It’s the Euro’s fate, not Britain’s fate, which is the key post-summit question

Sat on a shelf a few metres away from me is a box containing the various military medals won by my relatives over previous generations. The medals criss-cross Europe, coming from different countries, over the three wars that had a German-French conflict at their centre. To British eyes that count of three wars may seem odd at first, but for the German and French politicians building new European structures in the aftermath of the Second World War, their heritage was one of three wars – the Franco-German war of 1870 and then the two World Wars.

For them something drastic was needed to stop the dreadful arrival of conflict three generations in a row, each time on a bigger, longer and bloodier scale. Moreover, the wars were not started despite popular opinion, for they were all popular to start with.

That background helps explain two of the defining features of the European project – the determination of French and German politicians to stick together with each other and a sense that whilst democracy is good and welcome, and a vital antidote to the grotesque internal horrors of the early twentieth century dictatorships, the European project is about binding countries together rather than about giving people more democratic control over international affairs.

Add in another, far more recent, event – Brown winning out over Blair in keeping Britain out of the Euro (the closest Britain got to joining, for under Major that was never likely) – and Britain’s isolation after the last Euro summit is no sudden departure but rather a sudden, stark reminder of the quieter trends that have long been going on. The summit did not create those trends, however sharply it illustrated them.

Germany and France are, for reasons of history and economics, desperate both to stick together and to save the Euro. It was never essential to do more than try a bit to make nice to a country that is outside the Euro and whose largest political party has so often been hostile to so much European work. A country, moreover, whose leader chose to take his political party out of European alliance with mainstream continental parties and who had done precious little alliance building over the previous years with the key sources of power.

When France or Germany can wheel in Britain as an ally in their jostling with each other, Britain can exert some successful leverage, but fundamentally a different history and being out of the Euro has always made it the dispensable one of the trio.

More crafty negotiation by Cameron might have avoided the stark outcome of the summit, but the failure of his negotiating tactics did not cause the rifts. It simply shone a sharp light on the long standing political dynamic at the heart of Europe.

What the British government asked for at the European summit was not unpalatable to ardent pro-Europeans – Sarah Ludford MEP called it “reasonable” and Graham Watson MEP went one step further to call it “perfectly reasonable”.

But starting with that negotiating list, Cameron’s tactics at the summit did go off the rails, especially in turning down of the deal suggested by the President of the European Council only then to see the whole room turn against Cameron. Talking to people who saw Cameron’s support team after the talks broke down, they seemed genuinely shocked that they negotiating had turned out so badly and senior Liberal Democrats have been extremely critical of Cameron’s negotiating tactics at the summit. That the Lib Dem Deputy Head of Press has been retweeting today’s Independent story about Clegg’s fury over how Cameron conducted the talks is a pretty strong steer as to how accurate that story is. As one Lib Dem told The Observer:

He could not believe that Cameron hadn’t tried to play for more time. A menu of choices wasn’t deployed as a negotiating tool but instead was presented as a take it or leave it ultimatum. That is not how he [Clegg] would have played Britain’s hand.

But if you have allies who want talks to succeed with you as part of the outcome, when you dig yourself into such a hole people come to help pull you out. That is what would have happened if France or Germany had got into a hole. In Britain’s case, people did not come rushing to pull Britain out, instead they were happy to walk away from the hole.

As for the fallout, it is riddled with ironies. 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.

And that is what really matters and is really at stake at the moment: the Euro and the continent’s economy. The summit has not broken Britain’s position in Europe. Whether its steps are enough to save the continent’s economy from being broken is the big question. On that, the jury is very firmly still out.


Here’s the coverage from this morning’s BBC TV about Nick Clegg’s reaction to the summit and then an interview with myself. I do like the big picture of a glaring Cameron staring down at me part way through…!

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This entry was posted in Europe / International and Op-eds.


  • ROB SHEFFIELD 11th Dec '11 - 10:17am


    It was a bit like those old Batman TV shows: ‘BISH’ ‘BANG ‘POW’ ‘WALLOP’ etc etc

    Some *direct* quotes:

    “I want to make sure that Britain leads and is not isolated”

    “Manufacturers in my own constituency are anxious about what this all means”

    “Business groups are anxious about this and have said so already”

    “For one reason or another there wasn’t even any negotiation- just polarised positions”

    “This is damaging to Britain as a whole”

    “Britain is stronger better garret when we lead and stand tall in Europe”

    “PM was in a difficult position…facing intransigence from large parts of the Tory party”

    “Sceptics spectacularly misguided”

    “Nothing bulldog about Britain hovering on the sidelines of Europe”

    “We should be reengaging more fully in Europe and that is what we will be doing”

    “Immediate reaction this was it was bad for Britain”

    “No one can believe that this is good for Britain”

    “No case for a referendum”

    “Fight fight and fight again for British jobs and growth in Europe”

    “Make sure this setback does not become a permanent breach that damages jobs and growth in Britain”

    “Three million UK jobs dependent upon ESM”

    “Britain is at its strongest and best when it leads debates and is at the centre of Europe”

    “If I had been at the summit things would have been different/ I am not under the same constraints as David Cameron is from his party”

    “I will fight tooth and nail Britain leaving the EU”

    “Britain will be a pigmy in the world if it leaves the EU”


    He *hardly* rowed back at all.

    On EU the Lib Dem leadership are now closer to Labour than they are the Tory leadership- as articulately evidenced by Douglas Alexander earlier on Marr.

    The last person in the world I’d wish to be in the next 14 frenetic days is David Cameron.

    I actually feel sorry for him.

  • Keith Browning 11th Dec '11 - 11:07am

    Good to see Nick showing some leadership at last, and saying what he thinks instead of what he thinks Cameron wants him to say.

    Interesting to see reference to the 1870 Franco-Prussian war, which began exactly 70 years before WW2 and we are now 70 years on, so it was still fresh in the minds of WW1 politicians and still significant in the minds of the post WW2 politicians.

    Also we fail to remember that in the days leading up to the start of the 1914 conflict Britain was expected by everyone – including France, Germany and the USA to either remain neutral or to join in on the German side. We were only worried about those damn Irish Catholic nationalists !!!

    After all at the time our Royal family was 110% German and our native population of Angles and Saxons was German through and through.

    Our enemy of 1000 years was the French, and as ‘Yes Prime Minister’, so ably reminded us, the foreign office still regards the French as the ‘enemy’. Perhaps they are correct.

    So none of this has anything to do with economics and everything to do with the politics of Europe, now grinding up against the global ambitions of the USA, who wouldn’t want their air bases in East Anglia supervised from Brussels, Paris or Berlin.

    How it will all end is still unclear, but we might suddenly find that a ‘diversionary’ war is created in Syria or even Iran. At least thats what history tells us happens when financial matters get in the way of political ambitions.

  • Cameron was right to turn down Rompuy’s suggestion; it would have given up the Veto that Cameron had promised to use to defend British interests.

    He went to Europe with the demands of his party (and a broader portion of the public) wanting repatriation of powers in return for treaty changes. His only demands were substantially less than that: the treaty changes wouldn’t result in any more power being hand over to EU institutions. This is what he needed to have in order to avoid a referendum on the treaty that would have easily been won by Eurosceptics.

    Cameron went to Europe with the best intentions of avoiding a conflict, he demanded the bare minimum that was needed to avoid a conflict, and the Union was stupid enough to reject it. Had Cameron won, he’d have been criticized by Eurosceptics for not demanding repatriation of powers but the status quo would have continued. As it is Cameron lost but is now a hero, Eurosceptics are emboldened, and Britain will have to either carve out a new niche for itself in the union or leave completely.

    The summit is very probably a historic occasion. The Europe Union has decided to reject the principle that Britain gets opt outs in order to assuage public opinion and ensure it’s participation. That is a game changer for the fate of Britain and the EU, but not the Euro. The Euro’s fate was decided before this summit. Politician’s can’t change economic reality based on declarations in treaties or in the press. Surely the Euro-crisis has taught people that?

  • David Pollard 11th Dec '11 - 11:38am

    As Tom Keene asked on Bloomberg News “Has Cameron used the veto to protect the jobs of Goldman Sachs employees?” and “Is Nick Clegg the most important politician in Britain right now?” Answers – Yes and Yes.
    Mark, the question at the head of your article is the right one – Its the Euro’s fate that matters. What Nick Clegg has to do now is what he said he would do. Britain must show some leadership. The Coalition took the difficult decision last year to balance the UK’s books. The Euro as a whole is not in a bad position financially but they are just not working co-operatively yet. If they don’t start soon the Euro will fail. As far as Britain is concerned, we should stop the hectoring and start leading.

  • Simon McGrath 11th Dec '11 - 12:09pm

    “Also we fail to remember that in the days leading up to the start of the 1914 conflict Britain was expected by everyone – including France, Germany and the USA to either remain neutral or to join in on the German side.”

    you havent heard on the Entente Cordiale? or the Anglo/German naval rivalry? or our treaty with Belgium?

  • Keith Browning 11th Dec '11 - 1:32pm

    ‘you havent heard on the Entente Cordiale? or the Anglo/German naval rivalry? or our treaty with Belgium?’

    Of, course, which is why it was thought we would stay neutral. The Americans were going to join the side of the Germans before we invented the idea of creating Israel. Try reading some of the modern interpretations of the history of the period, not the propaganda of post war anti-German school history books.

    None of it is simple, but in the minds of many current ‘conservative’ thinkers in all countries the past is as important as the future in determining how we life our lives today.

    I am a Liberal because I want to dish the outdated stuff, but we are not being allowed to leave it all behind.

  • “Our enemy of 1000 years was the French”
    The French were the enemy of the Scots and Welsh for 1000 years? Really?

  • When a referendum was held in the seventies the electorate was asked whether they wished to join a trading block – the EEC. As an historic trading nation, trading with anyone, the proposition to many people seemed a reasonable one. Quite why this should involve subsuming our laws and ancient freedoms in order to sell goods is beyond most voters’ comprehensiion. Not having been invaded since 1066 our parliament and monarchy have evolved in a way that suits us: other less happy countries have evolved diffeerently,but that is no reason to demand that we should ditch our national interests. Cameron is pro-British: and we haven’t had too many of those lately. The Lib Dems are unused to making the hard choices- but that is what being in govt means. Wake up and smell the coffee.

  • I am slightly tired of people arguing about Britain being isolated. All that really matters is whether this agreement is enough to stop the eurozone economy collapsing in a big heap within the next year or so. And from what I can gather, it is not.

    If you find yourself aboard the Titanic the important thing is to be in a lifeboat, not to be in a crowd.

  • Finally someone writes an article that highlights what really lies at the heart of the disagreements between Britain and the other EU members.

    The founding members of the EU created their vision on the premise that they wanted to stop the self-destructive cycle that most recently devastated the continent barely a decade earlier. Britain, still dreaming forlornly of rebuilding its empire at the time, thought it was doomed to fail. Eventually economics and pressure from business forced the politicians to join, despite never really approving of the whole concept.

    Der Spiegel called Britain’s membership of the EU a misunderstanding. Europe was in it for security, safety and peace. The economic benefits were much appreciated bonus. The UK was just in it for the money.

    It’s no surprise then that eventually Britain would be cut out, as it was never really in, and never really subscribed to the vision. It’s no wonder then that the tone of almost all German newspapers this weekend has been one, almost, of relief that the “Störenfried” (troublemaker) and “Bremser” (brakesman) of Europe has finally been sidelined and the EU can get on with shaping its vision.

    Coupled with what’s seen by many on the continent as the UK’s favouring of American low-tax, cut-throat style capitalism instead of European high-tax social welfare; and breaking ranks with Europe to have it’s love-in conspiracy with Bush to illegally invade Iraq, it isn’t that surprising that the head of the German conservative (CSU) delegation to the European parliament, Markus Ferber, was quoted in the Stern as saying:
    «Großbritannien muss sich entscheiden, ob es weiterhin als 27. Mitgliedstaat der Europäischen Union seine Zukunft selbst gestalten, oder lieber als 51. Bundesstaat der USA Befehle aus Washington empfangen will.»
    (“Great Britain must decide if it wants, as 27th member state of the EU, to continue to shape it’s own future, or would prefer to be the 51st state of the US and take it’s orders from Washington.”)

    Britain wants the economic benefits that are a side-effect of the political dream. It’s no wonder then that Britain is seen as nothing but a troublemaker by those chasing their vision. In turn those with the vision are seen as dangerous, misguided and foolish by a country that cares only for its economic self-interest. It’s the clash of the idealists and dreamers with the pragmatists and profiteerers.

  • Both you and Clegg failed to answer how he would have dealt with French and German “intransigence” differently to Cameron. And this healthy public difference you mention, where was the evidence of that in Clegg’s public statements on Friday?

  • At least Scotland can now follow its dream, Independence from England and join the EU in its own right. It announced recently it wanted its own Navy, Army and Air Force, perhaps it can take back the Monarchy too.

  • Richard Swales 11th Dec '11 - 6:55pm

    Whatever the rights and wrongs of the Iraq war, 4 or the 6 largest members by population (UK, Spain, Italy, Poland) supported it, as well as a majority of the 25 members and soon to be members. The idea that “Europe” opposed it so we had to as well rests on a definition of Europe as being France plus Germany only. Actually that’s part of the problem at the moment.

  • There is a lot of focus on Anglo-German relations, but leaving aside the obliging collaborative French, what of all the other nations oft invaded and occupied by Germanic tribes. Are they all masochists to dance to Merkel’s tune now or is it more likely that the negotiations are only framed in these terms by the childlike British press? The ECB has not been sufficiently strengthened, the Euro is still in trouble. And all the while Cameron is like the one who looks around and around the room trying to work out who is the fool. There is always one, and if you can’t figure out who it is its probably you. If you were a multinational manufacturer needing to invest in new infrastructure for the European market, would you invest in a country that seems to be on its way out of the EU to a position where all the EU import tariffs will apply?

  • David Pollard 11th Dec '11 - 8:01pm

    With regard to history, I blame it all on Bismark.
    @jedibeeftrix – As far as I can see (and I rely for my business news on the Bloomberg TV channel), the Eurozone as a whole is not in as bad a position as was the UK, or the US for that matter. Rather than hector the Eurozone to adopt the UK solution, we should encourage the countries to work together. It appears that Greece cannot be helped at all because their debts are so great, so the others should put their efforts into Italy and Spain. We all have to remember how the Euro got into this mess. All the countries signed up to a stability pact and then almost all of them disregarded the rules of the pact. What Germany wants is for everyone to keep to the rules and this time with sanctions, but national governments will ignore it even then. Compare Gordon Brown and his ‘Golden rule’ a reasonable way to run the country’s finances, then he broke his own rule. The coalition government should admit that to the Eurozone. Can politicians not be trusted to run a country’s finances honestly when they even cheated on their own expenses?

  • ………, but leaving aside the obliging collaborative French, …………….

    That just goes to show…l the soaraway ‘Sun’ gets everywhere… What next? barbed wire on the beaches; Corporal Jones in charge of the UK Border Agency? Listen to yourselves…

  • Richard Swales 11th Dec '11 - 9:44pm

    Alistair – but nobody really thinks Britain should do that. Even the eurosceptics think Britain should leave the EU, but not the entire EEA (in other words we would still be in the single market with free movement of goods and workers). Whether that is desirable politically (we still have to follow most of the rules but no longer have any say in them) is another thing, but it is nothing for investors to worry about.

  • john stevens 11th Dec '11 - 10:02pm

    The euro will be fine. What has been lost over the past forty eight hours is the Lib Dems capacity to benefit from that outcome.

  • If the eurozone survives and prospers then Britain will rightly be open to the charge of turning our backs on our partners in their hour of need. However, if it collapses or a significant number of countries have to leave then Britain will stand as an example of a different way forward.
    In a speech at the end of November the Polish foreign minister, Sikorski, outlined in stark terms what needed to be done to safeguard the euro. The speech is well worth reading in full. Here is an excerpt:
    “If we are not willing to risk a partial dismantling of the EU, then the choice becomes as
    stark as can be in the lives of federations: deeper integration, or collapse.
    We are not unique in facing the fundamental question of the future of our federation
    over the issue of debt. Two successful federations tread this way before us. Americans
    passed the point of no return in creating the United States when the federal
    government assumed responsibility for debts that states incurred in the War of
    Independence. Solvent Virginia bargained with more indebted Massachusetts, which is
    why the capital was fixed on the banks of the Potomac. Alexander Hamilton fathered a
    compromise under which everybody’s debts were jointly guaranteed and a revenue
    stream created to service them.
    Switzerland also became a real federation when rules were established for incurring
    debt and transfers between her richer and poorer cantons.”
    One admires the speech for its honesty. However, is this really going to be agreed by all the 17 members of the eurozone, without referendums and without negative reactions from their electorates, and within sufficient time to convince the markets?

  • Richard, the the EU consents for countries to be members of the EEA. You can’t assume that the UK can always do what it pleases and get away with it. A lot of Tories claim we can be like Switzerland or Norway. Norway has a small population and vast natural reserves. Switzerland basically has a parasitic relationship with the rest of the EU, we’re too populous to emulate this.

  • Interesting look at (continental) European history, however, the lesson is incomplete as it has left out the role Britain (and it’s allies) played in all this.
    It would seem that firstly the UK has not initiated any conflict within continental Europe but has been drawn into the sorting out of its squabbles to restore a status quo, calling on both Russia and more recently the USA in this task.
    The question I therefore raise is what does this say about Britain’s role in Europe and hence the role that continental Europe is looking/expecting Britain to fulfil?

    Looking at this history we also see that nationally-based royal families often inter-married in the interests of diplomacy and stability. Looking at the current political EU we do not see any political marriages of the same calibre. Perhaps a useful initiative would be to have some members of parliament and the lords drawn from the ruling parties of other EU-member governments?

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