Leading article: A stable eurozone is in Britain's national interest, too

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The Independent Online

In relations with the European Union, the Prime Minister has regrettably succumbed to the same temptation as his recent predecessors at No 10.

He has learnt to present every outing to Brussels as a ferocious battle to be fought, and every agreement reached there as a triumph for Britain against the rest. The last EU summit of 2010 was no exception.

Mr Cameron jumped the gun on revealing an agreement, with France and Germany, to freeze the EU budget until 2020. He also said that Britain would be exempt from contributing to a permanent eurozone rescue fund to start in 2013. At the previous summit, Mr Cameron had stressed the weight of support for a future freeze, even as he quietly signed up to a 2.9 per cent increase for 2011. At least, it might be said in mitigation, Mr Cameron has to placate a Eurosceptic party base.

That does not make his approach any nobler or, indeed, more honest. As this Government knows as well as Gordon Brown's before it, any new crisis in the eurozone cannot but affect Britain, for all that this country has shunned the common currency. During the Irish crisis, the pretence was upheld, to an extent, that Britain and the eurozone countries were separate, and the bailout was structured in such a way as to reflect that. The deceit was made easier by the particularly close British-Irish ties.

The distinction will probably be more difficult to maintain in future. It is not just that Britain is already committed to supporting any joint EU action in the agreement that lasts until 2013 – a commitment for which Mr Cameron cheerfully (and correctly) blames Gordon Brown. It is that British companies and British banks, many of them now essentially in public ownership, are as exposed as any to the vicissitudes of the eurozone. Indeed, so entwined are our economies and financial systems that it is unrealistic to expect that Britain will be able to remain aloof even after 2013.

Nor should it do so. A stable eurozone, as even the Chancellor, George Osborne, recently admitted, is in Britain's interest. So Mr Cameron can claim as often as he likes that he has obtained a "clear and unanimous agreement" from other EU members that Britain would not be "dragged into bailing out the eurozone" as part of a new, permanent, rescue fund from 2013. But the operative words here may be "dragged into". If – which we hope will not be the case – any new bailouts are needed from 2013, Britain may well have no choice but to sign up, and may even do so with alacrity for the sake of our own economic health.

Not that the establishment of this fund can necessarily be taken for granted. Although all 27 EU leaders have supported it and agreed a two-sentence addition to the Lisbon treaty (as stipulated by Germany), this revision must still be adopted by all governments individually – some of which may require a referendum. And any new referendum, anywhere in the EU, spells trouble – including potentially for Mr Cameron, despite his insistence that the proposed fund would make no claims on Britain. A permanent stability fund for the eurozone is a much-needed measure. But it is as unrealistic to claim that it is in the bag as it is for Mr Cameron to return home declaring another British "victory".