Mary Dejevsky: Brown should show pride in Europe and here's why

The eurozone banks have been far less affected by the US financial crisis than those in Britain
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The Independent Online

The Prime Minister was at it again yesterday: trying to pretend that the European Union does not exist or, should it have still the impertinence to cross his horizon, ensuring that it is on no account given the time of day.

Gordon Brown was reporting back to the Commons on his hide-and-seek trip to Lisbon, where he had just had time for a closed-door signing of the EU Reform Treaty also known as the Amending Treaty (Peter Mandelson), the Simplified Treaty (Nicolas Sarkozy), or the Lisbon Treaty (Jose Manuel Barroso), but absolutely not anything to do with a Constitution. He had flown off to Brussels, with evident relief, to discuss the even less fathomable intricacies of Kosovo. You could argue that hushing up the EU and belittling the significance of the latest treaty is Mr Brown's own way of expressing his Europhilia.

He doubtless recalls opinion polls showing that British views of the EU become warmer in inverse proportion to the amount of media coverage. His aim seems to be to keep the treaty flying as far as possible beneath the party political radar until every dot and comma has been voted through by a thoroughly disengaged House of Commons. With ratification in the bag, hey presto, the "Europe issue" referendum included hops over the aisle to torment the Conservatives.

Operation "Conceal and Bore" may be an understandable strategy in the Eurosceptic climate that Mr Brown seems to sense all around him but it has a regrettable downside. It is now compelling him to ignore two of the most persuasive arguments for enthusiastic British participation in the EU to have come along for many a year.

Last week, the Bali conference on climate change appeared to be on the brink of collapse. The decision was taken to go into an extra day. In the additional time, it was the consistency and determination of the European Union that won the day. The EU operated as a bloc. It teamed up with India to berate and cajole the United States. The result was a key concession from the US delegate, and an agreement that, while hardly epoch-making, was infinitely better than the failure that had loomed.

At the crunch point, the European Union showed itself to be capable of just the sort of multilateral diplomacy that its admirers elsewhere in the world have long advocated. For them, it provides a model of a democratically-organised regional bloc, and they would like to see it playing a much more active international role. It is not EU ambitions that concern them, but what they perceive as the EU's lack of ambition and its reluctance to make its potential influence felt beyond its borders.

The Bali agreement came only days after an event that was truly epoch-making: the joint decision of the US Federal Reserve, the European Central Bank and central banks from Britain, Canada and Switzerland to pump liquidity into the financial markets with a view to easing the credit squeeze. That such an arrangement was deemed necessary at all is the clearest proof so far of the scale of the threat that has radiated out from the US sub-prime mortgage meltdown.

But two particular aspects of this agreement are worth noting. Although the move was coordinated by the Fed, the Europeans, in the shape of the ECB, played a pivotal role. With their strong currency and not being as wedded to the free market as the Americans, they helped to facilitate an international market intervention without precedent.

It should also be pointed out that, with a couple of exceptions, the eurozone banks have been far less affected by the US financial crisis than, for instance, those in Britain which have developed more US-style lending. The same could be said of the eurozone economies. What the US and Britain are confronting is nothing less than a crisis of insufficiently regulated capitalism. The Anglo-Saxon model, as the French and Germans call it, has been exposed as having a price. When even the Bush administration's gung-ho free-marketeers intervene in the US mortgage market (as they did last week), this is an admission that something has gone disastrously wrong.

As President Sarkozy and Chancellor Merkel try to shift their reluctant populations a little further towards the free market, the weaknesses exposed by the US mortgage crisis should give them pause for thought. Old-fashioned banking, as still practised on the Continent, has its virtues. So does sensible regulation. The balance the eurozone has been trying to strike may prove more resilient (and humane) than the excesses of the Anglo-Saxon model.

Addressing MPs yesterday without hinting that he had ever been in Lisbon or signed a treaty Gordon Brown announced that he had invited M. Sarkozy and Ms Merkel to London to discuss the fallout from the international financial crisis. He cast this as a trilateral meeting, not as anything to do with the EU. That is one way of looking at it. Another would be to see it as the start of what could be a long rapprochement, as Mr Brown wakes up to these new arguments for being European.

m.dejevsky@independent.co.uk

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