Last night David Cameron really put the Euro cat among the pigeons. A Franco-German plan for a treaty including all 27 EU Nations was vetoed by him, when he failed to win an exemption from new financial regulations for the United Kingdom. Instead of an EU wide treaty, a new intergovernmental treaty will be negotiated between those countries who wish to take part (23 countries so far).
The response back home has been as expected. Eurosceptics are delighted, as they see it as the UK’s chance to get of the Euro train to the United States of Europe. Europhiles are warning that the UK is isolated, and a worsening relationship with Europe will damage our main export market.
Our Prime Minister invoked the veto due to not getting the exemption for the financial sector that the City wants. It is clear that the deregulation of the financial sector is a very significant issue when tracing the root cause of the current global economic difficulties. Most on the Left believe that the type of new regulation proposed, such as a transaction tax, is desperately needed. I concur with this view, but believe that this should not done as part of the treaty proposed.
However, the treaty as proposed would have introduced other elements that the progressive left should have great issues with:
- A cap of 0.5% of GDP on countries’ annual structural deficits
- Automatic consequences for countries whose public deficit exceeds 3% of GDP
- Tighter rules to be enshrined in countries’ constitutions
These measures interfere with a Nation’s freedom to run its own economic policy. The big concern of myself and others across the political spectrum is that the undemocratic nature of the EU grows. A free market has become a monetary union. The next step is fiscal union. Both Italy and Greece have new Leaders who have not been democratically elected, but put in place to deliver austerity measures demanded by Global Finance. Look at the streets of Greece – does it look like the people support austerity?
The measures proposed further erode the power of National Governments to determine their own future. The truth is that the EU is headed for the only logical place it can. Monetary union cannot work with fiscal and political union. The crisis in Europe is to a large part due to the flawed structure of its Monetary Union. It must do one of two things – abandon the project entirely or head to the United States of Europe. Trying to straddle the two is damaging the whole continent. Nothing in this treaty does anything to fix the current crisis in the Eurozone.
David Cameron sees the two ways ahead. While I do not support his reasons for choosing the path he did, it is the path I would choose for the sake of democracy. It might be an unclear and lonely path, but the other way heads full speed off the edge of a cliff in broad daylight.
David’s move will be very popular with the broadly Eurosceptic British Electorate. I believe that this will seriously boost the electoral prospects of the Conservatives in 2015, and Ed Miliband’s uphill struggle has now got twice as difficult.
UK politics has just got very interesting.