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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

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

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.