Cameron goes hard on the euro – but is this a sensible strategy?

Blame-shifting may be politically expedient, but burning bridges with the eurozone is not going to h

It all started with PMQs on Wednesday, when David Cameron said that the eurozone should “make up or it is looking at a potential break up”. In a speech yesterday, he reiterated the message, telling business leaders that “the return of a crisis that never really went away” should end the current dithering. Now, for the third time in 24 hours, the Prime Minister has pushed the issue of a eurozone break up, this time during a conference call with EU leaders.

Speaking to Angela Merkel, Francois Hollande, Mario Monti, Herman Van Rompuy (president of the European Council), and Jose Manuel Barroso (president of the European Commission), the Prime Minister said that Germany should do more to prevent the single currency from unravelling.

It’s unlikely that this will go down well with Merkel, the German chancellor. Indeed, it’s unlikely that any of it will go down well with EU power-brokers. The fact that Cameron is repeatedly stoking fears of a eurozone break up will probably sour relations ahead of this weekend’s G8 summit. Cameron has defended his aggressive approach on the grounds that Britain’s future is so tied up in the eurozone that it is necessary to put diplomatic niceties to one side. Yet given his unwillingness to help broker a deal, this seems counter-productive.

As the Labour MEP Mary Honeyball put it in a strongly worded blog yesterday:

Cameron’s arrogance and unwillingness to engage with European leaders does not even come from a position of strength. Britain is struggling with a double-dip recession thanks to the Tory-led coalition. What is it that makes Cameron believe he can attack the Eurozone when his own and Chancellor George Osborne’s economic competence is so severely lacking?

. . .

It is becoming ever clearer that the UK   cannot go it alone. Our economy is well and truly tied up with the Eurozone. To believe anything else is to regress to some kind of post imperial cloud-cuckoo land when the EU did not exist and Britain was great.

Of course, it is obvious what the Prime Minister is doing. The country is back in recession and Labour are now neck and neck with the Conservatives on economic competence for the first time in this government, even overtaking them in some polls. No 10 has decided to go big on the single currency. The reasons for this are two-fold. Firstly, it detracts attention from their own floundering economic policy, and a show of strength over Europe may give Cameron a short term popularity boost with his own backbenchers and the public. Secondly, it is an attempt to redefine the debate on the economy – a debate which the government has lost control of in recent weeks – by casting the eurozone as the main factor in Britain’s continued economic woes. It is not a new approach – the first two years of coalition have been defined by an emphasis on the “mess left by Labour” – but it is a shifting of the blame.

There is some logic to this strategy – there is certainly no shortage of struggling foreign economies at which to point the finger. But ultimately, it is unhelpful. As a Guardian editorial argues today:

Britain is not uniquely virtuous in the face of global economic downturn and institutional failure. In fact, Britain is not particularly virtuous at all. We are in recession again because that is the logical outcome of the policies followed by this, not any other, government.

Blame-shifting may be politically expedient, but burning bridges with the eurozone is not going to help find solutions.
 

Angela Merkel and David Cameron, Berlin, Germany, November 2011. Photograph: Getty Images

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Why Russia holds the key to resolving the North Korea crisis

China is propping up North Korea’s economy, but it seems to get little influence in return.

For more than half a century, China has seen North Korea as a dangerous irritant as much as an asset. It might be useful for keeping the United States off guard, and regarded as an essential buffer by the military establishment, but China would happily ditch it if there were a better option.

The North Korean regime has tended to be characterised as uniquely irrational and unpredictable. From its perspective, however, its behaviour makes eminent sense: in fact, its argument for developing a nuclear capability closely echoes the rationale of the great powers. It has no declared intent to launch a first strike, but as long as others have nuclear weapons, North Korea reasons they serve a deterrent function. The regime also argues, as others have, that there are associated benefits with civil nuclear power.  

The long history of North Korea’s nuclear programme follows a recognisable path, previously trodden by Israel, India and Pakistan. It goes from the ambition, formed in the mind of North Korea’s founding dictator, Kim Il-sung, through the long years of a clandestine programme, to the gradual revelation of a reasonably mature, if relatively small, nuclear capability. Signalling is also an element in deterrence. The regime is certainly unpleasant and destabilising, but it is a mistake to imagine that there is no clear purpose and no plan.

The dynasty began life as a Soviet puppet, sandwiched between a powerful USSR and a weak China. But from the start, Kim Il-sung’s muscular nationalism and concern for regime survival suggested that he was unlikely to be a docile dependent of either. His attempt to unify the peninsula by force in 1950 led to a bloody war in which Mao Zedong was obliged to come to his rescue. In the course of that war, “fire and fury” did indeed rain down on North Korea: the US dropped as much ordnance on North Korea as it had during the whole of the Second World War Pacific theatre, including the carpet bombing of Japan. To this day, any building site in Pyongyang is likely to turn up some unexploded ordnance. North Korea was born in a rain of fire, which it has incorporated into its national story.

The regime succeeded in maintaining relations with both its patrons through the dramas and tensions of the Sino-Soviet split to the end of the Cold War. But as Kim Il-sung contemplated the future survival of his regime, he concluded that a nuclear programme was essential insurance, both against his major enemies (the US and South Korea) and any territorial ambitions or excessive demands from China or Russia.

China was and remains North Korea’s major ally, but that does not make North Korea obedient. Their bilateral history is a story of growing defiance and increasing alienation: Kim Il-sung ignored Mao Zedong’s attempt to dissuade him from naming his eldest son, Kim Jong-il, as his successor. He had visited Beijing once a year and had promised that his son would follow suit, but Kim Jong-il only visited Deng Xiaoping’s China once, in 1983. His next visit came three years after Deng’s death, a death for which Kim had offered no formal condolences, as even the most minimal protocol required. 

On that visit, Kim heard the unwelcome news that China, already closer to the United States than he would have wished, was to open relations with his bitter rival, South Korea. When the third dynastic leader, the young Kim Jong-un, took power in 2011, relations with China slid further. Tellingly, Kim Jong-un has not visited Beijing at all, nor has China’s leader, President Xi Jinping, visited Pyongyang, although he has held four summit meetings with South Korea.

Kim Jong-un has made his defiance publicly evident. Not only has he chosen to test his missiles and weapons, but he has selected such highly sensitive moments as last year’s G20 summit in Hangzhou to do so.

China is propping up North Korea’s economy, but it seems to get little influence in return, and the value of the relationship has long been openly questioned by China’s foreign policy analysts. China has had little success in encouraging the regime to loosen controls on the economy and make limited market reforms.

 In the current crisis, China has consistently urged restraint, while co-operating with the tightening of UN sanctions. Beijing’s attitude, however, remains ambivalent: it doubts that sanctions will be effective, and is highly sensitive to US suggestions that Chinese companies that breach sanctions would be subject to punitive measures.  For China, the dangers of bringing North Korea to the edge of collapse are greater than the difficulties of seeking another solution.

Today, North Korea’s relations with Russia are warmer than those with Beijing and if President Trump is serious in his search for someone to solve his North Korea problem for him, he could do worse than to call his friend Mr Putin. No doubt there would be a price, but perhaps Trump would have less difficulty in appeasing Russia than in making concessions to Kim Jong-un. 

In July this year, China and Russia put forward a proposal that both sides should make concessions. North Korea would suspend its nuclear and its missile testing in return for a suspension of South Korea’s annual military exercises with the United States. Buried in the joint statement was the assertion that third parties should not negatively affect the interests of other countries.

Both China and Russia aim to reduce US influence in Asia, an ambition greatly aided to date by Trump’s withdrawal from the Trans-Pacific Partnership trade agreement, conceived as a vehicle of US influence; his treatment of long-standing US allies; and his decision to withdraw the US from the Paris agreement on climate change.

Today the US seems poised between demanding that China solve the North Korea problem and beginning a trade war with Beijing. China’s challenge on the Korean peninsula, always difficult, has grown even greater.

Isabel Hilton is the CEO of the China Dialogue Trust

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear