’, but in the EU reality rules. The other EU countries (except for The Netherlands where Cameron’s soulmate PM Mark Rutte just formed a new cabinet) surely didn’t forget the 2011 hassle with the UK and I’m convinced that they want to keep the country at a very tight leash.

Instead of being blackmailed with a British veto when a EU budget freeze (or even budget cut) stays out, they will force the UK to make a final choice between being in or out of the EU. This is something that Cameron surely won’t like at this moment, as this could cost him his political skin and that of his coalition government.

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