Bruce Anderson: The EU battle isn't over for Cameron
Although a short-term crisis has been averted, a longer term crisis is inevitable
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Independent Minds
David Cameron had no choice. On Lisbon, the Government behaved contemptibly. It lied and broke its word. Even without Lisbon, Gordon Brown would have gone down in history as the man who ran a government which was weak, bossy, dithering and dishonest. We must now add despicable. This is a Prime Minister without a single redeeming feature. He deserves to be derided out of office and to spend the rest of his life skulking in obloquy and ignominy.
But that is not the Europeans' fault. They cannot be blamed for taking advantage of Mr Brown's breach of faith. If Mr Cameron had tried to re-open Lisbon, he would have been pushing against a firmly-locked door. If he had persevered, there would have been a crisis in our relations with the EU, whose outcome no-one could foresee. These are not the ideal economic circumstances for such a crisis.
In the aftermath of deceit and betrayal, many angry Tories were not in the mood for calculation. They wanted to hit back, whatever the consequences. Yet the red haze of rage is not the right light for complex decisions. In resisting anger's temptations, David Cameron was not being weak. He was being Fabian, in the proper sense of the word, following the example of Quintus Fabius Cunctator. Generals have to know when to give battle, when to order a tactical retreat. There has been such a retreat. The forces of euro-scepticism have suffered a temporary reverse, but not a terminal defeat. Although a short-term crisis has been averted because of Mr Cameron's caution, a longer-term crisis is inevitable, and it will not only be a matter of Britain versus the rest. The EU itself is unstable.
This is Helmut Kohl's fault. When he bulldozed the European single currency into being,he knew that he was creating an unstable structure and did so deliberately. It was a combination of the fox with no tail and Marxism. If the Germans had to make do with war guilt, why should other Europeans be able to enjoy nationhood?
In his desire to persuade all the other foxes to cut off their tails, the German Chancellor assumed that the economics would determine the politics. In the early Nineties, he often said emphatically – he was good at emphasis – that monetary union could not succeed without political union. How else could the same monetary policy operate from Cadiz to Copenhagen, from Dublin to Dusseldorf?
The USA could run a common monetary policy despite wide regional divergences. But Uncle Sam devotes at least twenty per cent of GDP to fiscal transfers. That would not be possible without political union. So Chancellor Kohl saw the euro as the way to create a USE. But that is not going to happen. Though there will certainly be political interference, as the euro-nomenklatura uses its increased powers, the sort of political union which could create a stable fiscal basis for monetary union is a fantasy.
From 2012 onwards, there will be an almighty row over the EU's budget. Forget US levels: it currently stands at 1.24 per cent of the EU's GDP. The poorer nations would support an increase. That is nothing to do with political union. They would just like more cash. They are unlikely to get it, for none of the net contributors are in a giving mood, even in Germany. War-guilt has lost is mesmeric effect on the German wallet.
The French might be persuadable, but only if all the extra money went straight to French farmers. Most other countries now acknowledge that the CAP, long since renamed the corrupt agricultural policy, is a scandal and an anachronism, which also works against the interests of Third World producers.
Heated arguments are inevitable, and unless British diplomacy is extraordinarily inept, we should not often find ourselves in a minority of one. It will be more a case of bellum omnium contra omnes, and there is a further dimension to the conflict. Poor countries have usually deployed two methods of self-improvement: a cheap currency and cheap labour. In that way, they attract foreign investment and foreign markets. But the EU is likely to prevent its poorer members from adopting those policies. The French and the Germans have handicapped themselves with high labour costs and inflexible labour markets. They want to impose the same burdens on the rest of the EU. If the rest of the EU has any sense, it will resist.
The belief that one size can fit all is the fundamental Euro-fallacy. The Germans are so good at manufacturing that they can just about generate the productivity and the value-added to finance their labour costs. Other countries cannot do this. If Central and Eastern Europe were obliged to follow the Franco-German model, they would have escaped from Comecon into the Procrustean embrace of Eurocon. Their peoples' hopes and ambitions would be blighted.
In nascent democracies, that could be unhealthy – and not only in the former Soviet bloc. Neither France nor Spain has a securely-rooted democracy. In both countries, the levels of youth unemployment are frighteningly high, which is already leading to social unrest and increased crime.
That leads us to another basic problem. Many of the EU's social and economic generals are out of touch with reality because they are still fighting the last war – or rather, afraid of the last war. Germans of Helmut Kohl's generation were not just tail-less foxes. Many of them had an idealist's vision of a united Europe, freed forever from the threat of war. Yet the anxiety which fuelled the idealism was unnecessary. France and Germany would never again have fought one another over Alsace-Lorraine; 1945 saw to that. The new danger does not come from conflict between nations, but from conflict within nations, as an alienated underclass grows in size: in many cases, an alienated Muslim underclass.
The European single currency was a typical Enlightenment project: an attempt to sweep away traditions and particularisms in order to reshape society and lead mankind onwards and upwards to a better future. It was espoused by intellectuals, who are always adept at suppressing data which does not harmonise with their theories: always quick to disregard the cautious caveats of commonsense.
In an EU which is not moving towards political union, the euro is a federalist anomaly. As such, it will fail. But in the interim, it could do a lot of damage. That will come to be a far greater preoccupation for British policy-makers than the Lisbon Treaty. We can only be grateful that this wretched government did not manage to lie and cheat us out of the Pound.
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Comments
Just pray that it does not end up like Jugoslavia.
As it is inevitable that we will be in a Federal European state(still a minnow in the scale of things),we may as well be in the tent,p***ing out,to paraphrase Nixon.
Learn to grab,like the Europeans do.
In the end it might have to come to a simple in or out referendum.
The underlying idea behind Lisbon is the creation of the U. S.E.
the old American problem of states rights is bound to raise its head
why have a nation without a single language and with a single currency which a major player will never accept?
what are the chances of several countries giving up their sovereignty for Franco-German hegemony?
what price a confederacy of anti-EU states? - and a money war- and with whom would the USA side?
the whole basic idea is flawed IMHO
The UK may have few cards left, but they are goodies, I hope, but I'm probably wrong, as usua
what would happen if we seceded from the EU?- would the sky fall in?l
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A) I agree the ultimate goal is federalist and they sooner they admit to that, the better. It would give people something tangible to either embrace or reject.
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B) Europe is not a nation and I doubt they will ever want to label it in that way. The nation-state is a concept in decline.
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C) A common language is not a pre-requisite for a nation. Look at Switzerland, Spain, China, Belgium and even the USA.
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D) The UK might be a major player but England is not. If you pull out of the EU, Scotland will pull out of the UK and join the EU.
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E) The UK might never accept the Euro but there is no future for the pound. Again, it might become the currency of England and Northen Ireland in a relativelly short time.
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F) Franco-German hegemony is far from being a reality and far from being the EU's objective for the 21st century.
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G) There are not enough anti-european countries to make a confederacy whose aim is to be anti-something. Maybe you can put together a confederacy of about 10 million Daily Mail and Sun readers.
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Finally, I would say that the anti-EU stance is equivalent to gagging ourselves. The EU would already be far more democratic if the UK was a full member and if people were being more active about addressing the democratic deficit, rather than posting their complaints here and feeling like they've done their duty. My criticism is this: DO SOMETHING.
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http://www.europeanpp.wordpress.com
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It's for pro-EU people and anti-EU people... unless you're willing to deny the very existence of the EU
I don't want to be a citizen of the USE but it should have less added on the name; i rather like the sound of a nation called Useless; but I don't want to be part of it ; I'm an Englishman and not wildly fond of foreigners-I don't hate them, I'm just not fond of them; I don't hate anybody, on principle
my guess is it would be chaos-all chiefs and no Indians
The same remarks could apply to the US or China, if "one size fits all" doesn't work then it can't work in any mega-state. Come to think of it, this is a good argument for the break up of the Union, perhaps America would have been better off if the Southern states had separated from the North. Scotland might be better off on it's own and Wales. However I think that the Isle of Man maintaining it's own defence force is going a bit to far, even if they are worried about invasion from mainland metrosexuals.
Wales about 3.5 million. NI 2 million, Scotland 5.5 million, all the rest of the 61 million live in the area called England. As a Londoner, it is obvious that the South East is the most productive area in the UK at this time and as has been said by many London based politicians, a very high proportion of what is created there in terms of taxes, are "exported" to other regions in the UK which is the right policy.
The question is and Bruce Anderson makes the point quite well here, "The USA could run a common monetary policy despite wide regional divergences. But Uncle Sam devotes at least twenty per cent of GDP to fiscal transfers."
And later on, "From 2012 onwards, there will be an almighty row over the EU's budget. Forget US levels: it currently stands at 1.24 per cent of the EU's GDP."
This in a nutshell is the key issue which if you put the "problem" for the larger EU contributors in your personal terms it is like saying: "Today you pay 2,000 Euros in tax, tomorrow this must increase this by a factor of 16, therefore next year you will pay 32,000 Euros - OK ?" (based upon a 20 per cent transfer).
In order to finance EU expansion, Blair surrendered the "Maggie Rebate" so shortly, the UK will be paying around 7.8 billion (Sterling) pa, do you imagine that we could afford to pay in x16 that ? An eye watering 125 billion pa.
The point is that there is nothing wrong with having a single currency providing that either you have a totalitarian regime so no one argues or, you can generate sufficient transferable funds to ensure those who pay most, don't feel robbed and those to whom it is transferred, feel that it is equitable in the general scheme of things.
Whether this is a good or a bad thing can be debated from many different angles but what is a fact is that the impact of any policy on a large economy, say Germany will be totally different from the impact on say the Irish Republic. This of course is little different within the UK itself and Sterling, what suits the City of London will not suit the Yorkshire Dales or the Scottish Highlands however and just as Mr Anderson points out with regard to the USA, in the UK there are substantial transfers of funds to the various regions to balance things out.
You must understand that these transfers are significant and far larger than any "EU Rebates or Grants" and even EU Contributions from the major EU economies are chicken feed in comparison. Therefore and looking ahead and the main thrust of this article with regard to the Euro, is not whether it succeeds or fails, it is whether the Eurozone will move to making equivalent cash transfers from the larger economies to compensate the smaller ones, is there even the political will to do so ?
As for your assertion, "...I still blame the dying embers of empire for all this..." is a foolish and ill informed statement. The people who "missed the idea of Empire" were of Harold McMillan's generation, people who like him had fought in WWI, that generation passed long since and the one that followed which fought in WWII were more interested in living a better life afterwards than how many "pink spots" were on a Globe or World Map.
I was born in 1945, now coming up to 64, my youth was the 1960s and whilst I like history, living in the past would be stupid and I can't think of anybody in my generation that hankered for the days of "Empire". We were all pretty keen on a better world and the Common Market seemed like a good idea at the time, unfortunately it has turned into an undemocratic, authoritarian monster that both Stalin and Hitler would be proud of and that is not good news for Europe, it will end in tears sooner or later. No I don't wish it to but today we celebrate the Fall of the Berlin Wall...think about it, you cannot ignore the people forever, unless the EU changes rapidly, there will be tears before bedtime.
What I want is that the Britain returns to its roots, an island trading nation, trading globally with an adventuresome outlook, we really do not need the EU in order to survive, wish it no harm, nor the Euro, it is just that neither has much to offer the UK. I guess you will have to fall back on "Little Englander" for your insult to anyone like me who objects to the EU.
And what is wrong with the Enlightenment? Want some nice fundamentalism? Spot of the jolly old Inquisition, KKK running Conservative central office?
Someone go and get his medicine, he's ranting again.
Absolutely - but look at his other posts, in praise of legalising drugs, more money for Bankers. I live near one of the poorest areas in England, if Ole Brucie had his way my town would descend from drunken decay into an inferno of deprivation, crime and arson, there'd be riots on the streets. Oh yeah I forgot, wasn't it a Tory that proposed abandoning the North and building over the South. Not all regulation is bad, the alternatives are often far worse.
Am I expected to take that seriously? Thought the Indy did serious journalism, not the political equivalent of "Frddie Starr ate my hamster" ...
Watch this space!
Yet.
It's coming. A financial crisis of epic proportions, calculated to hit once the Tories begin to deal with the results of Brown's scorched earth economic policies; hyperinflation and economic disintegration; Sterling in free-fall; an EU funded rescue with strings attached; UK entry into the Euro at parity; the EU painted as Britain's saviour and only hope of future economic security; sovereignty and over a millennium of history extinguished. Mandelson leading an invigorated Opposition with re-election firmly in sight.
Welcome to the EUSSR.