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David Cameron has allowed Europe to say FU to its people David Cameron has allowed Europe to say FU to its people
(about 2 hours later)
When David Cameron refused to sign the EU's fiscal compact last month, there was a loud cheer. The Conservatives jumped five points in the opinion polls, and 70% of Tory activists named the veto as David Cameron's single greatest moment. When David Cameron refused to sign the EU's fiscal compact last month, there was a loud cheer. The Conservatives jumped five points in the opinion polls, and 70% of Tory activists named the veto as David Cameron's single greatest moment.
Yet those cheering the most lustily were often vague about precisely what they were cheering. I say this in no slighting spirit: the summit took place behind closed doors, and it took several days for the text to emerge. That, though, didn't much bother anyone. It was enough to know that, for the first time since the budget rebate in 1984, a British prime minister had said "no" to Brussels. Yet those cheering the most lustily were often vague about what they were cheering. I say this in no slighting spirit: the summit took place behind closed doors, and it took several days for the text to emerge. That, though, didn't much bother anyone. It was enough to know that, for the first time since the budget rebate in 1984, a British prime minister had said no to Brussels.
Still, it's worth reminding ourselves of precisely what David Cameron refused – and what he accepted on Monday. As usual, most commentators are framing the story as a battle between the prime minister and those pantomime villains The Tory Right. According to this narrative, the PM is under pressure because of some abstruse issue about whether the new pact will apply to Britain. Still, it's worth reminding ourselves of precisely what Cameron refused – and what he accepted on Monday. As usual, most commentators are framing the story as a battle between the prime minister and those pantomime villains the Tory Right. According to this narrative, the PM is under pressure because of some abstruse issue about whether the new pact will apply to Britain.
In fact, there was never any question of Britain – or any other non-euro state – being bound by its terms. The PM was quite relaxed about whether the eurozone members adopted tighter fiscal rules. If anything, he mildly favoured the idea. But he entered the December summit wanting something in return. If the euro members wanted to use EU institutions and procedures to invigilate their pact, they would have to give Britain assurances that its financial services industry, which is openly resented by some of the other member states, would not be subject to vindictive regulation. When no such assurances were given, agreement broke down.In fact, there was never any question of Britain – or any other non-euro state – being bound by its terms. The PM was quite relaxed about whether the eurozone members adopted tighter fiscal rules. If anything, he mildly favoured the idea. But he entered the December summit wanting something in return. If the euro members wanted to use EU institutions and procedures to invigilate their pact, they would have to give Britain assurances that its financial services industry, which is openly resented by some of the other member states, would not be subject to vindictive regulation. When no such assurances were given, agreement broke down.
The integrationist states, however, immediately made clear that they had no intention of allowing Britain's objection to stand. In theory, their accord is an intergovernmental agreement among 25 countries that just happen to be EU members. In practice, it draws fully in the EU's institutional structure, specifying regular meetings with the European parliament, for example, and laying down that penalties will be applied by the European court of justice. Such things have absolutely no legal basis. A sub-group of EU states can no more decree meetings with the European parliament than with the Japanese diet; no more rely on the ECJ for arbitration than on the supreme court of Mauritius. Yet Britain has raised no objection to this flagrant illegality. The integrationist states, however, made clear that they had no intention of allowing Britain's objection to stand. In theory, their accord is an intergovernmental agreement among 25 countries that just happen to be EU members. In practice, it draws fully on the EU's institutional structure, specifying regular meetings with the European parliament, for instance, and laying down that penalties will be applied by the European court of justice. Such things have absolutely no legal basis. A sub-group of EU states can no more decree meetings with the European parliament than with the Japanese diet; no more rely on the ECJ for arbitration than on the supreme court of Mauritius. Yet Britain has raised no objection to this flagrant illegality.
To be clear, this was the entirety of the dispute at the Brussels summit. The denial of the use of EU mechanisms was not part of David Cameron's veto; it was David Cameron's veto. To be clear, this was the entirety of the dispute at the Brussels summit. The denial of the use of EU mechanisms was not part of Cameron's veto; it was his veto. In one important sense, we are now in a worse position than we were before December. We have set the precedent that, if some integrationist states want to go further but fail to gain the approval of all 27 EU members, they need only sign an intergovernmental accord among themselves and carry on using EU institutions. This, in effect, means that there can never be any more vetoes – ever.
In one important sense, we are now in a worse position than we were in before December. We have now set the precedent that, if some integrationist states want to go further, but fail to gain the approval of all 27 EU members, they need only sign an intergovernmental accord among themselves and carry on using EU institutions. To all intents and purposes, this means that there can never be any more vetoes – ever. We had a generational opportunity to improve our membership terms. We could have held out for a return of powers. Or, alternatively, we could have encouraged the division of Europe into two separate blocs: the European Union (EU) and the Fiscal Union (FU) – an acronym, by the way, which neatly summarises the attitude its leaders take to their peoples. You're Irish and you're fed up with paying higher taxes to compensate wealthy European bankers and bondholders? FU! You're Greek and you want a devaluation so that your business can be competitive again? FU! You're Italian and you're wondering why there isn't a single elected politician in your cabinet? FU!
We had a generational opportunity to improve our membership terms. We could have held out for a return of powers. Or, alternatively, we could have encouraged the division of Europe into two separate blocs: the European Union (EU) and the Fiscal Union (FU) – an acronym, by the way, which neatly summarises the attitude which its leaders take to their peoples. You're Irish and you're fed up with paying higher taxes to compensate wealthy European bankers and bondholders? FU! You're Greek and you want a devaluation so that your business can be competitive again? FU! You're Italian and you're wondering why there isn't a single elected politician in your cabinet? FU!
If the FU is now to be the main forum for economic integration, we could have encouraged its development into the main unit for political integration, too. We could have pushed for the gradual transfer of competences from the EU to the FU, until the EU was left as a kind of amplified free trade area, an Efta-plus.If the FU is now to be the main forum for economic integration, we could have encouraged its development into the main unit for political integration, too. We could have pushed for the gradual transfer of competences from the EU to the FU, until the EU was left as a kind of amplified free trade area, an Efta-plus.
Instead, nervous at the prospect of being blamed for a euro collapse, we gave in. The opportunity passed. It won't come again. Instead, nervous at the prospect of being blamed for a euro collapse, we gave in. The opportunity passed. It won't come again. Still, one thing must now be clear to everybody: there is no hope of improving our membership terms or of fundamentally reforming the EU from within. Instead of fantasising about what kind of EU we might ideally have liked, we shall have to face up to whether we want to be part of the one that has taken shape. That's why the argument has moved inexorably on to an in/out referendum. In Monday's Guardian Natascha Engel launched the campaign for an in/out referendum, run by the People's Pledge. I hope that, whether you're a supporter of EU membership or not, whether you're left, right or centre, you'll consider signing up. Don't guess at the outcome and then work backwards. Ask the more basic question: is consulting the electorate the right thing to do?
Still, one thing must now be clear to everybody: there is no hope of improving our membership terms or of fundamentally reforming the EU from within. Instead of fantasising about what kind of EU we might ideally have liked, we shall have to face up to whether we want to be part of the one that has in fact taken shape. In Monday's Guardian Natascha Engel launched the campaign for an in/out referendum, run by the People's Pledge. I hope that, whether you're a supporter of EU membership or not, whether you're left, right or centre, you'll consider signing up. Don't guess at the outcome and then work backwards. Ask the more basic question: is consulting the electorate the right thing to do?
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