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20 October 2011

Grown-up European or hero to the backbenchers? Cameron can’t be both

It does Britain no good to look like the sulky teenager of Europe.

By Rafael Behr

The pattern of the crisis in Europe’s single currency has been for the unthinkable very quickly to become the thought. First, the idea of a euro member defaulting on its debt was declared impossible. It is now hard to see Greece avoiding that fate. Then it was unimaginable that a nation might be forced to leave the single currency. Now that prospect haunts the imaginations of European leaders. The French president, Nicolas Sarkozy, warned on 18 October that political inaction was risking both “the destruction of the euro” and “the destruction of Europe“. What does that leave unthought?

Following this trend, the idea of Britain leaving the European Union, once a fetish of the political fringes, has made a dash for the mainstream. Thanks to an online campaign and deft backbench manoeuvring, a motion calling for a wide-ranging referendum on the UK’s relationship with Brussels has made it on to the parliamentary agenda for 27 October. The vote will not be binding but that doesn’t matter to eurosceptic MPs. Their mission is not to force Britons to decide if they want to quit the EU straight away but to normalise the question.

The timing could hardly be worse. On 23 October, David Cameron will attend an emergency EU summit where he wants to impress on his fellow leaders the need for urgent action to get the European economy moving again. It does not help that his party is rehearsing an anti-Europe pantomime in the background.

Big bazooka

One of the wilder delusions to affect Tory eurosceptics is the belief that Britain’s negotiating position is strengthened by the threat of departure. Fear of losing a rich nation from the club, this argument goes, focuses continental minds on the need to accommodate Britain’s demands. What that view fails to recognise is that, seen from the European perspective, the UK’s demanding days are over. Germany, in particular, is fed up with Britain behaving like a surly teenager in Europe, sulking and slamming diplomatic doors.

In opposition, the Tories underestimated the offence caused by the decision to pull out of the European People’s Party (EPP), the group in the European parliament that includes the German chancellor Angela Merkel’s Christian Democrat party. David Cameron thought ditching the EPP and hooking up with some minor eastern Europeans instead was a cost-free gesture to placate his restive eurosceptic members. Privately, senior Tories now concede the move lost them credibility and influence. When he became Prime Minister, Cameron had to launch a charm offensive, persuading Merkel that he could be a mature European.

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Sending that signal is more important than ever now that the EU is facing a crisis of political solidarity. The pressure from financial markets on banks and sovereign debtors will not ease as long as there are doubts about the will of European leaders to take the unpopular measures required to stabilise the single currency. Crudely speaking, markets want countries with money and a sound credit rating to honour, without reservation, the debts of countries that are broke. In exchange, the debtor nations are supposed to surrender control of their economic policies, submitting their budgets for wider European approval. The single currency has to become the basis for deeper political union. That is the outcome endorsed by David Cameron and George Osborne. The PM has called for eurozone leaders to deploy a “big bazooka” approach to blast away market anxiety.

The Chancellor has talked about the “remorseless logic” of further eurozone integration. This urgency is not born of affection for the ideal of European integration but from anxiety at the prospect of what the eurozone crisis might do to the British economy. Senior figures at the top of government are, I’m told, now steeling themselves for the possibility that the economy will see out 2011 in recession. If that is the case, George Osborne will heap blame on the euro crisis for blowing his plans off course. Conservative MPs are primed to see Europe as the source of all of Britain’s problems, economic and otherwise. There is less enthusiasm for the government’s acceptance of eurozone consolidation as part of the solution. Hard-line eurosceptics see institutional integration as an affront to democracy, distasteful even when Britain is not included. It is hard to escape the hypocrisy of Cameron and Osborne telling other nations to pursue an agenda that UK diplomacy has always resisted and that the Tory party despises.

Boris Johnson, Conservative Mayor of London, has described as “absolutely crazy” the idea that more integration might be the answer to the eurozone’s difficulties. Johnson is perhaps more sensitive than Osborne and Cameron to the implications for the City of London should the eurozone graduate into a more politically unified bloc. It is unlikely that such an entity would tolerate having the continent’s main financial centre outside its borders. Paris, in particular, would wage regulatory war against the Square Mile.

Going sceptic

Meanwhile, lurking in many Tory minds is the suspicion that the government’s European policy is smeared with grubby yellow Liberal Democrat fingerprints. That is partly true. Nick Clegg, according to one senior official, was “tearing his hair out” over the coalition’s failure to express a view on the euro crisis during the summer and helped nudge the Prime Minister towards his “big bazooka” position.

In reality, there is nothing Cameron could have said that would placate the Tory eurosceptics. Their agenda and the government’s are incompatible. The PM wants the euro crisis to be resolved through diplomacy and without the need for any grand redrafting of EU treaties. The sceptics need to amplify the crisis so that a great renegotiation becomes inevitable. There is, however, a base instinct, shared between Tory front and back benches, to make sure Europe gets the blame when the British economy grinds to a complete halt.

At that moment the Chancellor and the Prime Minister will face a profound dilemma. They can be responsible European statesmen, working through the channels of Brussels diplomacy to co-ordinate a response to the crisis. Or they can be heroes to their party. They cannot be both.

Rafael Behr is chief political commentator of the New Statesman

[See also: Can Britain ever rejoin the EU?]

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