'One side rejoices and the other weeps': What does Cameron's summit veto mean for Britain's place in Europe, John Humphrys asks
David Cameron’s dramatic decision to exercise Britain’s veto at the European summit last week has certainly put the cat among the pigeons. It has strained relations with his Liberal Democrat Coalition partners almost to breaking point and it has opened up the whole question of Britain’s future in the European Union. His critics say that at best he has isolated Britain and at worst set us on a course to leaving the EU. Some of his supporters say that’s the best news they have heard in years. But will his decision turn out to be such a watershed, or will developments in the Eurozone over the coming weeks and months be so momentous as to make the Prime Minister’s veto seem a sideshow?
Mr Cameron’s action was dramatic because no previous British prime minister had ever wielded the veto in negotiations over EU treaty changes. Previously, British diplomacy had sought a deal. The British would wave through changes their European partners wanted, usually in pursuit of greater European integration, so long as they agreed that Britain could have an opt-out from those changes. So why did the Prime Minister do it?
To some commentators, this remains a bit of a puzzle because what our European partners were proposing was, in broad terms, what Britain wanted anyway. Germany and France had come to the conclusion that the current crisis with the euro could be solved only if far greater discipline in terms of running their economies was imposed on the seventeen EU countries using the single currency. The German chancellor, Angela Merkel, argued that this could be done only by changing the EU treaties so that those disciplines could be imposed by EU institutions, such as the Commission and the European Court of Justice. But to get such treaty change, all 27 EU countries would have to agree.
In one sense what Mrs Merkel was proposing was exactly what the British Chancellor of the Exchequer, George Osborne, had himself been advocating. He had repeatedly said that it was overwhelmingly in Britain’s interests for the Eurozone to sort out its troubles and that the “remorseless logic” of the single currency was greater fiscal integration among countries in the Eurozone. That was what the proposed treaty changes would begin to bring about, and none of the measures proposed would affect Britain since Britain is outside the Eurozone.
On this argument, therefore, the Prime Minister could have said it was in Britain’s interest simply to go along with the treaty change. On this occasion there was no off-setting opt-out to be sought since we already had the opt-out by not being part of the euro.
But Mr Cameron took the view that if the EU was now in the business of treaty change, he’d propose a change of his own. In terms of the principles of negotiation, some people argue that even if what the other side wants in a negotiation is what you yourself might want, you should still try to extract a quid pro quo in order to let him have it. That’s certainly the view of Eurosceptics, especially those on the Conservative backbenches. For years they have demanded that Britain should seize any opportunity to negotiate treaty changes of its own. And so, on political grounds, the Prime Minister seems to have believed that he would need to secure additional treaty changes. Without them he calculated that he would not be able to get the treaty change Mrs Merkel wanted through the House of Commons anyway.
The change he focused on related to the way the regulation of financial services would be decided in the EU. He wanted a treaty change to ensure that such decisions would require unanimity rather than be made by majority vote. In this way Britain could keep control of laws affecting the City of London, which amounts to about 10% of the British economy. He feared that without such a treaty change our European partners would be able to take decisions that would harm the City.
The Prime Minister described this proposal as 'modest and reasonable' and seems to have believed it would be agreed without too much difficulty. But the other leaders threw it out. They argued that it was too big a decision to make without proper negotiation and, in any case, it had nothing to do with saving the euro. Having failed to get what he wanted, the Prime Minister felt obliged to veto what they wanted. That left them to follow what the Germans regarded as the second-best option: trying to impose new fiscal discipline through intergovernmental deals, rather than via changes to the EU Treaty.
The exercise of the veto went down very well with Tory backbenchers but it allowed the Labour leader, Ed Miliband, to accuse the Prime Minister of a massive failure of diplomacy. Mr Cameron had failed to secure what he wanted as our European partners remained in a position to take measures harmful to the City, if they wanted. But he had also forfeited Britain’s seat at the table: the other 26 members of the EU would now take decisions without us and Britain would be isolated. The Prime Minister had proved himself a 'loser'.
For the Lib Dem members of the Coalition, this was a bitter outcome. Their party has long been the most pro-EU in Britain. Their leader, the Deputy Prime Minister, Nick Clegg, stayed away from the Commons when Mr Cameron reported to it on Monday.
What they fear is that this is only the beginning of Britain’s isolation. Other EU countries, furious at the British veto, will plough on regardless, paying increasingly little attention to Britain which will see its influence wane further. Decisions will be taken that will harm our interests and without our place at the heart of the EU we will no longer be taken seriously in Washington. We will float off into the mid-Atlantic.
Eurosceptics, on the other hand, see the future not in terms of growing isolation but greater independence. Britain should seek to claw back more powers from Brussels. Some think we should leave the EU altogether. In short, the two sides view the future similarly. Both see the consequence of the Prime Minister’s veto as being greater detachment from the EU. It’s just that one side rejoices and the other weeps.
But is this how things will pan out? Some commentators think there is a much bigger story in what happened last week. They argue that it is mistaken to imagine that the other 26 EU countries are now set on a smooth path to solving the Eurozone’s problems and waving Britain goodbye. Their attempt to impose new disciplines via an intergovernmental route, now that Britain has denied them the EU Treaty route, is already facing difficulties. Despite agreeing to do so, some countries may find they cannot get the new agreement through their parliaments.
But much more to the point, the financial markets may not wait for them to sort these difficulties out. Almost no one believes that the proposed changes would be enough to solve the crisis even if they were implemented. The fundamental problem they were designed to help solve remains unresolved and could be tested any day if the markets were to target a country, such as Italy, that they believe may not be able to raise the money to pay its debts.
Increasingly, a consensus is building that the Eurozone simply cannot continue in its present form and that it is actually not in the interests of many of its members that it should. In the short-term any break-up of the euro, however partial, would cause economic and possibly political chaos but that is unavoidable, the argument goes, if peripheral countries are to have any future.
In this context, all the relations between EU countries will end up having to be renegotiated, and that includes Britain. On this view, therefore, Mr Cameron’s veto will come to seem like an interesting footnote to history. The reshaping of Europe will be brought about by much bigger forces.
What’s your view?
- Do you think the Prime Minister was right to use the veto?
- Should he have sought the extra treaty change affecting the City or should he have just gone along with what our EU partners wanted and that would have affected only the Eurozone?
- Do you regard the outcome as a failure of diplomacy and Mr Cameron as a 'loser'?
- Do you think his decision leaves Britain isolated in Europe or not? Should he now by trying to mend fences with our European partners or seeking yet greater independence for Britain within the EU?
- Should the Lib Dems stay in the Coalition or not?
- Should Britain leave the EU altogether?
- Do you think the Eurozone can continue in its present form or do you think some countries should leave the euro?
- In the long-term what sort of relationship would you like to see between Britain and other European countries?
Have your say below.
