David Cameron’s a hostage to his party and the right-wing press. Thank goodness for Nick Clegg

The shockwaves from David Cameron’s decision to reject the proposed ‘Merkozy’ EU treaty is still shaking politics. The UK stands isolated from the other 26 member states. Tory Eurosceptics and, early polls suggest, a majority of the British public think the Prime Minister has played a blinder, ‘sticking up for Britain’.

This is difficult territory for the Lib Dems. Our October survey of party members suggested a more Eurosceptical attitude than traditionally associated with the party, with 51% rejecting a move towards ever closer union.

However, there is nothing more guaranteed to put up liberals’ backs than the full-throated, triumphalist roar of jingoistic isolationism that has gushed forth from the Tories’ more headbanging MPs and their newspaper cronies.

I am an internationalist rather than a Europhile: the EU is flawed, often protectionist, frequently anti-democratic. But I believe the UK should be reforming from within. The Tories would rather walk away.

David Cameron’s plight

I have some sympathy for Cameron. Such is the myopia of the current anti-Europe-at-all-costs Tory party he had little room for manouevre; any form of treaty would have provoked a huge row. Just as John Major was before him, so is David Cameron a hostage to his party. And I think the case he was making, albeit from a UK-centric position — that the proposed treaty would have left national governments with too little power to determine their own economic futures — was the right one.

Where I lose sympathy is that Cameron has clearly had little interest in building alliances within Europe, to lead through influence rather than brinkmanship. This all started from his foolishly populist decision to withdraw the Tories from the centre-right European People’s Party grouping: it set him on a collision course with those, such as Germany’s Angela Merkel, who should be his natural allies.

He has done little since to try and correct this course, driving a bigger wedge between the UK and the rest of Europe. Cameron and his backward-looking, flag-waving party believe the UK is big enough and strong enough to go it alone. They are deluded. In an ever-more inter-connected globalised world, trade, negotiation and cooperation are crucial to all countries’ futures.

What Nick can do next

The case against Nick Clegg is this: he was sidelined by David Cameron in the negotiations until woken at 4am last Friday to be informed the Tory prime minister had used his veto; he initially welcomed the decision; and then flip-flopped when he realised how unpopular such a view is among the party’s leading lights, and denounced the Prime Minister.

It’s not a case that stands up to scrutiny. Nick Clegg has been actively using his extensive European connections to try and win the best deal for the UK, as the Observer’s Andrew Rawnsley notes here:

[Nick Clegg] had done his best to help. In the weeks running up to the summit, Nick Clegg had worked very hard behind the scenes to try to find a navigable passage between the pressure on the prime minister from the Tory party and the agenda of European leaders. According to allies, the Lib Dem leader “talked down” the prime minister from making impossibilist demands at the summit. At the same time, Mr Clegg tried to impress on European leaders the difficulties Mr Cameron had with managing his party. The deputy prime minister talked to a number of important liberal and centre-right politicians in the EU and made an unpublicised trip to Madrid to try to butter up the new Spanish prime minister.

Despite Nick’s best efforts, Cameron’s isolation has left the UK out in the cold, an outcome the Lib Dem leader yesterday said left him “bitterly disappointed” (which the media have cheerfully misreported as if Nick were delivering his opinion of the PM’s performance).

For all the right-wing press talks Nick up as an unpatriotic Euro-federalist, the truth is he’s very much a Euro-realist, often sceptical of the EU’s institutions (as his contribution to The Orange Book made clear). And never before has the UK needed a leader who can inject some realism into this debate to ensure that our country isn’t dragged further to the rightward margins of relevance by a combination of frothing newspapers and cheerleading Tory MPs.

Let’s remember what this was all supposed to be about

The summit last week was not about the UK’s membership of the European Union: it was about solving a financial crisis which threatens all our economies. If the Eurozone sinks there will be many Tories cheering; yet the reality for people’s livelihoods in the UK and beyond will be dire. As Mark Pack pointed out here on LibDemVoice yesterday:

If the summit’s fiscal deal works and saves the Euro, that will continue the trend towards Britain being the outsider, but avoiding economic meltdown on the continent will be good news for our own economy. If the deal fails, then Cameron’s unwillingness to back it will look better, but the cost to the British economy will be great.

The summit appears to be yet another attempt to paper over the financial cracks in the Eurozone’s economy. It’s as unlikely to work as its predecessors’ efforts were. I am not therefore going to shed any tears that the UK refused to sign-up to it. But it’s a crying shame that the UK isn’t trying to lead from within, that it won’t sit down with our trading partners and neighbours and calmly and maturely try and get a better deal — for the sake of the UK as well as the Eurozone.

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42 Comments

  • Cllr John Kiely 12th Dec '11 - 8:25am

    My problem with Nick’s position is that he appears to misread the political situation often, tuition fees, the AV vote and now this. Surely any sensible leader would have thought through all the possible outcomes from Cameron’s appearance at this conference, bearing in mind the anti-European feeling amongst a large number of Tory backbenchers. Instead we are told he was awoken to this surprising outcome and has ‘flip-flopped’ making the party look weak. Another foreseeable car crash, which has damaged the party.

  • “Bizarely many of the Lib Dems complaining about Cameron’s veto are the same people who oppose the Coalition’s deficit reduction policy – a rather milder version of what the 26 have signed up to.”

    You mean the 16.

  • Kevin Colwill 12th Dec '11 - 8:53am

    We mere mortals can’t know the timeline of who said what and when. Maybe Nick Clegg was true to his European principles and in here busting a gut for the UK to stay “at the heart of Europe”. Maybe the euro sceptic Tories stitched him up and his voice was largely ignored.
    There are, however, a few things you can’t have both ways;- Either he was an integral part of the policy making team or he wasn’t, either he was consulted at important moments or he wasn’t, either he approved of the “veto” or he didn’t.
    By appeared to welcome the (lack of a) deal one day and deride it the next he makes himself look first unprincipled then sidelined…some achievement.

  • If I were an EU leader I would now be hoping that the UK would now leave completely, so that the 26 could then use the EU infrastructure to enforce monetary union as they think fit.

    It would not take much for the EU to wind the rabid press and tories up so much that exit would be unstoppable.
    ( and wreck the coalition)
    Total disaster for us.

  • So Nick Clegg has now got publicly very upset with the Tories twice – once over the voting system and once over Europe. Both issues where the public either don’t care (voting system) or agree with the tories (Europe).

    Would it not have been a better idea to have been publicly outraged over Tuition Fees or the NHS or anything that the public actually agree with us on

  • “Cameron and his backward-looking, flag-waving party believe the UK is big enough and strong enough to go it alone. They are deluded. In an ever-more inter-connected globalised world, trade, negotiation and cooperation are crucial to all countries’ futures.”

    I would suggest it is this desire by Europhiles for Britain to remain a major world power that is backward-looking. Plenty of us Eurosceptics are more than happy for Britain to come to terms with the fact that it no longer runs a quarter of the world and instead would be better off as what Lord Oakshott called a “super Switzerland”. After all, it is not as if Switzerland is a bad country to live in.

  • If the measures to save the eurozone fail, the posturings of the UK will be a sideshow against the economic debacle across Europe (including the UK). So how can you, Stephen, say “The summit appears to be yet another attempt to paper over the financial cracks in the Eurozone’s economy. It’s as unlikely to work as its predecessors’ efforts were. I am not therefore going to shed any tears that the UK refused to sign-up to it.”

    What is your formula to save the eurozone or do you really think we can safely let it go down the tubes? If so how?

    In my view Cameron’s actions should have been directed first and foremost to give maximum traction to the moves to provide disciplines within the eurozone which will hopefully enable the ECB to act in the way we all want and allow even Germany to move away from its understandable reluctance to permit this. George Osborne in particular was calling for exactly these measures so let’s not now try to say Cameron’s “veto” was anything to do with opposing the eurozone measures as such.

    Here is how I see it. The regulation of the financial sector was nothing to do with this treaty discussion. This issue is being separately negotiated with any move towards a Tobin tax decided by unanimity and other measures subject to qualified majority voting (what chance would you give now for British views to prevail there!). Therefore it is not a question of the reasonableness or otherwise of Cameron’s demands it is the time and place of their being raised. Knowing that there was value in the British vote – allowing the world to see unanimity in agreeing measures to apply to the eurozone countries and deflecting arguments about whether or not EU institutions and facilities could properly be used for discussions and actions specific to the eurozone – Cameron tried to put a price on his vote. Supported unfortunately by Nick Clegg et al (seems like only Vince Cable warned against this in cabinet) he decided the least he could get away with against the background of his braying backbenchers was to try to pre-empt the separate negotiations on some aspects of financial services.

    As Sharon Bowles has pointed out this gamble spectacularly failed because Merkozy decided they had had enough of placating the burgeoning Bill Cash tendency in theTory party. The result would have been bad for the UK even if a sizeable number of the other non-eurozone countries had followed Cameron’s lead. To be left virtually isolated is a potential disaster for the UK.

    Let’s hope Nick Clegg can salvage something from the rubble – I’m not holding my breath.

  • @Ian Ridley:

    Or the NHS. Or the welfare reforms. Funny how the only two things the LibDems have seriously fought against were the AV referendum and the EU: issues which affect them as a party but the public either don’t care or disagree with them about.

    When it comes to defending actual people and what they voted for, well, LibDems go silent quite often.

  • I don’t think this is a Thatcherite government. Thatcher was fairly pragmatic about the EU and would never have stomped off leaving Britain with no representation at all. The higher rate of Tax under Mrs T was also 60%. What the Tories under Cameron represent is years in the wildernes, arguing among themselves, an aging membership, leaked support to UKIP, a bit of inverse Class War and a faith in a monetry system that effectively died in 2008. As much as I dislike Thatcher’s legacy and it’s influence on Blair, she was really not anything like a Cameron Conservative.
    The real problem for the Lib Dem,s is that they are in a government with a bunch of pointy-headed rightwing idealists.

  • Very good analysis. Agree 100%.

    Perhaps the one thing I would add is that, while the UK negotiating position (i.e. what we were seeking) may have been agreed with Nick and others, it is disappointing that there appears to have been no agreed approach in the event of a complete stonewall. Did no-one (on the Lib Dem side at least) foresee the complete rebuff we got?

  • @Jedi
    I wonder why you don’t quote the paragraph before which makes it clear these “new rules” only apply to the Eurozone and have nothing to do with us.
    “Both the Van Rompuy report and France and Germany want economic policies in the euro zone to be more alike.
    Both mention using the existing legal possibility of “enhanced cooperation” between those EU member states who want to (there have to be at least nine), to achieve that.”

    There has been a lot of misinformation pumped out by the Euroseptics over the last few days. Presumably to cover up Cameron’s colossal strategic blunder. Going to a negotiation and coming back with nothing is not success.

  • Tony Dawson 12th Dec '11 - 6:56pm

    “David Cameron’s a hostage to his party”

    Is having a party Leader who takes some notice of his Party’s views such a terrible thing?

  • Kevin Colwill 12th Dec '11 - 7:17pm

    The longer the coalition goes on the more I see the Lib Dems as split into three factions; one indistinguishable from the Tories, one unprincipled opportunist and one as effective as the proverbial chocolate teapot. Nick Clegg must be a hell of a leader because he seems to dodge between all three. All rather sad for a lifelong Lib Dem voter like me.

  • Jedibeeftrix writes: “Seeing as I consider the 50% to be damned illiberal…”

    Why is a 50% rate of tax illiberal? What level of tax do you consider suitably liberal?

    At a time when many people on low incomes are having a tough time in the interests of reducing the deficit, it seems only fair that those who are well-off should do their bit. We’re all in this together.

  • David Pollard 12th Dec '11 - 10:05pm

    If you want to know just how strong Nick Clegg’s position is just watch Bloomberg News for a couple of days. According to ‘the markets’ if the Coalition collapses now, Britain would be attacked in the same way as Greece and Italy have been.

  • David did the right thing!

    There was and is no need for a treaty involving the 27 members to introduce further fiscal regulation on the 17 Euro-zone members!

    This raises the question of why did ‘Merkozy’ choose the treaty approach rather than some other vehicle…

    I also question why there was any real need to conduct negotiations under pressure by continuing them into the small hours, particularly if an intent was to ensure EU harmony.

    So the UK now stands ‘isolated’, but then as any one who has first hand experienced leadership will tell you, loneliness and isolation are part and parcel of the job. No the UK isn’t isolated, just that no one as yet is publicly supporting us, but then do you expect high stake poker players to congratulate you for foiling their game play?

  • @ AndrewR

    The link Jedi gave seems to differ slightly from the proposals submitted by France ( http://www.reuters.com/article/2011/12/07/us-eurozone-france-letter-idUSTRE7B612Y20111207) – the French proposal isn’t so cut and dried, for instance:

    “Commitment of national Parliaments to take into account recommendations adopted at the European level on the conduct of economic and budgetary policies”

    It also talks about this as building on clause 136 which was originally intended as a Euro only clause (I believe?), there would be some mission creep if things became European as opposed to Euro.

    Also, Cameron met with Merkel and Sarkozy at 7:30 PM on Thursday, he made it clear that the UK financial area should not be subect to EU supervision and they made it clear that this would be unacceptable (see http://www.spiegel.de/international/europe/0,1518,803097,00.html – I’m fairly sure Der Spiegel isn’t some Tory rag).

    So if Cameron had agreed to those conditions then it seems likely that the UK Finace Sector could come under EU supervision (or Merkel and Sarkozy thought it would), which would trigger a referendum in the UK as it is:

    a. Introducing new competences/extending existing competences.

    b. Conferring on an EU institution or body of new or extended power to impose sanctions on the United Kingdom (there would obviously be possibities of sanctions for non compliance of any new regs).

    Also, of course, it would break the coalition agreement.

    No doubt that it is the sort of things that lawyers could make a fortune on, but I don’t think Cameron was left with any doubt that the City was in the EU sights.

    @Liberal Eye
    I agree about the Eurosceptic/phile comment, I also don’t think comments like “Such is the myopia of the current anti-Europe-at-all-costs Tory party” are not really helpful either, it could easily be turned to “Such is the myopia of the current Pro-Europe-at-all-costs Lib Dem party”

    @Stephen Tall
    “he was sidelined by David Cameron in the negotiations until woken at 4am last Friday to be informed the Tory prime minister had used his veto”

    I tend to agree that this part doesn’t hold up – if Cameron met Sarkozy/Merkel on Thursday night and was told that he wouldn’t get what he needed, then I can’t imagine for one moment that he didn’t let Clegg know what the most likely outcome was (before he went to bed – assuming Clegg wasn’t tucked up by 9:30PM).

    @Denis
    “What is your formula to save the eurozone or do you really think we can safely let it go down the tubes?”

    Surely the first part of your question is easy, allow the ECB to act as guarantor/lender of last resort and use Euro Bonds. Unfortunately this has been consistently blocked by Merkel, it would seem that her coalition partners (the liberal Free Democratic Party) won’t let her get away with that one. I can’t say I blame them, in the event of a default the new agreement would mean private institutions (e.g. banks) would not lose out, which would mean that the EU would have to stump up the cash (in other words the tax payers of Europe would pay) – as the biggest economy in the EU it seems likely that Germany would have to pay the major part of that (and probably need to act as guarantor of Euro Bonds).

  • @AndrewR
    Let’s get your point absolutely clear, Andrew – the letter from Merkozy “threatening” a change in approach on financial services, used shamelessly by Cameron in PM’s questions to justify his position, was entirely directed towards measures for eurozone countries. Here is the passage –

    “Both the Van Rompuy report and France and Germany want economic policies in the euro zone to be more alike.

    “Both mention using the existing legal possibility of “enhanced cooperation” between those EU member states who want to (there have to be at least nine), to achieve that.

    “The areas that could be in a “new common legal framework” according to Paris and Berlin are financial regulation, labor markets, harmonization of the corporate tax base, a financial transaction tax and better use of EU funds for growth policies.

    “Van Rompuy lists also labor markets and pragmatic tax coordination, and adds sustainability of pensions and social security systems”

    I repeat – there was no real threat to the UK position on financial services from this summit. Now there IS a threat – namely that the widespread frustration with UK behaviour throughout our EU partners will make it much more difficult for our negotiators on the financial services front to get their way on those areas which are subject to qualified majority voting.

    @Stephen Tall
    I agree that the ECB must be looked to for eurozone salvation – it’s in my earlier post. However an essential building block towards this was the strongest possible outcome from this summit of measures towards discipline in eurozone countries. The efforts of Cameron have made it fall short of the strongest possible outcome. Let’s hope and pray it is enough to fuel progress in the right direction for eventual eurozone salvation. Whether or not any of us wanted the euro in the first place we are now in such a position (weak as our own economy is) that eurozone disaster equals UK disaster.

  • Sorry – in my post a moment ago I headed a section @Stephen Tall. That should have been @chris_sh.
    By the way, Chris, your Spiegel article was not saying new supervision should be imposed on UK financial services – merely that the existing EU supervision should not be removed. This is fairly clear fron this quote –

    “Cameron demanded extensive exceptions for his country in the event that the European treaties would have to be amended. Most of all, however, he wanted the British financial sector not to be subject to European supervision. Merkel and Sarkozy quickly made it clear to Cameron that that would be unacceptable.”

  • Bill le Breton 13th Dec '11 - 1:04pm

    I have enormous sympathy for what Denis has been writing here.

    The Euromess is more about monetary policy than about fiscal policy.

    If you can spare a moment or two to look at this post http://macromarketmusings.blogspot.com/2011/12/evidence-for-monetary-view-of-eurozone.html and read Martin Wolf you will see that prior to the 2008/09, of the twelve largest eurozone economies, all except Greece fell below the famous 3% of GDP criterion.

    In 2008/09 NominalGDP fell off a cliff: falling Euro 175 billion in about three months.
    At that time the ECB did nothing and, by being passive, they were operating an extremely tight monetary policy preventing NGDP climbing back to its long term trend.

    The new trend line for Eurozone NGDP remained Euro 175 billion down and worsening (as fiscal tightening impacts).

    The ECB needs to announce Euro 100 of QE this month and next and the month after that until NGDP rises back onto that old trend line, by which point all the countries of the Eurozone except Greece will be back within the 3% limit.

    [Of course it would help if the ECB was accompanied by similar commitments from the BoE, the Fed and the BoJ.]

    Nor do I think we should take any comfort as Stephen suggests above from knowling that Cameron’s negotiations were cock up rather than conspiracy. Thatcher’s decision to send an invasion fleet to the Falkland’s was also not her primary intention. Her initial reaction was not to do so, but to continue with diplomacy. It was the Navy that persuaded her.

    As I said elsewhere – intended or otherwise, Cameron’s invasion fleet left yesterday and this will have a long term effect on Conservative policy and their performance in the polls. To stay with the maritime metaphor he has stolen UKIP’s wind and caught the xenophobic tide.

  • Matthew Huntbach 13th Dec '11 - 2:40pm

    The issue with the EU is that most people in this country have almost no idea what it does but have a tribal opposition to it, and therefore can be got to agree with almost any claim about bad things it does, no matter how nonsensical or far from the truth, made by those who have a vested interest in doing it down.

    So, very much like the Liberal Democrats really.

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