Ed Balls: British jobs depend on the Greek rescue plan's success

A vital European summit. The stability of the global economy at stake. British jobs and wider economic interests hang in the balance. And neither the British Prime Minister nor the Chancellor was at the meeting. Nor do they seem to have made any effort to be there.

Their absence was a betrayal not only of the British national interest, but a betrayal too of the legacy of their predecessors – both Labour and Conservative.

It was our Treasury that led the way on global financial reform after the Asian crisis and the Russian default. Britain was at the centre of world efforts to stabilise the global oil price after the Iraq war. And when the big test came it was Britain that led the way – both through policy and persuasion – to ensure the collapse of Lehman Brothers did not drive the world into depression.

But Ken Clarke, Norman Lamont, John Major and Nigel Lawson can equally claim to have played their full part on the global economic stage. Remember the huge influence that Nigel Lawson had on the Plaza and Louvre agreements to stabilise the dollar after 1985.

The Osborne Treasury feebly counters that Britain is not a member of the euro, so of course David Cameron was not invited. But it was already clear that Britain would not join the first wave of the euro when Ken Clarke banged the table to get the EU Stability Pact agreed at the 1996 Dublin summit. With Britain outside the euro, it was Gordon Brown who consistently made the case for reform of the Stability and Growth Pact. And Alistair Darling was at the centre of Europe's response to the global banking crisis.

So what is really going on? One explanation is that David Cameron and George Osborne have been distracted by the hacking scandal and the fight to save their reputations. But their absence from the European economic debate has been clear for months, not weeks. And just as they have no growth plan in Britain, nor have they pushed for one in Europe.

Another is that George Osborne was happy last autumn to sit back and see the euro collapse into crisis as a vindication of his rapid deficit reduction plan. Sadly, since then, the UK recovery has stalled. The last thing our Chancellor needs is a euro crisis to drag down further Britain's stalling economy.

It was the Prime Minister's remarks to the 1922 committee of Tory backbenchers last week that gave the game away. This is the reported Cameron plan: stand back, wait for a new EU treaty to deepen euro area fiscal ties and use that chance to renegotiate the terms of British membership.

This is a disaster waiting to happen. British jobs and investments depend on our full membership of the single market. Already British business is worried that the UK is not punching its weight on vital reforms. And we should be prioritising getting a better EU budget settlement than last month's ill-judged and out-of-touch proposals.

No wonder Nick Clegg is worried about the direction of government policy on Europe. We all should be. If Thursday's Greek rescue plan does not work – and my worry is that it could turn out to be another sticking plaster – thousands of British jobs could be at risk.

But if David Cameron and George Osborne use this crisis to undermine Britain's EU membership, the economic and wider consequences will be much graver.

Ed Balls is the Shadow Chancellor