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Brussels (and Durban)

The EU summit is mostly over. A seven-page statement by the leaders of the countries using the euro outlines the solution: there will be a new treaty involving all the EU member states except the UK and Hungary, with the Poles and Czechs going away to think about it. Participating states will enshrine a commitment to balance their budgets at "constitutional or equivalent" level. This will certainly mean a referendum on Ireland, which could be simply on balanced budgets but much more likely on the deal as a whole. This will all take some time (though the conclusions optimistically speak of signing the new treaty "in March or at an earlier date"). In the short term more money is to be made available to the existing and planned bailout mechanisms. It's pretty much what Chancellor Merkkel and President Sarkozy were looking for; we will see in the course of the day if the markets are convinced (though the form is that immediate reaction to these things tends to be positive before buyer's remorse sets in).

It's a lousy outcome for the British, who are now locked outside the doors of the next stage of European integration. It's not quite equivalent to 1955, when the UK walking out of the Messina conference which set up the EU thus ensuring that the structures would be set up without Britain. But Anton La Guardia had a point when he said on Twitter that "at least Cameron cannot be accused of being Chamberlain. He has no piece of paper to bring home".

On 18 November Cameron met with Merkel in Berlin, and set out his price for signing up to a new treaty: i) Britain should be allowed to revert to its opt-out from the social chapter (as the previous Conservative government did), ii) unanimity should be brought back for decisions concerning financial services, and iii) any new system should include an "emergency brake" which non Euro Area member states could apply if and when they felt that decisions by the Euro Area threatened the integrity of the EU as such. There was never any chance of getting Germany (or indeed most other EU member states) to agree to these: the first two walked back previous British commitments, and the third potentially allowed states outside the euro to control the behaviour of states using the euro. So the other states went ahead without Cameron, joined in sulking outside by Orbán with Nečas and Tusk making up their minds.

I do wonder if Cameron deliberately set an unrealistic negotiating position in the certain knowledge that he would therefore return home with no treaty to sign, and thus avoid the embarrassment of either debating whether or not to have a referendum on the new treaty (or indeed holding the referendum and losing it). British journalists will no doubt concentrate on regurgitating the spin both from Cameron and the eurosceptics, but they are all marginal to the real process now. It is not so much a two-speed Europe as a one-speed Europe with stragglers, Britain being the largest of the later category.

Meanwhile, almost ten thousand kilometres away, the EU, the Alliance of Small Island States, and the Least Developed Countries are pushing in Durban for a new climate deal to include continuation of the Kyoto Protocol, more money to deal with climate change, and an agreed mandate to negotiate very quickly a new legally-binding agreement on carbon emissions by all the big players. They have another day to negotiate. This is where the action really is, in a sense; the euro crisis is only about money, while the Durban talks are about saving the world.

Comments

( 11 comments — Leave a comment )
parrot_knight
Dec. 9th, 2011 07:11 am (UTC)
I woke up to the news from Brussels on the radio and my heart sank at the European news; the short version of Yesterday in Parliament then appeared on Today, with a Lords committee including lords Lawson and Forsyth grilling George Osborne, the two peers apparently believing that there was no point in the present Brussels summit as the Euro ws going to break up anyway - just like Osborne told them when he was a policy adviser in the 1990s. Never underestimate political will, I thought.
djm4
Dec. 9th, 2011 07:23 am (UTC)
Yes, at first sight, I'm going with Cameron deliberately giving them an offer they couldn't accept. Although it does have a bit of a 'if I wanted to get to Britain staying at the heart of the EU, I wouldn't start from here' feel about it.

Not a good morning to be a Lib Dem, I feel.
steepholm
Dec. 9th, 2011 07:38 am (UTC)
When you're all walking towards a precipice, straggler may be the optimal position. But we'll see. Interesting times, anyway!
webcowgirl
Dec. 9th, 2011 07:46 am (UTC)
Isn't a climate change agreement pointless without China and India buying in?
gareth_rees
Dec. 9th, 2011 10:48 am (UTC)
I don't think so—even if there are holdouts from an agreement, we can't export all our power generation to them, and we may be able to persuade them to buy in at a later date or to a later agreement.
andrewducker
Dec. 9th, 2011 10:52 am (UTC)
Agreed. If we all hold off until everyone is onboard then we don't change anything.

By being good citizens ourselves we're both proving that it's possible, and moving the debate forward (or shifting the Overton window).
pwilkinson
Dec. 9th, 2011 06:37 pm (UTC)
And I understand that the Hungarians have now gone away to think about it as well. And while the outcome for us English (in this context, "British" is probably a euphemism) may not be so bad as Messina in theory, I suspect that it's worse in practice - the EU has now been around more than 50 years and I would be rather surprised if, as happened then, the remaining 26 (plus future accessions) will be willing to allow England to play catch-up on relatively understanding terms in ten or twenty years' time.

In fact, I'll go further than that. Cameron has no piece of paper but, provided the EU can now stop the euro collapsing (which is far from certain, but far more likely than many people are currently supposing), he will also have no significant potential allies anywhere on the planet outside Britain - an even marginally coherent EU is a far bigger market than England (or Britain, if we can coerce Scotland into staying on board). Looking back through a millennium or so of history (something I've been meaning to do in my own LJ for several weeks now, but not yet had time for), that's been a very rare situation for England to be in. And splendid isolation, I suspect, only works with an empire in tow (and even then, judging by history, only for hanging on until new allies appear, not for victory).
sashajwolf
Dec. 9th, 2011 08:02 pm (UTC)
I do wonder if Cameron deliberately set an unrealistic negotiating position in the certain knowledge that he would therefore return home with no treaty to sign, and thus avoid the embarrassment of either debating whether or not to have a referendum on the new treaty (or indeed holding the referendum and losing it).

Exactly this, I think - and it also reduces the risk of further cracks in the Coalition. There can't have been much appetite for another referendum on which there are such differing views within the two parties, given how badly the AV referendum played out. Meanwhile, the Eurozone gets to go ahead with the next step towards fiscal union by a quicker route than amending the existing treaties - I can't believe they seriously wanted to do something that could have given British voters a veto - and the UK gets the benefits of a more stable region without having to submit to the same budgetary controls. The idea of a structurally balanced budget is one I basically approve of, but retaining the freedom to set our own rules domestically while benefiting from the more coercive system imposed on the weaker Eurozone states strikes me as not a bad bargain at all. The argument that we're losing influence in the EU doesn't really concern me too much - our institutional influence is dribbling away with every move to majority voting anyway, and while we've undoubtedly lost some political goodwill, if we ever elect a genuinely pro-EU government, that should be entirely reversible.

(I agree with you about Durban - the reason I'm focusing on the Eurozone in this comment is that I've had to follow those developments for work, whereas my interest in Durban is a personal one that I haven't really had time to pursue.)
nwhyte
Dec. 10th, 2011 07:52 am (UTC)
I wonder. It suggests a degree of clever calculation from Cameron that I find a bit improbable. The normally reliable Economist has an inside account of Thursday night's negotiations which makes interesting reading.

I feel sorry for Nick Clegg, who said "The demands Britain made for safeguards, on which the coalition government was united, were modest and reasonable. They were safeguards for the single market, not just the UK. There were no demands of repatriation of powers from the EU to Britain and no demands for a unilateral carve-out of UK financial services". The point about the unilateral carve-out for the UK is just about barely true, but the rest is false, and he must know that.
sashajwolf
Dec. 10th, 2011 01:20 pm (UTC)
I'm not sure I get what they're on about with Protocol 12. Protocol 12 TEU/TFEU is the Excessive Deficit Procedure, which contains no mechanism of the kind described. Possibly they mean Article 126(14) TFEU, which could be used to amend Protocol 12, but by virtue of the European Union Act 2011, Cameron can't vote in favour of such an amendment without Parliamentary approval. I don't think anyone's interests would have been served by delaying matters for him to try to get Parliament to vote in favour of anything involving the EU in the current UK political climate, least of all the interests of the weaker Eurozone countries.

I think the truthfulness or otherwise of that comment by Nick Clegg depends very much on (a) what timeframe the comment about repatriation of powers is intended to refer to and (b) what view one takes of subjective terms like "modest" and "reasonable" in political statements (i.e. whether one assumes that they have some literal meaning, or whether they are just fluff, like the things that estate agents say about houses. Of course I'd rather live in a world in which neither my party leaders nor my estate agents felt the need to generate fluff, but I fear that day is a long way off.
s g
Dec. 10th, 2011 01:12 am (UTC)
I guess this must come down to referendums - if not, the project isn't worth pursuing.

Ireland will probably go along. The big one is Germany - they have to decide whether parliament may sanction permanent transfers of taxpayer money, which is a domestic issue their constitutional court has insisted on. Anyone know the logistics of this vote combined with ratification of a new treaty?

The UK is in a real bind because of its bloated banking & insurance industries. No idea how that should be managed (apart from unacceptable liquidation).

Overall, things are finely balanced. Draghi is sticking with Maastricht restrictions on sovereign bond purchases, which surprises me because it makes bank nationalisations next year in France and Germany inevitable.

Once that happens the UK has to bear the burden of reckless insurance written in the Square Mile (see AIG, MF Global) - the only thing they can do is more QE, which must lead to a sterling crisis.

Who knows?
( 11 comments — Leave a comment )

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