Opportunity or threat #1 – How will Cameron respond to a European Monetary Fund?

We have a British general election looming large which the Conservatives are odds-on to win (whether that will be with a useful majority or not is another matter), and it is no secret that the British electorate are somewhat sceptical of the EU and the Conservative portion of it particularly so.

In an effort to win over the euro-sceptic rump of his party he made the following pledges:


1) The referendum lock
2) A United Kingdom sovereignty bill
3) A guaranteed say for MP’s if Ministers want the EU to extend its powers
4) Opt out from the charter of fundamental rights
5) Return of powers over criminal justice
6) Repatriation of control over social and employment legislation

The general verdict was that pledges one to three were easy crowd-pleaser’s, little political capital both at home and abroad would be required in implementing them, and by the same token they would have very little effect given that Lisbon was to be the last constitutional tinkering for at least a decade.

Where it gets tricky for Dave, so the received wisdom goes, is pledges four to six because they effectively require unanimous agreement from all EU nations that Lisbon be exhumed from its final resting place in order that Cameron can further dismember the remains. Lisbon was traumatic for all parties, and no-one among the political elites on the continent is going to agree to Dave meddling unless there is some hefty payback, and given the tide-like rise of federalism that payback is unlikely to be palatable to a British electorate. Talk about robbing Peter to pay Paul.

But that was then and this is now.

Greece is on the ropes, and the PIIGS as a whole are looking pretty wobbly, and Germany is furious that it is being asked to pay for the profligacy of the Mediterranean nations, and the solution to the absurdity of a monetary union without an economic union is a European Monetary Fund:

EMF plan needs new EU treaty, says Merkel

A new treaty you say!

On the one hand, this will only further grate on a euro-sceptic electorate who once again will be told; “this is the last time, promise”, on the other hand however this is surely a golden opportunity for Cameron; poor old Lisbon will indeed be exhumed as the continent desperately tries to bolt-on some financial competence before speculators crash the Euro, and Dave can join the party with hatchet in hand.

This whole surmise rest on a question: will any putative European Monetary Fund be limited in the scope of its economic management to those economies that are within the Eurozone?

If the answer is yes, then surely Cameron is holding a royal flush.
Europe will need Britain’s agreement for the creation of a European Monetary Fund, which means that Dave now has the leverage to make good on pledges four to six, and best of all he can tell the electorate that for once ever-deeper-union will work in Britain’s favour, as Britain will be outside of it as a non-Eurozone country. He can hold a referendum and happily and enthusiastically campaign for a yes vote, safe in the knowledge that the British electorate will probably back him.

On the other hand things will be a lot uglier if the answer is no.
If the European Monetary Fund is part a broader economic oversight that will encompass all EU members then Cameron has an ugly job ahead of him, because there will be a new treaty, and he will be obliged to make good on his referendum-lock pledge, and he will have to do it in the teeth of a vicious electorate enraged that they have once more been sold down the river. Would Europe do this? Well that remains an unknown, but given the predilection for transnational progressivism I would imagine there is a general horror at the idea of an al-a-carte EU with no real cohesion as a single entity.

If negotiations do lead down the path of a pan-EU economic governance, as opposed to just the Eurozone, then we are in for a bout of european political infighting that will make the decade leading up to Lisbon pale in comparison. This is a battle that Cameron never wanted, and certainly did not expect to have to fight, after all the referendum-lock pledge was harmless mummery of no political impact before the Greek economy tanked. He wants to concentrate on the economy, but the federalists work to prevent a two-speed europe, somewhere within those cross-cutting agendas lies a great deal of future pain and unhappiness.

This is why I believe that, economy aside, europe will be a defining issue in British politics if the Conservatives win the election in May, and Dave definitely won’t be pleased about that!

Update -

It would appear that at least one other person has noticed the potential for opportunity in the situation arising; John Redwoods blog post on the same day as this post was published follows a similar theme:

To bail or not to bail – the Greek question

As a non Euro member it would give the UK a good opportunity to bow out of more of the needless EU government that we do not want, and would give us the opportunity to have a refererendum on the Treaty as modified. Clearly the UK should not be party to the bails outs or the rules imposed on Euro members. The EU would doubtless need to give us substantial powers back to make a new Treaty palatable to the UK public.

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