There is devilish detail in the new euro pact

Forget use of EU buildings, the threat is members of the new fiscal union cooking up deals that affe

The issue of David Cameron's "phantom" European veto has fallen out of the headlines pretty quickly, ousted from the agenda by the news of Fred Goodwin losing his Knighthood. (The announcement landed yesterday, by remarkable coincidence, within moments of the Prime Minister getting a bit duffed up in a Commons statement on Monday's European summit and after a weekend of bad headlines around banker bonuses.)

Conservative Eurosceptics, however, will not forget how the gesture of anti-Brussels defiance they so celebrated in December has turned, as they see it, into a supplicant bow to the forces of continental integration. It doesn't help that the Lib Dems are conspicuously pleased by Cameron's restoration of normal diplomatic service with regard to the EU.

As I wrote last week, upholding the spirit of the "veto" to the satisfaction of Tory back benchers and doing what it takes to secure British influence in European Union diplomacy were mutually exclusive demands. In fact, it seems, Cameron has done neither.

The sceptics have concentrated on the Prime Minister's failure to prevent signatories to the new Fiscal Union (FU) treaty using EU institutions to enforce their agreement. That was always a bizarre and unrealistic fixation. If Britain's position is to support other countries pursuing their plan, why would we sabotage the obvious mechanism for making it work. (There is an argument that says Britain should be opposing FU on the principle that any countries surrendering control of their budgets to a central European authority and insisting on choreographed austerity in the middle of a downturn is bonkers - but that is a different matter and definitely not government policy.)

The real issue for concern, as far as British influence is concerned, is not the use of institutions by the FU members, but the prospect that they will crowd the UK out in discussions of the single market. This is the problem that euro-wonks refer to as "caucusing" - the danger that plans will be hatched, positions agree, alliances cemented within the FU members that can then be presented at European Council meetings as faits accomplis.

This is not a threat for today or even tomorrow, but it is clearly a problem and potentially a very big one. If Britain struggles to build alliances in the Council it can get outvoted on things that matter deeply to our economy - on tax and regulation policy, for example. In the past, this hasn't happened too often, but the new FU structures, including regular summits (combined with some ill will generated by the whole "veto" episode) make caucusing much more likely.

Thus, as I have written before, the eurosceptic prophecy is self-fulfilling. Marginalisation diminishes influence leading to bad deals, suspicion of a conspiracy and more marginalisation. Onward towards the exit. Cameron told a press conference in Brussels that the government would "take action" if there was any sign of the FU members "encroaching on the single market". And that he would watch out for such encroachment "like a hawk". He didn't say what action would or could be taken.

The main safeguard in the draft fiscal union treaty appears to be in the preamble:

NOTING, in particular, the wish of the Contracting Parties to make more active use of enhanced cooperation, as provided for in Article 20 of the Treaty on European Union and in Articles 326 to 334 of the Treaty on the Functioning of the European Union, without undermining the internal market, as well as to make full recourse to measures specific to the Member States whose currency is the euro pursuant to Article 136 of the Treaty on the Functioning of the European Union, and to a procedure for the ex ante discussion and coordination among the Contracting Parties whose currency is the euro of all major economic policy reforms planned by them, with a view to benchmarking best practices.

Yes, I know that isn't even a sentence - such is the language of European treaties. Anyway, in something approximating English, this seems to be saying that the FU treaty is recognised as a special deal between some but not all existing EU member states - "enhanced cooperation" - for which a legal framework already exists in the much revised founding treaties of the EU.

The key passage on "enhanced cooperation" in the Treaty on the Functioning of the European Union says:

Such cooperation shall not undermine the internal market or economic, social and territorial cohesion. It shall not constitute a barrier to or discrimination in trade between Member States, nor shall it distort competition between them.

In other words, cooperation between FU members mustn't formally skew the single market against the non-FU members (Britain and the Czech Republic). In practice, however, some or all FU members could end up deciding on things that would subsequently be put to a full EU Council and comfortably outvote Britain.

To what extent this will happen and what Cameron could do about it are the real questions that should be asked about the changing nature of Britain's status within the EU after Monday.

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

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In your 30s? You missed out on £26,000 and you're not even protesting

The 1980s kids seem resigned to their fate - for now. 

Imagine you’re in your thirties, and you’re renting in a shared house, on roughly the same pay you earned five years ago. Now imagine you have a friend, also in their thirties. This friend owns their own home, gets pay rises every year and has a more generous pension to beat. In fact, they are twice as rich as you. 

When you try to talk about how worried you are about your financial situation, the friend shrugs and says: “I was in that situation too.”

Un-friend, right? But this is, in fact, reality. A study from the Institute for Fiscal Studies found that Brits in their early thirties have a median wealth of £27,000. But ten years ago, a thirty something had £53,000. In other words, that unbearable friend is just someone exactly the same as you, who is now in their forties. 

Not only do Brits born in the early 1980s have half the wealth they would have had if they were born in the 1970s, but they are the first generation to be in this position since World War II.  According to the IFS study, each cohort has got progressively richer. But then, just as the 1980s kids were reaching adulthood, a couple of things happened at once.

House prices raced ahead of wages. Employers made pensions less generous. And, at the crucial point that the 1980s kids were finding their feet in the jobs market, the recession struck. The 1980s kids didn’t manage to buy homes in time to take advantage of low mortgage rates. Instead, they are stuck paying increasing amounts of rent. 

If the wealth distribution between someone in their 30s and someone in their 40s is stark, this is only the starting point in intergenerational inequality. The IFS expects pensioners’ incomes to race ahead of workers in the coming decade. 

So why, given this unprecedented reversal in fortunes, are Brits in their early thirties not marching in the streets? Why are they not burning tyres outside the Treasury while shouting: “Give us out £26k back?” 

The obvious fact that no one is going to be protesting their granny’s good fortune aside, it seems one reason for the 1980s kids’ resignation is they are still in denial. One thirty something wrote to The Staggers that the idea of being able to buy a house had become too abstract to worry about. Instead:

“You just try and get through this month and then worry about next month, which is probably self-defeating, but I think it's quite tough to get in the mindset that you're going to put something by so maybe in 10 years you can buy a shoebox a two-hour train ride from where you actually want to be.”

Another reflected that “people keep saying ‘something will turn up’”.

The Staggers turned to our resident thirty something, Yo Zushi, for his thoughts. He agreed with the IFS analysis that the recession mattered:

"We were spoiled by an artificially inflated balloon of cheap credit and growing up was something you did… later. Then the crash came in 2007-2008, and it became something we couldn’t afford to do. 

I would have got round to becoming comfortably off, I tell myself, had I been given another ten years of amoral capitalist boom to do so. Many of those who were born in the early 1970s drifted along, took a nap and woke up in possession of a house, all mod cons and a decent-paying job. But we slightly younger Gen X-ers followed in their slipstream and somehow fell off the edge. Oh well. "

Will the inertia of the1980s kids last? Perhaps – but Zushi sees in the support for Jeremy Corbyn, a swell of feeling at last. “Our lack of access to the life we were promised in our teens has woken many of us up to why things suck. That’s a good thing. 

“And now we have Corbyn to help sort it all out. That’s not meant sarcastically – I really think he’ll do it.”