Can Sarkozy and Brown kiss and make up?

Will Sarkozy be forgiven for his assaults on "Anglo-Saxon" capitalism?

With Anglo-French relations at their lowest ebb since Jacques Chirac declared that Britain had the worst food in the world (after Finland), Nicolas Sarkozy and Gordon Brown have co-authored a piece in today's Wall Street Journal in an attempt to repair the entente cordiale.

The latest quarrel began, you may remember, after Sarkozy launched a polemical assault on the "unconstrained Anglo-Saxon market model". With unrestrained glee, he declared that the appointment of the Frenchman Michel Barnier as the EU's financial regulation chief promised "victory" for the "European model".

Do you know what it means for me to see for the first time in 50 years a French European commissioner in charge of the internal market, including financial services, including the City [of London]?

I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism.

It will stand as one of the ironies of history that the man who came to power promising to do for France what Thatcher did for Britain has transformed himself into one of the most vociferous critics of Anglo-Saxon capitalism. But like his Gaullist predecessors, he has found the rhetorical appeal of the dirigiste tradition too heady to resist.

Perhaps unexpectedly, today's article isn't the bland or incoherent work it might have been. The solid social-democratic belief that the market is a good servant but a bad master underlines their appeal for a "new compact" between global banks and "the society they serve". And both are right to call for European states to introduce a one-off tax on bank bonuses.

The pair will meet on the fringes of the latest EU summit, with one diplomat commenting: "I think it'll be fine. In two years, you'll be wondering what the fuss was about."

If you accept Harold Wilson's dictum that "a week is a long time in politics", then two years is a rather long time for both sides to forgive and forget. Sarkozy and Brown would do well to begin with a new compact between themselves before turning to casino capitalism.

 

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George Eaton is political editor of the New Statesman.

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What price would the UK pay to stop Brexit?

The EU could end Britain's budget rebate and demand that we join the euro and the Schengen zone.

Among any group of Remain politicians, discussion soon turns to the likelihood of stopping Brexit. After Theresa May's electoral humbling, and the troubled start to the negotiations, those who oppose EU withdrawal are increasingly optimistic.

“I’m beginning to think that Brexit may never happen,” Vince Cable, the new Liberal Democrat leader, said recently. A growing number, including those who refuse to comment publicly, are of the same view. 

But conversation rarely progresses to the potential consequences of halting Brexit. The assumption that the UK could simply retain the status quo is an unsafe one. Much hinges on whether Article 50 is unilaterally revocable (a matter Britain might have been wise to resolve before triggering withdrawal.) Should the UK require the approval of the EU27 to halt Brexit (as some lawyers believe), or be forced to reapply for membership, Brussels would extract a price. 

Guy Verhofstadt, the European parliament’s Brexit co-ordinator, recently echoed French president Emmanuel Macron's declaration that “there is always a chance to reopen the door”. But he added: “Like Alice in Wonderland, not all the doors are the same. It will be a brand new door, with a new Europe, a Europe without rebates, without complexity, with real powers and with unity.”

The UK's £5bn budget rebate, achieved by Margaret Thatcher in 1984, has long been in the EU's sights. A demand to halt Brexit would provide the perfect pretext for its removal. 

As Verhofstadt's reference to “unity” implied, the UK's current opt-outs would also be threatened. At present, Britain (like Denmark) enjoys the right to retain its own currency and (like Ireland) an exemption from the passport-free Schengen travel zone. Were the UK to reapply for membership under Article 49 of the Lisbon Treaty, it would be automatically required to join the euro and to open its borders.

During last year's Labour leadership election, Owen Smith was candid enough to admit as much. “Potentially,” he replied when asked whether he would accept membership of the euro and the Schengen zone as the price of continued EU membership (a stance that would not have served Labour well in the general election.)

But despite the daily discussion of thwarting Brexit, politicians are rarely confronted by such trade-offs. Remaining within or rejoining the EU, like leaving, is not a cost-free option (though it may be the best available.) Until anti-Brexiteers acknowledge as much, they are vulnerable to the very charge they level at their opponents: that they inhabit a fantasy world. 

George Eaton is political editor of the New Statesman.