15.12.2011
Cameron's Euro veto con trick
Despite the deepening rift between the Tories and Liberal Democrats over Europe, writes Eddie Ford, both are committed to further attacks on the working class
Playing the part of Winston Churchill, or at least in his imagination, David Cameron went to the Brussels lair on December 9 and showed the British bulldog spirit. Standing up for the plucky underdog, he vetoed any amendments to the Lisbon treaty. Naturally, Cameron was defending Britain’s interests against the creeping advance of the Hydra-headed Euro-bureaucracy.
Of course, what Cameron actually said he was doing was protecting the City and its interests - in whose name he exercised his veto. Not you and me. He made no bones about that. The very same bankers, speculators and spivs who have grown obscenely rich and privileged whilst British workers - just like European workers - face a regime of increasing austerity and steady immiseration. Indeed, the very same people - as servants of capitalism - who have been rewarded for their part in bringing the world economy to the brink of catastrophic collapse. They get fabulous bonuses beyond the dreams of avarice, whilst we get a pay cut or have to work longer for less when it comes to our pensions.
In short, Cameron was standing up for the interests of UK capitalist club and the predatory City - against the capitalist bureaucracy of the European Union ‘superstate’.
Fraud
But in reality he did not even do that. Far from it. Despite the patriotic hype, amplified ad nauseam by the chauvinist tabloid press, Cameron’s ‘veto’ in many respects was a fraud - a con trick on the British public. The idea that the City was under threat from Merkozy’s ‘new fiscal compact’ was transparently absurd, unless you believe that ardently pro-capitalist politicians are somehow militant anti-capitalists in disguise. Most aspects of the British financial services industry (routine banking, insurance and accounting) that Cameron was supposedly defending in Brussels from the perfidious bureaucrats are wholly unaffected by the proposed changes to the EU treaty. Yes, there is the dreaded financial transaction tax (‘Tobin tax’) that so annoyed Cameron and apparently posed a mortal danger to the entire British way of life. Yet the plain truth is that for this to be in any way effective it would have to be agreed by all theEU members. Therefore the ‘threat’ was nil - a phantom. Even the fairly tame regulatory proposals, which in theory can be authorised by qualified majority voting, would require unanimity - otherwise they would be a nonsense.
So then what exactly did Cameron ‘veto’? Bugger all. For him to return from Brussels as if he was a conquering hero is a joke. Rather, he has just isolated himself from the EU negotiating table, which actually makes it more likely - not less - that the interests of British capital might be sidelined relative to the other competing capitalist powers. David Cameron’s beloved City is no safer or more protected today than it was before December 9. Get real. Not that the City movers and shakers were exactly quaking in their boots at the thought of what might happen to them if Cameron had not wielded his mighty Arthurian ‘veto’.
But, of course, Cameron’s pathetic theatrics at Brussels play well - at least for now - with the rightwing press and his demi-monde circle of hedge fund managers, millionaire business people, country-house aristocrats and media executives (all of whom generously bankroll the Tory Party) - no to the federalist road, down with the EU juggernaut, and so on. As is only to be expected, a bit of Brussels-bashing can never do you any harm in British politics. In fact, Cameron has received a boost in the opinion polls - according to a Populus Poll conducted by The Times, 57% thought Cameron was “right to use the veto”. Meanwhile, the latest Reuters/Ipsos Mori poll on December 14 showed that support for the Tories had risen by 7% to 41%, while backing for Labour had slipped two points to 39% - with the Liberal Democrats on 11%, down one point at less than half what they polled in the general election 18 months ago. A trend broadly confirmed by a ComRes survey for The Independent this week that put the Conservatives and Labour neck and neck on 38%. This predictable rise in support for the Tories post-Brussels is in dramatic contrast to the increasing pessimism with regards to the economy, given that only 12% expect it to improve in the next year - the lowest figure since the credit crunch began to bite home for real in September 2008.
Reading these statistics, you can conclude that Cameron’s veto was actually a fairly smart move - from the perspective of naked political opportunism, that is. Which ultimately is what matters for establishment politicians.
Overall, Cameron’s political calculations at the Brussels summit are not too hard to discern - we are not dealing with the mind of a genius here. Under no circumstance could he risk having to push an EU treaty change through the Commons in a situation where he would be reliant on Liberal Democrat, Labour and a minority of Tory votes - inevitably accompanied by a ever-more hysterical chorus demanding that there should be a referendum on Britain’s relationship with Europe. Imagine the constant beating of the war drums from his Eurosceptic right wing and its clamorous press.
Recriminations
The recriminations from Cameron’s veto have come thick and fast. José Manuel Barroso, the president of the European commission, told MEPs in Strasbourg that the British prime minister wanted special privileges for the UK. Barroso insisted, however, that Cameron’s decision to deploy the veto did not amount to a “split” between the 17 euro zone states and the rest. Rather, he stated, the new December 9-10 accord between the 26 EU states was “not an agreement at 17-plus, but an agreement at 27-minus”.
Barroso went on to claim that, in search of “compromise”, he had tabled a clause which made clear that the various regulatory measures in the fiscal compact applied only to the euro zone countries and thus would not undermine the single market or permit any “discrimination” against non-euro states. However, he added, this compromise “proved impossible” thanks to Cameron’s intransigence, arguing that his demands represented a “risk to the integrity of the internal market” - which was just unacceptable for other member-states. Regardless of the UK though, most governments at the Brussels talks had “showed their willingness to move ahead with European integration towards a fiscal stability union” - they clearly wanted “more Europe, not less”.
As for the Lib Dems, they could barely contain their fury, Cameron’s veto coming as a humiliation for an avowedly pro-European party. But Cameron was prepared to see Liberal Democrat hand-wringing - he knows the Lib Dems cannot break with the alliance and so provoke a general election. They would get hammered, perhaps to the point of near liquidation - in reality that looks likely to be the case even if the election is held in 2015, as constitutionally scheduled.
In other words, they are slaves to the Tory Party, not the other way round, as the paranoid Tory right wing like to make out. Chief slave Nick Clegg informed the BBC’s Andrew Marr show that he was “bitterly disappointed” by the outcome of the Brussels summit - Cameron’s veto is “bad for Britain”, which will now be “isolated and marginalised” within the EU. More directly still, Clegg said there was “nothing bulldog about hovering in the mid-Atlantic” and admitted that the first he knew about Cameron’s decision was when he was brusquely woken up by the PM’s telephone call at 4am on December 10.
Like modern-day Kremlinologists, commentators wrote reams about Clegg’s notable absence from the Commons on December 12 when Cameron defended his veto decision. Slightly unconvincingly, Clegg said he had stayed away to avoid being a “distraction” (isn’t he supposed to be the deputy prime minister?) and insisted that the coalition was “here to stay”. With typical sensitivity, the Daily Mail slammed Clegg for his “cowardly no-show” and accused him of a “deeply worrying immaturity which risks doing great harm to both his reputation and that of his party” (December 12) - it goes without saying that the Mail cares deeply about the fortunes of the Liberal Democrats, just as the rope cares about the hanged man. In the end, all 57 Liberal Democrat MPs abstained on a successful motion “commending” Cameron for his conduct at Brussels.
Perhaps more seriously still, Chris Huhne, the Liberal Democrat energy secretary, bluntly told Cameron in a cabinet meeting that he had “no authority” from the coalition to veto revision of Lisbon treaty - which might well be true from a strictly legalistic point of view. Apparently, Huhne and his colleagues had “not envisaged” the outcome at Brussels - the clear implication being that Cameron had the authority to table four agreed demands for Britain’s financial services, but no actual authorisation from his coalition partners to brandish his veto in the manner he did. Now Clegg, by all accounts, is facing a whispering campaign from senior Lib Dem figures - especially the peers - who have suggested that he was “duped” by the prime minister. Nothing like loyalty to your leader.
We have seen a partial breakdown of coalition unity, though the loveless marriage continues purely because one partner in particular fears the consequences of divorce. And both, despite everything, remain committed to ‘balancing the books’ and further attacking the working class.
The Eurosceptic hounds have scented blood, however, and are hungry for more. If a veto, then why not a “fundamental renegotiation” of the UK’s ties with Europe and a repatriation of powers back from Brussels in the lifetime of this parliament? Some Tory backbenchers are now referring to the “English spring” - for them the culmination of the ‘revolution’ would be a referendum on EU membership. They are now plotting to ‘hijack’ a vote in February on the overhauling of the European Financial Stability Facility’s bailout fund by placing an amendment which would force through another referendum vote - essentially a rerun of last month’s rebellion, which saw 81 Tories defy the leadership.
Contraction
To nobody’s surprise, the Merkozy plan to ‘save the euro’ was nothing of the sort - they still have no clue where the money is going to come from to avert the ongoing crisis and prevent a calamitous collapse of the banking system. We now learn that the European leaders will no longer be compelling private bondholders to take a loss (‘haircut’) as a result of euro zone bailouts, though “voluntary restructuring” remains a possibility. So gone is the forced “private sector involvement” in rescheduling of debt, which will no doubt delight the European Central Bank. Gone too, of course, are Eurobonds - the ECB will not be acting as a lender of last resort. No sign of Chinese gold either, or indeed any gold from anybody - maybe the International Monetary Fund will stump up something. Then again, maybe not.
Recession looms darkly in both Europe and the UK. Gerard Lyons, the chief economist at Standard Chartered, has predicted that the euro zone will contract by 1.5% next year, while the UK will suffer a fall in output of 1.3%. For Lyons a major concern is that macro-economic and regulatory policies are essentially pro-cyclical, hence the tendency of those in charge to carry on digging when they are in a hole. So the euro zone countries already suffering from a deficiency of demand are told to deflate their economies still further, making it impossible for them to hit deficit reduction targets. Similarly, banks are being told by the regulators to build up much bigger capital buffers to make them safer, a policy that would have had great merit during the boom years but - by restricting credit flows to firms - makes another downturn even more likely.
Meanwhile, the Chartered Institute of Personnel and Development has issued another gloomy forecast - the UK labour market faces a “slow, painful contraction”, with firms delaying recruitment of more staff. The CIPD predicted that the jobs market would worsen in the medium term amid global economic “turmoil” and its quarterly survey of 1,000 employers found firms’ future hiring plans dwarfed by likely public sector losses - last month the institute reported that the public sector had been shedding jobs at five times the rate previously predicted by the Office for Budget Responsibility. In the CIPD’s opinion, “recruitment intentions are falling”, which will make further rises in unemployment “seem inevitable”. And if the euro zone crisis ends up driving the world into a slump or depression ...
Such bleak forecasts have been given further credence by the latest Office for National Statistic’s figures, which reveal that UK unemployment rose by 128,000 in the three months to October to 2.64 million - the highest level since 1994. Therefore the jobless rate was 8.3%, up from 7.9% in the previous quarter. Youth unemployment climbed to 1.027 million, the highest since records began in 1992 and beating the previous record set only last month. And long-term unemployment continued to rise - the number out of work for 12 months or more rose to 868,000, amounting to one in three of all unemployed.