Either Britain will bail out the euro, or it won't. There's no middle way

David Cameron wants to fudge the issue with a technical argument about the IMF. It won't work.

Domestic debate around the euro crisis has taken yet another awkward turn for the prime minister. An essential aspect of the government's political strategy is to draw a clear distinctions between, on one side, a failing single currency project, ill-starred from the outset, and, on the other side, a wise Britain that chose to remain free to set its own interest rates and is blessed with a flexible exchange rate.

By extension, UK taxpayers should not be expected to contribute to a eurozone rescue fund. Greece's solvency woes are not, according to that argument, our problem. Except, of course, plainly they are, for at least two reasons. First, crisis in the eurozone is continuing to depress confidence and demand in the global economy, which is the main reason why growth is so sluggish in the UK. Second, if the Greek crisis is not contained, it will spread to larger European economies - Italy is next in the firing line - and a solvency crisis there would drag down those banks, including those in the UK, that hold European sovereign debt. A prolonged eurozone crisis will eventually become another banking crisis.

So it is in the UK's interests that a bailout works and if UK capital - whether administered through the IMF or bilaterally - is required for that outcome, well, then that surely is the national interest too. Downing Street is trying to delineate different kinds of contributions, attributing different moral weights depending on how "European" they look. If I understand it right, the ethical judgement maps out roughly as follows: If the IMF helps a struggling nation directly, that is a "good" bailout - and so UK taxpayer's money can be used. Britain might increase its IMF contributions on that basis. If the IMF joins forces with the ECB and eurozone governments to create a collective mechanism to support the euro that is a "bad" bailout - the UK would not increase its contributions on such a basis.

The obvious question is how the government plans to enforce the distinction before agreeing to pay more. The UK is already wading into deep diplomatic water by hinting it would hold any proposed EU treaty changes hostage, demanding repatriation of powers in exchange for cooperation. Now is it hinting it will withhold support for the IMF unless it gets guarantees that the Fund will not ally itself too closely with any European political project to save the euro?

Meanwhile, UK government policy - confirmed by Mark Hoban, Financial Secretary to the Treasury, in an emergency parliamentary debate today - is to impress on eurozone governments the "remorseless logic" of further fiscal integration.

So, just to be clear: The government (or at least its Conservative side) think it is a terrible idea for sovereign nations to bind themselves into a single currency and yet supports the urgent acceleration of that process. It rejects the contribution of British taxpayers' money to a bailout that might explicitly support a euro stabilisation process but would be happy to contribute to one that helped eurozone countries independently, thereby supporting euro stabilisation indirectly. This is not a sustainable position.

The ultimate problem for David Cameron remains the same as it has been for weeks. He has to choose between being a European statesman akin to his peers in Cannes and being an authentic Tory sceptic. Either he thinks the euro must succeed and that Britain, as a major EU player, must play a constructive role in working out a technical solution to the crisis. Or he thinks that Britain should step back from the whole disaster and, out of parsimony or moral horror at the idea of a Euro superstate, keep Treasury money away from the entire business. Or, to put it bluntly, either he is signing us up to a bailout or he isn't. He can try laundering the argument through technical IMF questions for a while. (And Labour seem for the time being to play along with the distinction.) But it won't work for long and it will be exposed by the sceptics as dishonest as soon as any debate on UK contributions comes to parliament.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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What can we learn from Liam Fox's book? (Or, at least, from the first chapter)

How Liam Fox helps us face the new era, using orcs, Socrates and his knowledge of general medicine.

It’s a weird and wacky world, people, and we reach for political theory as a way of understanding the myriad linkages – ideological, emotional – between collectives of all sorts and individuals. Reach for political theory, and more importantly political history, for surely it can only be through an understanding of history that we can hope to reach into the shaken-up snow-globe and make sure the itty-bitty little snowman doesn’t get blown to buggery by the winds of change? For profundities such as the above I am indebted, latterly, to Dr Liam Fox, the erstwhile defence minister and currently Theresa May’s International Trade supremo – latterly because I’m primarily indebted to civil servants in his new bailiwick who have revealed to Private Eye that Dr Fox has insisted that they buy his 2013 globalisation excursus, Rising Tides: Facing the Challenges of a New Era, if they want to do just that.

The Eye snarked that Dr Fox’s book had sold just 1,876 copies thus far, but in fact that’s a perfectly respectable sale for a title by a contemporary politician. Ask the residents of Southmoor in Essex how they feel about instantly remaindered political books – half the village disappeared last year into a sinkhole that opened up when thousands of copies of On a Clear Day by David Blunkett, which had been buried in an adjacent landfill, reached a critical point of putrefaction. Some might describe this as ironic, others as justice. Anyway, inspired by Dr Fox’s self-conviction, and wanting to know what we can expect from the man who will be guiding our destiny as a trading nation through the savage cross-currents in the coming years, I hied me to the Amazon cloud reader to read the free sample.

Some might say this was the act of a hack who cares naught for the intellectual property of other writers, and is not prepared to put in the hard work required to understand the full compass of Dr Fox’s thinking, but my view is that the man himself will sympathise with my raw intellectual hunger. So pithily apodeictic (though simultaneously lyrical) is his own writing, that I came away from the free sample richer, wiser, and well equipped to advance his ideas to New Statesman readers – for which I believe both he, and you, will be grateful.

So, I mentioned history earlier, but let the man himself tell you how important it is to him, and us. “I am not one of those who believes that history repeats itself in the most literal sense,” Dr Fox writes, “but I do believe that the types of problems we face are repeated in time and realm.” True, it’s hard to think which “those” he might be thinking of, beyond the character of Phil Connors in Groundhog Day, but otherwise I think this is positively seer-like stuff.

Dr Fox’s use of the slightly archaic “realm” in the above may have given you pause for thought. Masterful prose writer that he is, he is softening his readers up for what comes next: a quotation from that great chronicler of humankind’s history, J R R Tolkien. And this, if I interpret it rightly, suggests that when trying to understand the motivation of jihadists, our best guide is the psychology of, um, orcs. But the history of Middle Earth alone cannot supply wisdom – neither for concerned citizens nor for the elves who lead them. For that, we require additional professional expertise, and Dr Fox is once again our man. Like the great Socrates, upon whose method he has undoubtedly based his own, Dr Fox teases out the technê of statecraft by analogy with his own illustrious medical career, in which: “The first task was to gather all the data possible about the patient and their complaint.”

Yes! How true this is. It makes me think of a hypothetical patient (or politician) whose complaint is that although he once held one of the high offices of state – one that requires of its incumbent great probity and discretion – he nonetheless attended many important meetings accompanied by an adviser who had no security clearance, and who had extensive links to lobbyists for defence contractors. Further, it makes me hypothesise that this patient (or politician), set up a “charity” to fund the activities of this “adviser”, which in turn had to shut down because of a mephitic odour, which – were I to have Dr Fox’s training – I’d probably diagnose as symptomatic of rot. It’s true that Dr Fox cautions his readers to “skip over any detail which seems excessive”, but then again: “I believe history brings some context to the subjects covered, something I think is often missed in contemporary debate.” Yes; and if it were the case that the same hypothetical patient had overclaimed the most expenses of any Tory frontbencher – including the rent on a flat used by the aforementioned special adviser – well, that would seem to provide some context for understanding how he’d function were he, once more, to hold a high office of state.

These, it seems, are the sorts of things being missed by contemporary debate. It’s as if the result of the EU referendum in June hit some sort of hard reset in the British political system: everything was turned off and turned on again, and in the process we have indeed forgotten our history, and so, like Phil Connors, we are doomed to repeat it. Thank the Lord for Dr Fox, whose civil servants will by now have absorbed their new boss’s forensic credo. When he was a general practitioner, having dealt with his own patients’ history and placed their symptoms in the right context: “The third task was to determine the course of treatment in the light of best accepted practice and the most up-to-date information available.”

Hear, hear! Given that the most up-to-date information available is that our hypothetical patient-cum-politician is still mired in the rising tide of his own bullshit, the most advisable course of treatment would appear to be euthanasia. After all, Dr Fox isn’t one of those who believes that history literally repeats itself – so a second resignation is out of the question. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump