The UK after the EU summit

by Chris Bertram on December 13, 2011

David Cameron’s use of the veto in the recent EU summit opens an era of deep uncertainty (and possible catastrophe) for British and European politics. Two things seem to be true: Cameron is an incompetent opportunist in thrall to his backbenchers and the proposed treaty is a disaster for the Eurozone countries themselves. The fact that it is a disaster (a fact recognized by Francois Hollande’s declared intention to renegotiate) might seem to give some support to Cameron. But of course it doesn’t, since the remaining 26 countries will just go ahead without the UK. All Cameron has done is isolate and exclude himself. As one MEP is reported as saying today, “If you’re not at the table, you’re on the menu.”

Cameron vetoed the proposed EU treaty on the basis, or pretext, that other countries wouldn’t agree to “safeguards” for the City of London. The reason he was asking for these was essentially just because his backbenchers had demanded he show the “bulldog spirit” and, since EU treaties need unanimity, he thought he could extract some symbolic gain to satisfy them. He didn’t clear this with Merkel or Sarkozy in advance and would have been inhibited in doing so because the British Tories withdrew from the mainstream Euro conservative grouping in order to hob-nob with a bunch of extreme nutters and anti-semites. Sarkozy, who wanted a more integrated core Europe without Britain in any case, took the opportunity to call Cameron’s bluff. All very good for Sarko in the run-up the the Presidential elections. Exit Cameron stage right, claiming to have stood up to the EU - and getting praised by the UK’s tabloid press and an opinion-poll boost – but actually exposing the City to further regulation under qualified majority voting. He’s also chucked away decades of British policy which favoured EU expansion with the new accession countries serving as a counterweight to the Franco-German axis. Where are the other countries now? Lined up with the French and Germans.

The Euro treaty itself, assuming it goes ahead as planned and is enforced, mandates balanced budgets and empowers the Eurocrats to vet national budgets and punish offenders. Social democracy is thereby effectively rendered illegal in the Eurozone in both its “social” and “democracy” aspects. Daniel put it thus :

a takeover of Europe by the neoliberal “permanent government” who failed to get their way by democratic means. All of the nationalism and anti-German sentiment is a distraction from the real scandal here. The ‘technocrats’ (which is apparently what they want to be called, although frankly I am seeing a lot of ideology and not much technical ability) want to reorganise the whole of Europe on neoliberal lines (ironically, to basically replicate the Irish economic transformation

One might think, then, that the left should be happy to be well away from it and that Cameron has inadvertently done us a favour. However, the short-term consequences in British politics could well be awful. My worst-case fantasy scenario has Cameron calling a snap General Election on nationalist themes, getting a majority dominated by swivel-eyed propertarian xenophobes and dismantling the welfare state, the Health Service, the BBC etc. Riots and civil disorder would be met with force, and those driven to resistance or crime would be incarcerated in giant new prisons. The Scots would then, understandably, opt for independence, and England and Wales would be left at the mercy of the crazies for several decades. Texas-on-Thames, in short.

And Nick Clegg? Well I wonder if even Daragh McDowell will make a case for him now.

{ 102 comments }

1

Mandos 12.13.11 at 4:39 pm

An alternative perspective

I think that Cameron did the right thing for the wrong reasons.

2

Andreas Moser 12.13.11 at 4:44 pm

I am happy to have left the UK just in time before the UK leaves the EU.

3

Alex 12.13.11 at 4:44 pm

If so, this would be the first time essentially ever that anyone won a British election on euroscepticism. That euroscepticism is popular is a myth; more Britons who care deeply about the European Union dislike it than like it, but caring about it puts you in a tiny minority. Europhiles and Europhobes, taken together, are a minority even of the politically engaged.

You would think, given all the fuss about it over the years, that someone would have won something with it by now.

4

Phil Ruse 12.13.11 at 4:47 pm

It’s a bit rich to accuse him of incompetence for the veto of a treaty that you readily admit would be a disaster. Having your cake etc.

5

Chris Bertram 12.13.11 at 4:52 pm

Alex, euroscepticism doesn’t have to be _all that popular_ for a eurosceptic-dominated Tory party to win an election, especially if the LibDems collapse and the new constituency boundaries favour the Tories. Even a tiny xenophobic bounce might be enough.

6

Chris Bertram 12.13.11 at 4:54 pm

Phil, incompetent because _he didn’t actually stop the treaty_ but just undermined the UK position. Had gun, shot self in foot, proclaimed victory. That’s Cameron.

7

Sebastian 12.13.11 at 4:55 pm

“The fact that it is a disaster (a fact recognized by Francois Hollande’s declared intention to renegotiate) might seem to give some support to Cameron. But of course it doesn’t, since the remaining 26 countries will just go ahead without the UK. All Cameron has done is isolate and exclude himself. “

I don’t remotely have an interest in UK politics, so maybe I’m missing some nuance. The plans to save the euro thusfar appear to be akin to a blackjack player whose entire system consists of doubling his bet every time he loses because “eventually I have to win it all back”. The proper response to that is to walk away.

You seem to be assuming that these reforms will save the euro. What if they won’t, and it really is a disaster?

8

Latro 12.13.11 at 5:01 pm

Dont know, if dismantling the welfare state is the objective he could just support the Treaty, which seems to have that as his only rationalization possible outside the “we will bring prosperity by cutting!” mantra.

Of course, he may reject having Brussels enact the cuts and not be seen as the one with the scissors?

9

Chris Bertram 12.13.11 at 5:02 pm

I think the euro will survive, Sebastian, but that it will do so at the cost of a social and economic disaster that will affect everyone, including the UK. The UK gains nothing from walking away, it does lose masses of influence and credibility in the short term, and faces possible exclusion from European markets in the longer term.

10

dsquared 12.13.11 at 5:05 pm

I don’t agree that the 26 can do all that much to us with QMV, and I think that the “if you’re not at the table you’re on the menu” line was also made in the 1990s about EMU itself and hasn’t been borne out.

For one thing, there is very much a limit to what the 26 could do even if they were a unified bloc. They can’t pass taxes and they can’t do anything that prejudices our rights under the Single European Market. They can do all sorts of things with financial regulation (ironically, the main effect of this and one of the main things David Cameron was going into bat for, is that it might end up being impossible to implement the ICBC’s ring-fencing proposals), but actually the City is the classic industrial cluster that just continues to organise itself around regulatory change.

For another, as I put it on Twitter the other day, passing this accord doesn’t mean that Germany is going to start producing olive oil. All the old rivalries and tensions still exist within the block of 26 under the new agreement. Germany will still block with us on agriculture, France on energy and defence, etc etc.

I think that this might have been my perfect outcome – Cameron adopts my preferred policy, but nevertheless comes home looking a dick and the coalition fatally weakened. I am slightly worried, however, that nearly everyone else whose opinion I rate analyses it differently.

11

Rich Puchalsky 12.13.11 at 5:12 pm

I don’t understand this opinion at all. The UK is not in the Eurozone, so why not veto this? Why join in to a process that, as you say, seems to doom social democracy? You seem to think that by not vetoing, he could have stopped the treaty — how? Literally everyone else who I’ve read on this subject has written something like “I hate Cameron, but this time perhaps by accident he finally did something good.”

12

Walt 12.13.11 at 5:17 pm

Sebastian: The real argument is that this doubling down doesn’t require the participation or consent of the UK. The participants chose a venue that gave Cameron a chance to make unrelated demands — it’s not like Cameron tried to shoot down the proposed deal because he thinks its a bad idea. It’s essentially the policy he’s pursuing domestically. The net effect of this was that the participants just got pissed off, and changed venues.

13

Chris Bertram 12.13.11 at 5:19 pm

You seem to think that by not vetoing, he could have stopped the treaty—how?

No. Whether Cameron vetoed or not made no difference at all to whether the shitty treaty went ahead, so in itself that makes no difference to what he should have done. All he’s managed to do is to isolate the UK, which, ceteris paribus, is a bad thing.

14

Rich Puchalsky 12.13.11 at 5:24 pm

Is isolating the UK really that bad? It seems to me that that makes it easier for the UK to reverse austerity policies, if they ever get new leadership. No one believes that Cameron did the right thing for the right reasons. It’s more that, when he gets replaced, he hasn’t committed the UK to continuing his disastrous policies.

15

Michael Mouse 12.13.11 at 5:25 pm

The fuss about Cameron is helpfully obscuring the fact that the “fiscal stability union” isn’t remotely a fiscal union, if indeed it turns out to be anything at all. We already know it isn’t going to help fiscal stability in the long term, even without any detail about just how binding it will actually prove to be – in the years running up to the crisis, Spain and Ireland were well within its proposed limits, and Germany was regularly beyond them.

It also hasn’t served as sufficient political smokescreen to permit the ECB to turn on the euro tap.

But the fuss appears to be enough distraction to keep the show on the road for another few months, which as an incremental strategy is working out way better than I expected.

16

Chris Bertram 12.13.11 at 5:27 pm

_It seems to me that that makes it easier for the UK to reverse austerity policies_

No, because the UK is outside the euro, it makes no difference either way.

(I could be wrong about this, if the treaty in some way made it possible to enforce balanced budgets on non-eurozone countries, but I’m pretty sure that this isn’t so.)

17

Salem 12.13.11 at 5:34 pm

None of us knows what the long-term outcomes of this veto will be in terms of European power politics. And none of us knows what Cameron’s realistic alternatives were. So it’s hard to take the original post terribly seriously.

If we assume (perhaps falsely) that the only options were signing up to the treaty as it stands, and a veto, then the veto was the only option in terms of British domestic politics, both inside and outside the Conservative Party. It might make eurozone governance marginally harder, but considering the nature of that attempted governance, that’s hardly a drawback. It’s highly unlikely to have major domestic consequences. I don’t understand the hysteria.

18

otto 12.13.11 at 5:43 pm

“I don’t agree that the 26 can do all that much to us with QMV, and I think that the “if you’re not at the table you’re on the menu” line was also made in the 1990s about EMU itself and hasn’t been borne out.”

Exactly. And above all, its too soon to tell, because the people who didn’t want the UK to do what it did are trying to make what fuss they can, but that fuss is a very poor measure of the tangible consequences, adverse or otherwise. It’s far from clear that UK influence will be undermined and French and German enthusiasm for not meeting Cameron’s demands may well wane over time.

19

Adam Roberts 12.13.11 at 6:01 pm

The Texas-on-Thames scenario is looking depressingly likely, even inevitable, I fear. Indeed, the Eurosceptic right are starting to pick this up as a positive slogan — not Texas, of course, but England (shorn of the Celtic fringes) as a second Switzerland, with Swiss levels of prosperity and generalised small-c conservatism as a function of a combined withdrawal from Europe and devolution. I can’t see it myself: the structural differences between Switzerland and England are surely too massive. But I’ve heard more than one right-wing politician make precisely this analogy.

20

Substance McGravitas 12.13.11 at 6:02 pm

No, because the UK is outside the euro, it makes no difference either way.

Okay…not getting it. Everyone seems to think the treaty is crazy, and I agree with Mandos. I’m still not seeing the problem. What does the “isolation” consist of?

21

William Timberman 12.13.11 at 6:06 pm

Well, this may be a Cliff Notes or Classics Illustrated view of European history, and Cameron may be a Tory putz, but it seems to me that Britons never, never, never shall be willing to let a German-appointed overseer of fiscal rectitude inspect their books.

22

Marshall 12.13.11 at 6:08 pm

This is over-the-top denigration of Cameron, who’s odious, but not because of this. The UK’s European policy has basically been nonsense for awhile now (under the previous government as well)–as long as it took the line that it would sign any agreement that minimized the British contribution to the EU budget and shielded the City from European oversight, it removed itself from any substantive contribution to EU policy debates, since it could be bought off in any deal that Germany and France reached. That has a certain logic with respect to British politics, but it means that the EU went off on its own (vastly misguided) path to oblivion, without any constructive input the UK could have offered. Had Merkel and Sarkozy offered a major revision, Cameron would have been shortsighted had he refused it to protect the financial sector, but they didn’t, so he wasn’t. The policy is disastrous; Cameron is responsible for moving the UK as far away from it as possible.

23

Marshall 12.13.11 at 6:11 pm

What, in substance, do you mean by saying the UK loses “massive influence” by vetoing this? The UK never had massive influence on EU economic policy–if it did, it could have steered the EU away from this mess of a treaty. You’re conceding that there was no real alternative on the table; that’s evidence of the UK’s prior lack of influence.

24

Chris Bertram 12.13.11 at 6:23 pm

_What, in substance, do you mean by saying the UK loses “massive influence” by vetoing this? _

I mean that the UK has pissed off (and mystified) the Swedes, the Danes, the Dutch, the Baltics, the Poles etc, all of whom were open to voting with the UK on a range of issues. Maybe they still are and I’m being over-pessimistic.

25

Steve LaBonne 12.13.11 at 6:26 pm

I’m not a process liberal, so when people get to the right outcome I don’t care very much about their motives for doing so. If I were British I would have many reasons to hate Cameron with the fire of 1,000 suns, but this wouldn’t be one of them.

26

Marshall 12.13.11 at 6:32 pm

You might be right that there’s a host of smaller countries ready to follow the UK’s lead toward better EU policy in a different European paradigm. But the status quo is that those countries allow themselves to be ruled by Franco-German consensus, with the alternative being ad-hoc distancing, not something different and coherent. In the existing context, the best strategy for everyone is to distance as best they can. That’s what Cameron’s done, consistent with his predecessors.

[I believe there were those who argued, as you do, that the UK should have joined the Euro to preserve some of this mythical influence. Of course we have no observation on the counter-factual, but I don’t think that looks good in any cost-benefit analysis at this stage.]

27

otto 12.13.11 at 6:32 pm

Not really disagreeing with Marshall but re. “any constructive input the UK could have offered”, it should be clear over that F and G are not really open to the sort of ‘constructive input’ that the UK generates on the common currency question.

28

otto 12.13.11 at 6:33 pm

“the UK has pissed off (and mystified) the Swedes, the Danes, the Dutch, the Baltics, the Poles”

What is the evidence for this?

29

Chris Bertram 12.13.11 at 6:40 pm

_I believe there were those who argued, as you do, that the UK should have joined the Euro to preserve some of this mythical influence. _

No, just to be clear, I’ve _never_ favoured the UK joining the euro.

30

Paddy Matthews 12.13.11 at 6:44 pm

But many countries are only following the Germans’ lead with reluctance. The agreement only came about because investors are shunning the bonds of ailing euro-zone countries, and because even the strong countries are facing the possibility of having their creditworthiness downgraded by the rating agencies.

According to Barroso, Merkel and Sarkozy are trying to impose their views on everyone else, even though they themselves can hardly agree on any issue. The fact that the majority of countries bowed to the German-French duo in the end shows how dependent the EU is on its two biggest financiers. Cypriot President Dimitris Christofias described the dilemma in a nutshell: “We really ought to engineer a revolution against Merkel and Sarkozy, but each of us needs the two of them for something.”

That doesn’t sound to me like a long-term prospect for happy families and Britain may actually benefit in the long-term where relations with the other 24 are concerned. Certainly the Irish government – for their own selfish and strategic interests – are anxious to keep ties as strong as possible. I don’t think they have any illusions about the respect that the smaller countries are going to get shown by Merkozy.

31

Paddy Matthews 12.13.11 at 6:46 pm

The previous quote came from Spiegel.

Like Mandos, Cameron may well have ended up doing the right thing for the wrong reasons.

32

Neville Morley 12.13.11 at 6:46 pm

Several different strands to this… Cameron’s veto makes it slightly harder for the 26 to develop and implement their plans, because they’re going to have to waste time dealing with the argument that they can’t use EU institutions, personnel or buildings to do so; this may or may not be trivial in the greater scheme of things – risk of yet more delays to action, hence of spooking markets further, I guess – but it’s yet more grounds for everyone else feeling deeply irritated with the UK. Whether or not there would have been any positive influence on the development of those plans if the UK were still involved seems doubtful, certainly under the current regime, but it’s not impossible; Sarkozy clearly wanted to exclude the UK, but it’s not clear that this was a universal view; various smaller countries, esp. those hovering outside the Euro, might have welcomed a counterbalance to the French-German axis.

As far as UK interests are concerned, given that the proposed controls on state budgets etc. would have applied only to Eurozone countries, it’s difficult to see what the country would have lost by continuing to play a part in negotiations, and clearly it is in the UK’s economic interest for the Eurozone to get its act together – staying involved might not have helped, but it wouldn’t so blatantly have hindered. The gain from Cameron’s veto is solely domestic and political, gaining him loud applause from Eurosceptic backbenchers and the right-wing press – but with the risk of serious tensions in the coalition, and the fact that the aforementioned backbenchers see this not as a great victory but as the first step towards complete disengagement. Cameron has if anything shown his weakness by this alleged show of strength. The risk, for those of us who prefer to think of ourselves as Europeans, is that this is the first step on a slippery slope to complete disengagement on the most idiotic of grounds – note the shift in public opinion on Europe cited in John Harris’ article in the Grauniad this morning – Europhobia.

33

Neville Morley 12.13.11 at 6:48 pm

Edit last sentence: “Note the shift in UK public opinion on the subject of Europe…”

34

Alex 12.13.11 at 6:50 pm

My worst-case fantasy scenario has Cameron calling a snap General Election on nationalist themes

For someone who doesn’t think being eurosceptic is a valuable electoral proposition…

35

Marshall 12.13.11 at 7:01 pm

Paddy’s quote does at least suggest there’s room for a coherent opposition to the Franco-German consensus. If that were the case, than shame on Cameron for not leading it. But THAT would have been a major (and probably politically untenable) shift in UK policy, not what Cameron actually did. Rather, I think otto is correct that there’s no space in practice for opposing the Franco-German paradigm, which case Cameron acted responsibly.

[And BTW, I didn’t mean to suggest that Chris supported the UK’s adopting the Euro. I rather meant to highlight the thin-ness of the argument that there are glorious returns to knuckling under to the European status quo, which really hasn’t changed since 1999 despite it’s failed completely.]

36

Walt 12.13.11 at 7:27 pm

Steve, the thing is that right now Cameron didn’t affect the outcome at all. Britain is not in the euro, so the terms of the treaty don’t affect it. They were only party to negotiations because the euro is politically part of the EU. If Cameron had killed the deal as part of saving Europe from itself, then he might have had a positive impact. Now the only effect is that he made the UK look bad.

(This assumes that the new debt limits don’t apply to non-euro-zone countries, such as the UK. )

37

Peter Briffa 12.13.11 at 7:34 pm

“My worst-case fantasy scenario has Cameron calling a snap General Election on nationalist themes, getting a majority dominated by swivel-eyed propertarian xenophobes and dismantling the welfare state, the Health Service, the BBC etc. Riots and civil disorder would be met with force, and those driven to resistance or crime would be incarcerated in giant new prisons. The Scots would then, understandably, opt for independence, and England and Wales would be left at the mercy of the crazies for several decades. Texas-on-Thames, in short”.

We can but dream…

38

Steve LaBonne 12.13.11 at 7:40 pm

Walt, opposing the treaty in any way possible, however little effectual, is still the right thing to do, and anyway in the admittedly unlikely event that it can be killed by the death of 1000 cuts, every cut will have played its part. Nobody has made a credible case that he could have exerted any influence to improve it (it’s unimprovable anyway since it’s founded on crazy ideas) so nothing was lost. And I’m always deeply unimpressed by arguments about things like how stuff looks or how one likes to think of oneself.

39

Marshall 12.13.11 at 7:46 pm

This whole episode does add more fuel to the “what the hell is wrong with Clegg?” fire. He’s happy to be a doormat for austerity, university fees, etc, yet he’s putting his foot down on this? My diagnosis is that the last year and a half have gutted the Lib-Dem understanding of how reality works, and they simply have nothing to say and no idea what to do.

40

Substance McGravitas 12.13.11 at 7:51 pm

And I’m always deeply unimpressed by arguments about things like how stuff looks or how one likes to think of oneself.

Apparently people took Italy seriously when for years they had some vulgar and embarrassing nitwit heading the government.

41

Chris Bertram 12.13.11 at 7:52 pm

_yet he’s putting his foot down on this? _

But he didn’t. He started by saying it was all hunky dory, then he jumped up and down a bit, then he stayed away from the House during the debate. Hardly assertive.

42

Chris Bertram 12.13.11 at 7:55 pm

Steve, though you and I think the treaty is the wrong thing for the EZ, as far as Cameron is concerned the treaty he vetoed is the right thing for them!

43

enzo rossi 12.13.11 at 8:12 pm

‘Making social democracy illegal’ seems a bit too strong to me. As I understand it, member states are still free to set their own tax/spend ratio. The Eurocrats only have veto power on the bottom line of the national balance sheets. Which isn’t crazy: effectively if (say) Italy issues Euro-denominated bonds Germany becomes indirectly liable, so they should have some oversight on the process. And I maintain that the unspeakable counterpart to this deal was that the ECB will do lots of QE and act as lender of last resort if it comes to it.

44

Tim Worstall 12.13.11 at 8:24 pm

Having actually met Cameron I too think he’s ghastly (many years ago but it has saved time since then). However, this isn’t in fact true:

“David Cameron’s use of the veto in the recent EU summit”

He didn’t use the veto because there is no veto at such meetings. There is a veto at Intergovernmental Councils (IGCs) but not at European Council meetings.

Yeah, yeah, I know boring pedantry, but this is how the EU works, through boring pedantry. Cameron didn’t veto anything as there is no veto available at the type of meeting he was at. Check out his Commons speech on the subject if you like: he does not say that he vetoed anything.

45

Davis X. Machina 12.13.11 at 8:27 pm

…England (shorn of the Celtic fringes) as a second Switzerland, with Swiss levels of prosperity and generalised small-c conservatism as a function of a combined withdrawal from Europe and devolution.
Jesus. Have they never been to Preston? What’s the Swiss equivalent of Bradford?

46

politicalfootball 12.13.11 at 8:34 pm

Steve, though you and I think the treaty is the wrong thing for the EZ, as far as Cameron is concerned the treaty he vetoed is the right thing for them!

Hence Mandos/Paddy saying, “Right choice, wrong reasons.”

47

StevenAttewell 12.13.11 at 8:45 pm

Enzo – in so far as social democracy in its post-Keynes, Stockholm school, WTB plan goes, it does tend to include the idea that the government ought to intervene to prevent economic pain in recessions and promote full employment. A hard cap of .5% GDP rather puts the kibosh on that, and will mandate further swingeing cuts to the welfare state in the name of austerity.

I haven’t seen any signs of the ECB getting real about becoming the lender of last resort, either.

Interesting question is what happens to this deal if/when Hollande wins and a Red/Green or Red/Green/Red government wins in Germany in 2013.

48

MPAVictoria 12.13.11 at 8:45 pm

This Yes. Minister quote seems appropriate:

” Sir Humphrey: Minister, Britain has had the same foreign policy objective for at least the last five hundred years: to create a disunited Europe. In that cause we have fought with the Dutch against the Spanish, with the Germans against the French, with the French and Italians against the Germans, and with the French against the Germans and Italians. Divide and rule, you see. Why should we change now, when it’s worked so well?”

49

Marc Mulholland 12.13.11 at 8:51 pm

Not signing up was inadvertently good, whilst Cameron’s diplomacy skills were incredibly bad (he could easily have signed-up to the neo-liberal straitjacket – how could the Tory right object? – whilst winning nominal bones to throw to his backbenchers, had he not been completely out of his depth). I think Cameron’s sheer diplomatic ham-fistedness will fairly soon outweigh Eurosceptic delight. If for nothing else, the ‘permanent state’ will hold him in contempt, and we should not underestimate their ability to influence the press. No-one wants to see their national leader laughed at as an incompetent the world over, and indeed within his own government.

50

MPAVictoria 12.13.11 at 9:06 pm

Can anyone explain to me what the hell was the point of the Euro to begin with? I mean it was a great convenience for me when I backpacked across Europe after my undergrad to not have to change money in each country but I am assuming that making things convenient for MPAVictoria was not the goal of the Eurozone. So why did all of these countries give up control of their currency to join in? And why don’t they just leave now that the Germans have shown that they basically want to take over Europe from the inside?

If I lived in one of the countries whose governments are considering signing on to this tyranny I would be freaking out. Why should some unelected, incompetent and unaccountable bureaucrat be able to tell a duly elected government how they can run their country? I also find it kind of amusing that many of the comments here are still being a little condescending towards the eurosceptics when it appears to me that they have been at least partially right all along.

51

Jawbone 12.13.11 at 9:10 pm

#43–could you expand on that? Doesn’t the general principle that treaty-amendments require unanimity “infiltrate” the European Council? In other words, what legal status does a non-unanimous European Council decision have?

52

Richard 12.13.11 at 9:11 pm

“(I could be wrong about this, if the treaty in some way made it possible to enforce balanced budgets on non-eurozone countries, but I’m pretty sure that this isn’t so.)”

I was under the impression it required signatories to pass a balanced budget amendment into national law i.e. including non-eurozone countries.

53

John Quiggin 12.13.11 at 9:14 pm

I think this is a much bigger deal than refusing to sign a particular agreement. The outcome (unless it is derailed) is that the EU is 26+1, with the inside 26 being bound by a treaty among themselves, which in turn makes it highly unlikely that the UK will be able to organize effective blocking minorities under QMV. Either the UK won’t get the numbers, or the EU procedures will be circumvented by resort to the structures of the inner 26.

Of course, none of this matters if the euro collapses, which is what will happen if the treaty is the end of the process and the ECB continues as before. But unlike lots of commentators I don’t see this happening (for what its worth Der Spiegel imputes the same view to Merkel and her circle). And if the ECB switches to quantitative easing, the eurozone will be in essentially the same position as the UK and US, chronically stagnant thanks to austerity, but in no real danger of collapse.

Finally, since signing up or not didn’t matter to the outcome, the idea that Cameron was right for the wrong reasons makes no sense. He is correctly seen as trying to hold an agreement on fiscal policy, which he supported, hostage to demands for favorable treatment for the City.

54

Jawbone 12.13.11 at 9:14 pm

#49–withdrawing from the Euro would produce utter chaos–for example, if Greece introduced the drachma, nearly all Greek firms would become insolvent, because they would owe in euros but be earning (mostly) in devalued drachmas. Also, bank accounts would have to be frozen to prevent a run, etc. Of course, two years or so of chaos may be preferable to what appears to be endless austerity with little prospect of growth.

55

bert 12.13.11 at 9:20 pm

Veto-related activity?
Worstall@44, you’re being a boring pedant.
Miliband, cribbing directly from Bagehot, was more useful: “It’s not a veto when the action you tried to stop goes ahead without you. That’s called losing.”

Prim lectures from Jonathan Powell on Newsnight (and also here) about how not to get screwed at a European summit are a bit rich, though.

56

chris 12.13.11 at 9:23 pm

Whether Cameron vetoed or not made no difference at all to whether the shitty treaty went ahead, so in itself that makes no difference to what he should have done. All he’s managed to do is to isolate the UK, which, ceteris paribus, is a bad thing.

Isn’t it a bit like the question “if your friends all jumped off a bridge, would you jump too?” Nobody disputes the value of friendship, but…

I mean it was a great convenience for me when I backpacked across Europe after my undergrad to not have to change money in each country but I am assuming that making things convenient for MPAVictoria was not the goal of the Eurozone.

Well, in a weird way, I think it was; not aimed at you specifically, but the idea that it would make things convenient for a large class of consumers and tourists, which you happened to be temporarily a part of, *was* one of the selling points, IIRC.

57

mds 12.13.11 at 9:26 pm

I was under the impression it required signatories to pass a balanced budget amendment into national law i.e. including non-eurozone countries.

Indeed, I seem to recall that, e.g., Denmark has provisionally accepted the conditions, while Sweden indicated that it would have to take things back to their parliament. I hope Sweden’s answer is code for “We’ve already seen how not being on the euro enabled us to mitigate the downturn, so you can forget about lacing us into a different nail-filled straitjacket.” Then again, I hoped Denmark’s new government might have learned something from their victory over the previous government, which maintained a euro-pegging approach despite the consequences.

58

Enda H 12.13.11 at 9:53 pm

Social democracy is thereby effectively rendered illegal in the Eurozone in both its “social” and “democracy” aspects.

Ah, here, that’s nonsense that belongs on Fox News for its level of rhetoric. Starve the Beast bollox in reverse. Yes, the treaty is stupid and the budget controls too sever but, if nothing else, why would the Swedes and Danes like it if it killed social democracy? Please don’t predicate arguments for social democracy on a requirement for a budget deficit. Social democracy is much more politically and economically sustainable in a budget balance sense.

No, because the UK is outside the euro, it makes no difference either way.

(I could be wrong about this, if the treaty in some way made it possible to enforce balanced budgets on non-eurozone countries, but I’m pretty sure that this isn’t so.)

The UK is part of the Stability and Growth Pact. Not quite balanced budgets, but no more than 3% of GDP deficits and no more than 60% of GDP debt levels. (Look how that one worked out.)

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Enda H 12.13.11 at 9:54 pm

Whoops, I messed up the block-quote there. The parenthetical comment at the start of my last paragraph should be in the quote.

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Mattias 12.13.11 at 10:01 pm

Still waiting for an answer to Otto’s question (#28). It seems unlikely that Sweden will join the treaty.

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MPAVictoria 12.13.11 at 10:03 pm

“Social democracy is much more politically and economically sustainable in a budget balance sense.”

In the long term Enda. In the short term it is supposed to run deficits to stimulate demand if conditions warrant.

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Substance McGravitas 12.13.11 at 10:07 pm

“The really smart people couldn’t have gotten it wrong” seems weak at this point.

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Chris Bertram 12.13.11 at 10:08 pm

#60 My reason for believing it was just that something of the kind was asserted in Saturday’s Financial Times. Happy to find out that it is untrue (if it is).

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Daniel 12.13.11 at 10:12 pm

with the inside 26 being bound by a treaty among themselves, which in turn makes it highly unlikely that the UK will be able to organize effective blocking minorities under QMV

I still don’t see this. As I say – does this treaty mean that Germany is an olive oil producer now? On all issues except fiscal policy (and even on fiscal policy, because the treaty doesn’t actually abolish the business cycle variance), the “inside 26” have exactly the same difference of interest on EU matters that they did before, some of which they share with the UK and some of which they don’t.

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Chris Bertram 12.13.11 at 10:22 pm

Daniel

_the “inside 26” have exactly the same difference of interest on EU matters that they did before, some of which they share with the UK and some of which they don’t._

That might be true. But alliances don’t form just as a function of the coincidence of objective interests but but also on the basis of a calculation of the future value of being linked up with this or that partner. To the extent that other countries think the chances of the UK being out of the club have increased, the less they’ll think it worth investing in maintaining that relationship. (And the less other parties will be worried about alienating the UK also: something about conditional co-operation and backwards induction springs to mind.)

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Enda H 12.13.11 at 10:44 pm

In the long term Enda. In the short term it is supposed to run deficits to stimulate demand if conditions warrant.

Less so. Reasonable demand management is justified/excusable by a chunk of apolitical modern macroeconomics, not just social democracy. I think social democracy is much, much more about how a society spends its resources in general (govt composing 36% or 45% of GDP) rather than reasonably marginal alterations (0.5% deficit or 3% deficit) over the business cycle.

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JulesLt 12.14.11 at 12:10 am

I’m really intrigued about the Scottish question, and how Wales will react if Scotland goes independent/Euro (Wales being more ambiguous to independence, but nonetheless largely on the Left of England). Will England become a Switzerland-like state, surrounded by European/Euro nations?

(And to what degree will the rest of the EU tolerate it? Historically, they’ve been very willing to tolerate Switzerland, as it serves a useful purpose to the elite, but recently that’s been changing).

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Soru 12.14.11 at 12:28 am

I can’t see a country that would presumably have to have an ‘and’ in its name lasting that long. Though I suppose Trinidad and Tobago has been going a fair while now.

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enzo rossi 12.14.11 at 12:54 am

From Draghi’s recent speech: “…to increase collateral availability by allowing national central banks (NCBs), as a temporary solution, to accept as collateral additional performing credit claims (i.e. bank loans) that satisfy specific eligibility criteria”

That means QE to me. And QE means last resort lending if it comes to it. Merkel also recently said that the BCE should act autonomously etc. So basically the Germans are giving in on inflationary risks in exchange of austerity. Not a terrible deal in the circumstances.

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faustusnotes (used to be sg) 12.14.11 at 1:50 am

How can it be called a “veto” if the treaty goes ahead without Cameron’s agreement?

I’m mystified as to how this makes Cameron look ham-fisted. The UK is not part of the Euro and has always adopted a slightly-outside-the-union kind of policy, and the treaty is a disaster, so Cameron’s You-won’t-believe-it’s-not-a-veto “veto” is surely just consistent with that. I mean, if you refuse to give up your currency to faceless bureaucrats in Brussels, why on earth would you give up any controls over fiscal policy? He’s acted in a manner consistent with tory policy, rational economics, the desires of the voters, his own party’s domestic political goals, and the history of British policy on Europe. Sure, he’s pissed off a bunch of people in the EU – but they’re not looking like the strongest and most effective organization in the world right now.

Simultaneously, Cameron pleases his euroskeptic backbench, pulls a few votes away from UKIP – which, no matter how bad the Tories currently are, is a Very Good Thing for Britain – and further weakens Clegg, which from his point of view is excellent[1]. With Labour still confused and running under the Iron Rule of the Head Prefect, the Liberal Democrats on the slow, tumbling flightpath to the dustbin of electoral history, and UKIP increasingly being outflanked by Tory nutters, this action seems like an electoral goldmine.

fn1: also, isn’t Chris Bertram’s stated policy w.r.t Clegg that he’ll support almost any level of odious nonsense from the Tories if it pisses off Clegg? ;)

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MPAVictoria 12.14.11 at 1:55 am

“Less so.”

What does less so mean?

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faustusnotes (used to be sg) 12.14.11 at 1:59 am

Soru: so has “The United Kingdom of Great Britain and Northern Ireland.”

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StevenAttewell 12.14.11 at 3:33 am

enzo – maybe, but it might also mean the weak QE we’ve seen so far. It certainly doesn’t mean Eurobonds or higher inflation or LRL to nations instead of banks.

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Enda H 12.14.11 at 4:26 am

“What does ‘Less so’ mean?”

That (imho) you’re not incorrect, but missing the point. You said “In the short term [social democracy] is supposed to run deficits to stimulate demand if conditions warrant.” That’s true, but it’s only a small part of social democracy.

The way I see it, the general level of state intervention/social safety nets provided are an order of magnitude more important to social democracy than the provision of fiscal stimulus. Restricting deficits to (an admittedly foolishly small) percentage of GDP is a restriction on a small part of social democracy. There’s nothing (afaik) in the treaty about the level of government expenditure – you can still have it as 80% of GDP if you want.

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Norwegian Guy 12.14.11 at 5:27 am

“I’m really intrigued about the Scottish question, and how Wales will react if Scotland goes independent/Euro”

I have never understood why Scottish nationalists would want their country to adopt the Euro.

Many Scots, especially the SNP, want to cultivate stronger ties to Scandinavian countries. But neither Norway, Denmark or Sweden – or for that matter Iceland – use the Euro. For Scotland to do so, at this point in time, would make even less economic sense than when Finland did a decade ago. It wouldn’t even make sense politically, with the Eurozone in crisis.

The ability to devaluate, and to borrow in their own currency, makes a strong case for the hypothetically independent Scotland to establish its own, independent (unpegged) currency.

Additionally, newly independent states usually switch to their own, new currencies. It’s a powerful national symbol of a sovereign state, after all.

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Martin Bento 12.14.11 at 5:36 am

Enda, the rest of social democracy will have a hard time surviving the absence of that part, as we’re seeing right now. Without countercyclical policy, recessions lead to decreased revenue, hence decreased spending, hence further downturn, in a vicious spiral that cuts government expenditure with each cycle around. At the end, you have no social democracy, and have to try to rebuild from scratch with each recovery, a hard slog. This is why the conservative governments support austerity despite the apparent economic irrationality of doing so, in my opinion. They are playing a longer game and for ideological goals.

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Enda H 12.14.11 at 6:18 am

Martin – I disagree. I do not think that any cross-country analysis over at least, say, 25 years has concluded that recessions lead to permanent decreases in government expenditure; nor do I think that a couple of percentage points increase in government expenditure is anything like the key difference between avoiding a vicious spiral and a quick road to recovery.

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Chris Bertram 12.14.11 at 8:12 am

faustusnotes:

_if you refuse to give up your currency to faceless bureaucrats in Brussels, why on earth would you give up any controls over fiscal policy?_

Since there was never any proposal that the UK give up controls over fiscal policy, your comment is moot.

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FromGreece 12.14.11 at 8:43 am

” I do not think that any cross-country analysis over at least, say, 25 years has concluded that recessions lead to permanent decreases in government expenditure; ”

Recessions coupled with the need for balanced budgets do. Not many countries that had social democratic policies in the first place had those shackles on in the past though. Some have them now, and the results are not supporting your position.

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faustusnotes (used to be sg) 12.14.11 at 8:49 am

It’s hardly moot, Chris – that part of the comment was a request for information. How is a treaty that puts additional demands for balanced budgets on individual governments not equal to “give up controls over fiscal policy”? These aren’t rhetorical questions, btw. I want to understand why Cameron is being an incompetent opportunist (in this case).

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Chris Bertram 12.14.11 at 8:55 am

Because that provision applies to EZ members, and the UK is not. Ergo, no such requirement on Cameron’s government.

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Zamfir 12.14.11 at 9:18 am

That means QE to me. And QE means last resort lending if it comes to it. Merkel also recently said that the BCE should act autonomously etc. So basically the Germans are giving in on inflationary risks in exchange of austerity. Not a terrible deal in the circumstances.
But it’s highyl peculiar kind of expansion, where the ECB can prop up banks but not governments. We keep the situation where banks are kept afloat at all costs, but people in the streets are left to drown. The first might perhaps be the right thing to do under the circumstances, but the second comes awfully close to making social security-cutting the only officially allowed policy of the eurozone. I sure would have liked a vote on that.

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Jeffrey Davis 12.14.11 at 2:59 pm

So, basically the question is will late 19th century economics and xenophobia produce a different result in the early 21st century than it did in the early 20th century?

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Enda H 12.14.11 at 6:56 pm

Recessions coupled with the need for balanced budgets do.

Not permanent. Temporary. And rightly so: if you think that government expenditure should rise when GDP does, you should think government expenditure should fall when GDP falls. The (exaggerated) social democratic decision then comes down to whether you cut military expenditure or unemployment benefits.

Backing up my assertion that the declines are temporary: Here’s America’s GDP per capita over time – http://www.acus.org/files/u3/USA-GDP-1810-2010.png – dips are noticeable, but the trend is very clear. GDP rising.

Here’s America’s government expenditure over GDP – http://tinyurl.com/6q3rpur. Post-1945, it’s hovered around 15-25%. If the denominator (GDP) has been rising, the numerator has been rising similarly. Government expenditure has been rising and rising.

Here’s America’s federal debt level over GDP: http://upload.wikimedia.org/wikipedia/commons/thumb/d/d5/US_Federal_Debt.png/350px-US_Federal_Debt.png. Excluding the war, it’s remained comfortably under 50%. They’ve largely balanced their budget.

And this is America, the developed nation you would most expect to cut spending severely during a recession. There’s just no evidence that recessions cause permanent drops in government expenditure over GDP. And seeing as stimuli are very rarely more than 10% of expenditure, I consider this (quite literally) an order of magnitude of greater importance than stimulus.

Social democracy is about providing for the less well off, and the corresponding decision about how much you should tax the wealthy. This holds at all times. I’d be sad to see social democracy so strongly associated with running deficits.

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nick s 12.14.11 at 7:07 pm

Jesus. Have they never been to Preston? What’s the Swiss equivalent of Bradford?

The Little England of Kipper-style Little Englanders has a northern border running roughly from the Wash to the Bristol Channel.

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MPAVictoria 12.14.11 at 7:30 pm

“I’d be sad to see social democracy so strongly associated with running deficits.”

Enda I am still confused. No one is saying a social democracy has to ALWAYS run deficits. I am saying that a social democracy has to be permitted to run deficits during a recession/depression like event. How is a government supposed to maintain the same level of services without running a deficit if tax revenues are dropping due to a recession?

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Enda H 12.14.11 at 8:24 pm

MPAVictoria

How is a government supposed to maintain the same level of services without running a deficit if tax revenues are dropping due to a recession?

They’re not. When GDP is $1bn, the state can afford unemployment benefit of $x. When GDP is $2bn, the state can afford unemployment benefits of $y. If GDP falls back to $1bn, you move back to $x.

The question is whether $x should be near zero, or some decent living standard for unlucky people who have fallen on hard times. That’s the really substantive social democratic question — not wondering about how you can stay at $y just because you managed to get there once.

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Substance McGravitas 12.14.11 at 9:03 pm

They’re not. When GDP is $1bn, the state can afford unemployment benefit of $x. When GDP is $2bn, the state can afford unemployment benefits of $y. If GDP falls back to $1bn, you move back to $x.

Oh please.

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MPAVictoria 12.14.11 at 10:32 pm

“They’re not. When GDP is $1bn, the state can afford unemployment benefit of $x. When GDP is $2bn, the state can afford unemployment benefits of $y. If GDP falls back to $1bn, you move back to $x.”

I am sorry Edna but this doesn’t make a lot of sense.

90

gastro george 12.14.11 at 11:28 pm

No, it makes no sense.

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strawman 12.14.11 at 11:29 pm

General Election on nationalist themes, getting a majority dominated by swivel-eyed propertarian xenophobes and dismantling the welfare state, the Health Service, the BBC (CBC) etc. Riots and civil disorder would be met with force, and those driven to resistance or crime would be incarcerated in giant new prisons. The Scots (Quebeckers) would then, understandably, opt for independence, and England and Wales (rest of Canada) would be left at the mercy of the crazies for several decades. Texas-on-Thames (Ottawa), in short.

Make a few appropriate substitutions and sounds like what’s happening in Canada

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Martin Bento 12.15.11 at 1:49 am

Edna wrote:

“Here’s America’s federal debt level over GDP: http://upload.wikimedia.org/wikipedia/commons/thumb/d/d5/US_Federal_Debt.png/350px-US_Federal_Debt.png. Excluding the war, it’s remained comfortably under 50%. They’ve largely balanced their budget.”

That’s not what the chart means. In the 66 years since WW2, America has run deficits every year but 6. For each decade of deficit, there has been 1 year of surplus. What your chart shows is that the yearly percentage increase in debt has on average approximated the percentage increase in GDP (actually, I don’t think it really shows this either, as the ratio at the end of the chart is more than twice what it was at the beginning, but that seems to be your claim), Since, the increase in GDP was typically positive, so was the increase in debt, which means deficits were being run. Under a balanced budget requirement, absolute debt would always decrease as old debts were paid off without new debts accruing. If any growth were possible under this scenario, debt/GDP would decrease even faster – the numerator would be decreasing while the denominator increased. The chart shows instead that debt/GDP has doubled (from less than 20 to over 40) with a lot of fluctuation over the course of the chart. Some argue, including Quiggan if I follow him correctly, that a stable debt/GDP ratio – which implies deficits on average whenever there is growth on average – is what really matters and what we should mean by fiscal responsibility. But that is not what “balancing the budget” as a legal obligation means in any context I’ve encountered. What Europe has been asking for but not enforcing was something in between: deficits constrained to an percentage of government spending (not GDP). If we are now talking about American Republican style balanced budgets, that’s even worse. Neither of these are what America has historically done.

As for the historic impact of recession, between now and the Great Depression, the worst recession in the US was that of the late 70’s-early 80s (a double dip), which has indeed led to a so-far permanent change in the distribution of wealth, largely through changes in the tax code to make it less redistributive, and also through weakening of the welfare state and the labor movement. See Reaganism.

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Martin Bento 12.15.11 at 1:50 am

Excuse me, Enda, not Edna.

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Martin Bento 12.15.11 at 1:59 am

I said:

“What your chart shows is that the yearly percentage increase in debt has on average approximated the percentage increase in GDP”

Let me make something more explicit, since the chart is not literally showing the delta. If the cumulative debt/total GDP ratio is constant, then percentage fluctuations in debt must equal percentage fluctuations in GDP.

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sg 12.15.11 at 10:58 am

Chris B:

Because that provision applies to EZ members, and the UK is not. Ergo, no such requirement on Cameron’s government.

So, Cameron used his not-really-a-veto to oppose something that didn’t ever apply to the UK, which was (in your words) “a disaster,” and the remainder of the EZ members can work around his not-really-a-veto anyway.

So how can this open “an era of deep uncertainty (and possible catastrophe) for British and European politics”? Because Cameron disagreed meaninglessly with something that didn’t apply to the country he governs? How does this make him “an incompetent opportunist in thrall to his backbenchers”?

There seems to be something wrong with the narrative here. Either this treaty change was going to have meaningful effects on the UK such that it was better for the UK to be in on the treaty negotations than out; or it was irrelevant to the UK so Cameron wasn’t standing up for UK sovereignty, and was just doing a bit of opportunistic posturing. I can’t see how it can be a bastard child of both.

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Chris Bertram 12.15.11 at 12:29 pm

“or it was irrelevant to the UK so Cameron wasn’t standing up for UK sovereignty, and was just doing a bit of opportunistic posturing.”

Yes this. Except the “just” is misleading, because (though dsquared disagrees) it will damage the UK’s relations with other European countries. Though the UK was unaffected either way, Cameron made it harder for those other countries to do what they wanted (have an EU rather than an intergovernmental treaty). Expect payback, and when the payback comes, expect further retaliatory demands for the ‘bulldog spirit’ from Tory loons.

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Daniel 12.15.11 at 12:39 pm

I don’t necessarily disagree with that – I bet it will damage some relationships and there will be retaliation – I just don’t think that the retaliation will have all that much in the way of long term consequences (and given that our European policies generally are such a mess, it’s quite likely that we will end up “failing to get our way” on an issue where we are absurdly in the wrong).

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faustusnotes (used to be sg) 12.15.11 at 1:27 pm

okay… but isn’t this what people do all the time in political negotiations? I can hardly imagine someone like Merkel or Sarkozy concluding that this was an example of Cameron genuinely trying to mangle the EU. They’ll just think “oh, he had nothing to lose and everything to gain” and know where he stands next time.

Or are you judging Cameron’s opportunism from the fact that this treaty would superficially appeal to his austerity ideals? Because I don’t think he’s that shallow.

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Adrian Kelleher 12.15.11 at 10:09 pm

David Cameron and Tony Blair each exhibited his greatest determination in tackling “outdated” elements of his own party. The difference between the two is that while Blair shelved his party’s core objectives to focus on peripheral issues, Cameron shelved the peripheral issues to focus on the core objectives: shrinking the state and maintaining a lock on political progress in the EU. However cack-handed the execution, his performance at the summit was a natural progression.

Cameron’s strategy is wrong for Britain for a number of reasons. The EU must centralise labour, environmental, financial and other forms of regulation either democratically or administratively or else a race to the bottom in standards will occur. The UK is sufficient on its own to prevent democratisation of any EU administration, though such an administration looks far fetched at the present time in any case. The alternative — approximately the current plan of the EU minus Britain — is so undemocratic as to undermine itself. The only remaining option is the regression of the EU to a trade block with all members free to engage in standards competition.

The latter configuration is known to bias all politics rightwards among trade zone members; the result will be gradual but inexorable movements to the right as each country is left at the mercy of the markets and the democratic will is frustrated.

It’s already apparent that this process has advanced to a stage beyond which it becomes dangerous. Lower paid workers are disadvantaged as their jobs are more mobile while higher paid workers become harder to tax as they and their skills are themselves mobile. A strict ceiling on wealth subject to effective taxation is introduced because neither WTO financial services signatories nor EU members have the legal power to circumscribe capital mobility.

The results of these effects are all around us: deficits cannot be closed by increased taxation because the wealthy — who benefited disproportionately from the globalisation boom — are beyond the effective reach of any democratic authority. Their resources enjoy the support of permanent administrations at the IMF, World Bank, WTO etc. that not only are not democratic but actually lack political dimensions of any sort. Political decisions of whatever sort become impossible.

Cameron is thus in a position to engineer a conservative bias not only into British politics but that of the entire EU if not actually the world. But the permanent administration is more vulnerable than it looks. In the end of the day the nation states of the world enjoy not just popular legitimacy but also the use of copious quantities of weaponry. There is thus a huge and growing imbalance between the sources of effective governance — meaning the IMF etc, the international institutions that can actually make things happen — and the sources of ultimate power in the world which remain the nation states.

In this context, any tactical victories for conservatism become dangerous illusions. The emerging global system is inherently unstable. These are the sort of victory that ultimately brings the house down around everybody’s heads.

Ironically, the August riots revealed that the UK may itself be among the countries most vulnerable to these pressures. There is a huge difference between 30 years and 60 years of Reaganism. Denmark, Holland, Australia etc. and the other countries that have swerved rightwards in recent decades have had less time for the downsides of Reaganism to become apparent. The UK and US, on the other hand, already have the highest level of inequality in the developed world and both are top or close to the top of any measure of social problem you care to mention: drug addiction, teen pregnancy, gun violence etc.

Many on the left would welcome the implosion of the WTO. I would certainly endorse at least a redesign to bring democratic politics to the fore once again. However the current trajectory places the international order in great danger. The WTO, IMF etc have no centralised administration or ability to respond to altered circumstances. What the dominant powers have created is not a super state but a rag bag of elements that could collapse in short order.

Protectionism, xenophobic populism and economic dislocation on a massive scale would then be unleashed. Nobody would be in a position to control developments at that point: we’d all be passengers.

This general trajectory has been in evidence for more than a decade now. There are more continuities than discontinuities between the pre- and post-Lehmans worlds. The results have been very satisfactory for conservatives, but the point has long since passed beyond which further successes involve risks much greater than the rewards.

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Daragh McDowell 12.16.11 at 8:51 pm

Sorry Chris haven’t checked in on CT for the last little while. Clegg isn’t the foreign minister. Lib Dems don’t really have much influence in this area of coalition policy, and the overwhelming opposition of the UK press oligarchy to the European project makes making it a ‘red-line’ that would force the collapse of the coalition strikes me as unimaginably electorally stupid and futile. Frankly I think your ‘Texas on Thames’ fantasy is, well, just that. Other than that I’m back home in Ireland now and my, perhaps self-interested, position is that the further driving of the UK out of Europe can for the time being only be a positive development. I think the undoubted democratic deficit in the EU can only be solved by enhancing political integration alongside economic. The UK has become an unthinking, reactive impediment to all such movement in this direction. Its impossible to have a rational discussion about the EU in the UK mass culture, such is the hysterical indoctrination by the tabloid press of the populace. So overall, I’d love to see it leave.

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Antoni Jaume 12.17.11 at 7:27 pm

As I surmise, from the news I’ve read, that Cameron wanted an exemption for the financial activities of the City, whose interests are at the root of the present crisis, there was no way the rest would agree with his propositions.

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piglet 12.18.11 at 2:19 pm

“England (shorn of the Celtic fringes) as a second Switzerland, with Swiss levels of prosperity and generalised small-c conservatism as a function of a combined withdrawal from Europe and devolution.”

Really? Devolution as a conservative policy, with huge regional and municipal autonomy, popular votes on everything? That seems far-fetched to me.

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