Blogs and Briefings
Realism or Radicalism? Cameron’s Euro Challenge
Connect’s Andrew Smith looks at what the European Summit will mean for the UK and the Prime Minister.
7 December
As David Cameron heads to the European Summit in Brussels tomorrow, he knows that it is not only the future of the Euro that is at stake, but also the future of his Government as splits over Europe threaten the future of the Coalition.
The danger the Prime Minister faces is that the measure of success at the summit is increasingly being defined by his colleagues as the extent of the powers he is able to win back from the EU, with any failure to achieve the significant repatriation of powers being a betrayal of Britain’s interest. Given that it was David Cameron, as a member of Michael Howard’s opposition team, who helped to introduce the Conservative commitment to renegotiation, Conservative colleagues are surprised by the Prime Minister’s decision to suggest that he will not push for significant repatriation of powers as his price for agreeing to a new treaty change.
Many colleagues are keen to pin the blame on the Coalition and the need for the Prime Minister to placate his pro-European Lib Dem colleagues. The realities of Coalition politics have tempered the Prime Minister’s euro-scepticism, but when it comes to Britain’s interests it is also the case that he finds himself squeezed between competing theories; a realist one and a radical one.
The realist view considers that, despite the UK’s long term doubts about the viability of the Euro, the importance of the EU to the UK’s export markets means that avoiding the breakup of the currency is essential to the UK’s economic interest. The primary aim, therefore, of the UK’s negotiating tactic this week should be to help to facilitate a swift but binding agreement to increase fiscal and economic co-ordination within the Eurozone that will secure its future.
This school of thought would argue that, despite past promises to use any treaty change to bring back powers to from the EU to the UK, the potential advantages of being able to regain our-opt out from the social chapter or take more control of fish stocks are small compared to the clear and almost unquantifiable risks to the UK economy from the breakup of the Eurozone.
Against this view is a more radical one that is now shared by the majority of Conservative MPs. This view argues that the UK needs to take radical steps to change its relationship with the EU and that the depth of the Euro crisis, rather than a reason not to rock the boat, ought to be used as an opportunity to deliver a fundamental renegotiation of the relationship.
Given the problems that have resulted from combining disparate economies under one currency zone, the radicals would also suggest that, rather than securing the long-term future of the Euro, the UK’s support for fiscal union means that it is becoming complicit in creating an unsustainable system which threatens greater problems in the future.
It seems that the Prime Minister has been persuaded by the realist case because of his view that the depth of the crisis and the possible collapse of the Euro zone is an immediate and direct threat to the UK’s economic prospects. Even if the Euro does not survive in its current form, his position seems to be that there is little to be gained by the UK being seen to be willing the economic pain resulting from a collapse.
Much of the debate about the opportunities for the UK to develop a looser relationship with the European Union seem to take the existence of a single market, and the opportunities it offers to UK exporters of jobs and services, for granted.
The fact that the one red line that the Prime Minster has made clear ahead of the summit is the protection of the interests of the UK’s financial services sector shows that Cameron is less sanguine about the future. Despite the fact that the UK will not be involved in Eurozone fiscal co-operation, decisions taken on a Eurozone-wide basis will have an impact on UK-based businesses. His desire to strike a hard bargain with the EU will therefore need to be balanced by our ability to influence the decisions taken by its core members.
Despite the Prime Minister’s view that this realist approach is the most effective way of standing up for Britain’s interest, it is clear that many in his own party fundamentally disagree with this approach. Recent interventions from the right of his party show that many believe that the UK needs to take a more radical approach, and that anything less than a significant repatriation of powers will be seen as failure.
As he heads to Brussels, he will know that he has a tightrope to walk between these competing views of the UK’s interests and the differing attitudes to the EU held by his Conservative colleagues and his Coalition partners. Despite the Prime Minister’s tactic of expectation management ahead of the summit, it is difficult to see how any likely outcome will satisfy the Conservative right. His ability to persuade his colleagues and the public that the outcome of the summit is a success for Britain’s interests could be what defines the success or failure of his period as Prime Minister.
