The Staggers

The New Statesman’s rolling politics blog

Cameron remains locked in a lose-lose situation on the euro

The PM attempts to appease Eurosceptic MPs while retaining British influence in the EU. He cannot have it both ways.

By Samira Shackle Published 07 December 2011 10:40

It is obvious that the crisis engulfing the eurozone has serious ramifications for Britain. It has also placed David Cameron in a tight spot politically, as he struggles to balance the demands of vociferous Eurosceptic MPs and a Franco-German alliance willing to forge ahead without Britain if it needs to.

As he prepares to join the EU's other 26 heads of government to discuss plans to save the euro, Cameron has attempted to navigate these contesting demands and set out his position in an article in the Times (£).

There are two key points to take from this piece. Firstly, Cameron dismisses calls for a referendum on any treaty changes by reiterating that this law only applies in the case of powers being transferred from Britain to the EU. At the weekend, Iain Duncan Smith added to Cameron's headache when he suggested that it could, in fact, apply to any "major treaty change", such as that required for greater fiscal union. Cameron also states that his demands will remain "practical and focused", despite calls from his MPs to use the talks to renegotiate social and employment law.

But he does not disregard his party's Eurosceptic wing entirely. The second key point is a hardening of rhetoric and a pledge to protect Britain's interests. Cameron warns that his focused approach should not be mistaken "for any lack of steel", and says that safeguards for the City of London will be the price of his support for any changes:

Our colleagues in the EU need to know that we will not agree to a treaty change that fails to protect our interests.

Essentially, Cameron is caught between a rock and a hard place. If he wants to create a treaty for all 27 EU member states, he must strike a conciliatory tone in talks with the rest of the EU. If, however, he prioritises an aggressive defence of Britain's interests, the likelihood is that the 17 eurozone countries will breakaway and form a treaty amongst themselves. In his piece, he addresses this possibility, saying that a treaty of 17 "would need to make sure our interests are protected".But it is unrealistic to think that Britain will not lose influence in such a scenario. Quite simply, he can't have it both ways, as my colleague Rafael Behr argued last week:

It doesn't look as if Britain has much of a say anyway, and either outcome gives Cameron a headache. If he can persuade the European Council later this week that all 27 EU members should be working on a new treaty, he invites his backbenchers to present him with a shopping list of powers to repatriate during the talks. If he accepts that it should just be a 17-strong euro member treaty negotiation, he risks surrendering Britain's seat in a discussion that is plainly vital to our national economic interest. That process might still produce a document that has to be ratified by parliament. One way or another, the clamour for a referendum will grow.

Cameron writes that "our biggest national interest is that the eurozone sorts out its problems", but from his posturing, it appears that he is not fully committed to this and remains trapped in a lose-lose situation. On the same day as the Prime Minister ramps up the rhetoric, veteran pro-Europe Tory Ken Clarke has told the FT that Britain should be a constructive player in resolving this crisis, focussing on "how to maintain the financial stability of the western world", not trying to wring concessions from eurozone countries. Quite simply, France and Germany have bigger fish to fry as they try to save the single currency, and they will have no problem with acting without Britain.

Special Offer: Get 12 issues of New Statesman magazine for just £12

Tags: Eurozone David Cameron Tories & Europe

More from Samira Shackle

20 comments

Wed, 2011-12-07 10:54 — Stu (not verified)

Yeah this article is so true. I fear that after saving europe twice we are about to be stabbed in the back. We can only do so much and whilst I support Cameron's stance it will be all for nothing.

If it came down to it, he could do no harm in declaring that 'they' have betrayed Britain and we should look towards other markets and co-operate with the Chinese, the middle east and india to grow our economy, we should have prepared ourselves a long time ago in tying links to the Chinese if it wasn't for our 'special relationship' with the US.

Wed, 2011-12-07 11:09 — nourredine (not verified)

To Stu,
Britain has links with China already.
Why do you think Cameron went to China last year talking to students?
China has £2000 billion invested in Europe and want to see how that investment is doing that' why Cameron,Sarkosy etc... went and received delegations from China.
In addition, Valery Giscard D'Estain, Mitterand (ex president of France) told Thacher,Major that they can have a veto over Europe but the day will come where they have to decide in or out.
I think the time is soon rather then later.

Wed, 2011-12-07 11:35 — frances smith (not verified)

funny thing about cameron is that at the point at which he is trying to appear tough, he always reveals his biggest weaknesses.

clearly cameron can't be seen to be the one who wrecks the attempts to save the euro, but at the same time he tries to play tough for his euro sceptics, but in the process he reveals what he most fears, which is the financial transaction tax. which other countries oppose too, so probably wouldn't get through anyway. but it probably means that things like regulation of food speculation could.

he is a poor negotiator, as he has now revealed his bottom line, by demanding the impossible.

Wed, 2011-12-07 11:44 — nourredine (not verified)

To Frances Smith,
One point were Cameron is trying to defend is the City.
Europe wants a federal state which means transfering the transaction from London to Paris and Franckfurt.
Cameron and his rich followers do not want to lose their big profits and big salaries.

Wed, 2011-12-07 11:50 — matthew fox (not verified)

What a brilliant idea, cosy up to the Chinese.

Stu, have you heard the term "Re-education Camps"?

Who do you think is propping up North Korea, Stu?

Wed, 2011-12-07 12:03 — Stu (not verified)

@nourredine
The UK of course, have always had international relations with China as we recognise them as a major power but with influences from the US and of course our moral stance on human rights we were always hindered.

France on the other hand have had no such morals. I remember reading an article that France had taken on infrastructure projects with China helping them build their first magnetic railway system, that earned them mega bucks... where were we?

On the news the other day they reported that China and some arab countries are investing in infrastructure in UK, this is highly welcomed and it's the beginning of what should be a gateway to long term business.

Wed, 2011-12-07 12:06 — Dominic Lynch O...

David Cameron should tell the little french fellow that he will stick him on the top of his Christmas Tree, to lighten up the mood for christmas.

Wed, 2011-12-07 12:10 — Stu (not verified)

@matty,
Of course I have but we cosy up with the US who prop up Isreal, Japan, Taiwan

The potential here is WW3, what I'm saying is, business is business of course we should be aware of some of the controversial issues...

Wed, 2011-12-07 12:40 — nourredine (not verified)

@Dominic Lynch Of Construction,
Cameron is so isolated from the reste of Europe that he can only beg for getting some concessions and i do not think he will hang anybody from Europe on his chrismas tree.
Think again it is about business not who's going to get the better of the over.
Remember what is his moto "we are in it together"

Wed, 2011-12-07 12:46 — nourredine (not verified)

@Stu,
Remind me who invented the railway and who advanced it for the faster one and who rejected the progress same question on space research.
May be we will agree the situation on infrastructure and industries today

Wed, 2011-12-07 12:57 — Stu (not verified)

@nourredine
Yes the UK invented this, that and the other but like you said today is a different world. The chinese are doing what we did a century ago, the east is where is it all happening and we should keep our options open capitalise where we can, beat other countries to it since 'they' clearly don't give a monkey's about us.

Wed, 2011-12-07 13:02 — nourredine (not verified)

@Stu,
I agree in part with you,but Cameron does know that if France goes bust so does Britain because of the so heaven safe his chancelor keep saying France banks have invested a lot in Britain, it is good to do business than not giving a monkey

Thu, 2011-12-08 12:56 — south pacific

As a non-European I must say I am amused about some of the comments here.

First most of you have no idea what UNION means. Perhaps that the reason why you don't want to be in the EU.

To be in would require team work and pulling in the same direction as others in the EU.

All you here talk about your, the British interests, you don't even acknowledge that other countries in the EU or EZ have also interests.

You should ask yourselves, does the continental countries need us or do we need them.

As for China, it certainly does not need Britain. What do you have to offer?? A small market of how many million? Two large Chinese cities have a larger population.
Why bother about a small country in Europe if China can sell to larger markets in Asia right next door.
What can you sell to China?? They have everything you can offer.

In my household there is only one British product, HP sauce because the wife likes it. Yes there is the odd Rolls Royce about, usually a wedding car but most wedding cars are now stretch limousines by other manufacturers.
Even if I wanted to buy a British product, what could it be? I don't drink scotch or gin.

The big questions of our time are not resolved by lengthy discussions but by hard work and industry.

Lengthy discussions = Europe

Hard work and industry = China

Which is more successful??
No need for my answer.

Even the US now thinks Asia has more to offer than Europe.

No surprise Asian money is keeping them afloat. Besides look at the numbers in the Asian markets. Not millions but billions.
However you need to produce something they want to buy.

No one wants financial services because they are provided by crooks. The whole world knows that by now.

Don't forget , hard work and industry
is the key to success.

Not everyone sits on a pile of gold and diamonds.

Wed, 2011-12-07 14:24 — Indu Pendent (not verified)

Good to see Cameron being a shit to the Germans and French putting British interests first. Its refreshing from Labour's approach of give give giving in to everything at the slightest pressure out of the party's elite fear of being seen to be in conclict. The Euro leaders got use to Labour and treated the Britain interest as pointless.

Afterall, if you have jetset champaigne and canope brunch meetings lifestyle you to make it look like you are important to your constituents - screw the UK's best interests.

With Thatcher, after a while the Euro leader didnt even both negotiating and just conceded lots of stuff easily to her because they new she would never surrender.

Cameron needs to show tough leadership and see how far he can piss off the Euro leaders by pushing British interests. He will need to take the bigoted sniping on the chin from people focused on their own self interest not on the national interest.

Wed, 2011-12-07 14:41 — Indu Pendent (not verified)

@matt

Foxy, some day you should jump over the hedge and see whats on the other side from your own field.

"What a brilliant idea, cosy up to the Chinese"

I thought Labour's approach was to be pally pally conceding everything in order to influence our international partners? Now you are saying we should stay clear of China to influence them.

Have you developed Hattie's skill of talking out of both sides of your mouth?

Wed, 2011-12-07 15:07 — nourredine (not verified)

@Indu Pendent,
Britain get more advantage with Europe than being uot of Europe that is why Cameron wants to argue to keep his advantages like London centre of business transaction in Europe,2 million jobs due to Europe, 50%of export in Europe, now the time is hard it is time to save Europe specialy the PIGS, it is a matter to make concessions and exchange.
I think now is the time to be in or out.
The choice of being out is limited because we loose more, it is for Cameron to treat with Europe to stay in but dificult to not join the Euro.

Wed, 2011-12-07 16:03 — matthew fox (not verified)

Stu, what you are saying is geo-politics is beyond your comprehension.

I think many Japanese and Taiwanese would ridicule your assessment of being a " Propped Up " country?

If your talking military alliances, that is a complete different conversation.

You forget, countries like Turkey and the Gulf States also have military alliances with the US, are they " Propped Up " countries as well?

Wed, 2011-12-07 16:27 — Stu (not verified)

@Matty,
Thanks for clarifying 'propped up'. I mistakened it for 'alliances' and of course US influence.

But I still say "business is business"

Wed, 2011-12-07 16:38 — matthew fox (not verified)

Glad to correct again Stu, anytime old bean.

Wed, 2011-12-07 21:20 — Tristan gray (not verified)

http://conflictandnews.blogspot.com/2011/12/cameron-between-rock-and-har...

Surprisingly similar to my own blog post.
It's completely right though, especially with the pressure S&P has not put on the Eurozone to unify for stability or face downgrading, Britain has the capability to seriously damage the economy of Europe in general by putting up a fuss