It’s in Britain’s interests to be more involved in Europeby Peter Mandelson / November 16, 2011 / Leave a comment
Take a leap of faith. Assume that, despite the woes in Greece, Italy and elsewhere, the roughly sketched out eurozone rescue plan succeeds in saving the currency union, in some form. Assume that the eurozone, whoever is in or out, is set decisively on the path of closer fiscal union and collective debt liability. Assume that all the consequent decisions about eurozone structural reform and the difficult political adjustment required are put in place. If the euro crisis is to be resolved in the long term, these things have to happen. Where does this leave Britain?
For most British Eurosceptics, the fact that Britain has found itself drawn into supporting the troubled eurozone, either through the International Monetary Fund or directly, as it has with the Irish bailout, is the unacceptable price of European union. Euroscepticism has been the majority view in the Conservative party for the last 20 years, but it is now the unanimous view, Kenneth Clarke notwithstanding. October’s parliamentary revolt by backbenchers over a referendum on British membership of the European Union was chiefly a disagreement over tactics, not principle, that divides a Eurosceptic government from its extremely Eurosceptic dissenters.
Whatever your views on European integration, Britain’s euro dilemma may be about to get a lot worse. Eurosceptics, however, are missing the point. As the British debate about “renegotiating” our ties with the EU rears its head again, the reality is that the eurozone will renegotiate its ties with Britain and the other non-euro EU states—whether we like it or not.
The tension in Britain’s position was perfectly captured by the sight of David Cameron provoking a reproof from French President Nicolas Sarkozy at the Brussels summit in October, for appearing to want to have it both ways. Britain doesn’t want in, but it wants to have a say on the way the eurozone solves its problems.
In a sense, Cameron’s concern is totally understandable. Britain’s economy is symbiotically linked to that of the eurozone. British banks are directly or indirectly exposed to the weaker European sovereigns to the tune of hundreds of billions of pounds. Purely on economic grounds, the health of the eurozone’s constituent economies is vital for Britain’s own fragile economy and key to its long-term prosperity.
However, a more integrated eurozone will fundamentally change the dynamic of the EU. The assumption has long been that the EU could tolerate member states moving forward…