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Can The Brits Ever Be Rational About Europe?

by Sean Flynn
17 December 2011 21 Comments

Has Cameron won an historical political victory by vetoing the proposed regulations in Europe? Or has he just completely and utterly screwed most of us over?

David Cameron Billboard

David Cameron going down a storm with the majority of the population, as usual.

Let me see if I’ve got this right. David Cameron exercised his veto in Europe in order to allow The City of London to escape the same tax regime as the rest of Europe…

That would presumably be the same poorly regulated UK financial sector that, along with Wall Street, is largely responsible for the first Great Depression of the 21st century.

This, my friends is the reason why David Cameron gambled with Britain’s international reputation: for the sake of bankers whose venal conduct and naked greed has wiped out the wealth and security of ordinary working people from Jarrow to Jakarta.

OK, apart from freedom of movement for people, goods and services, an improved Europe-wide infrastructure, a predictable and dependable market for food and several generations of continent-wide stability and socio-economic development. Apart from that, what has the EU ever done for us?

The Eurosceptic right would have you believe that Cameron is an English hero of Churchillian stature. His was apparently a principled stand against the ever-encroaching hegemony of Brussels with its straight bananas and infernal kilograms.

Yes indeed, if that Europe had its way we’d have no pounds at all; sterling or imperial, miles would be swapped for kilometres and our very sausages could lose the name just because of some of EU rubbish about meat content  (‘seasoned sawdust was good enough for my old granddad and he fought the Germans…twice…died of woodworm…’).

Eight out of the UK’s top ten trading partners are in the EU and if it all goes really cunty-booby in the Eurozone, then the contagion won’t be long jumping the Channel.

But in all the Little England bleating, something is being lost in the British approach to Europe. Sure, the UK is one of the net contributors to the EU budget but what seems rarely to be taken into account is the actual benefit in terms of trade that comes from being a member of the EU. The ‘Nation of Shopkeepers’ does very well out of its European neighbours.

Let’s put it this way, eight out of the UK’s top ten trading partners are in the EU and if it all goes really cunty-booby in the Eurozone, then the contagion won’t be long jumping the Channel. And the way things are shaping up that could still turn out to be sooner rather than later.

Let’s be honest, Europe really is in a right old two and eight. In Ireland there has been some debate about ditching Nama (the Irish National Asset Management Agency) in a fast sell-off; it’s that old scabby-plaster philosophy innit?

This however is more akin to lancing a big boil full of pus and bankers. Nama, to those beyond  the Hibernian Heimat (better start getting used to the German names…), seemed like a good idea at the time; put all the toxic stuff  in one place till we figure out wtf to do with all €75bn of it.

(It was therefore with bemused, exasperated resignation that I read recently in the Irish Times that Nama, de facto owner of Irish ghost estates from Bruff to Muff, was buying into London’s premier White Elephant, Battersea Power Station…)

But while the UK tries to sit pretty and the Eurosceptics get to crow ‘I told you so’, it’s pretty clear that there are quite a few problems under the hood of the Great British Economy.

Recent unemployment figures from the Office for National Statistics show youth unemployment still over a million and there was a rise in the total number of unemployed to 2.64m in the three months to October.

When the European Banking Authority pronounced that, as a result of findings from their most recent stress tests, banks in the Eurozone would need to raise a further €114.7bn in capitalisation; there was little surprise that UK banks successfully passed the 9% capitalisation threshold. What did surprise people was that big hitters from Germany like Deutsche Bank and Commerzbank were among those singled out by the EBA as needing to raise more capital.

What was hidden in the detail however were a several sobering truths for UK plc as another festive season begins. According to The Telegraph, itself sourcing a Deloitte report commissioned by Nama: “British banks, despite beginning their disposal programmes much earlier than their Continental European peers, still have by far the biggest pool of toxic assets. Deloitte estimates the size of the non-core and non-performing assets held on the balance sheets of UK banks at £460bn, more than the combined total for Ireland, Spain and Italy.”

So if the Euro crashes, those UK banks (which have proved such a boon to the economy over the past three years) could face overwhelming defaults and drag us all even further into this toxic mire of spiralling debt.

Vital signs from the wider economy don’t offer much hope either.  Recent unemployment figures from the Office for National Statistics show youth unemployment still over a million and there was a rise in the total number of unemployed to 2.64m in the three months to October.

The British Prime Minister might be lionised by a press that still longs to sneer and snigger at Johnnie Foreigner and his funny foreign ways but the press in the rest of Europe has merely dismissed the British and moved on.

“Bye Bye Britain – Europe moves forward without you!” warned Germany’s Das Bild (in German of course…).  Der Spiegel was less philosophical: “Cameron is a coward”. Elsewhere, “Birth of a Europe without London” proclaimed Spain’s El Pais.  Beyond the parochial and six-fingered confines of the Euro-sceptical Conservative rump, David Cameron is being vilified whichever way he turns.

What we got instead was Ed Miliband. And he made Chris Huhne look good…

Parliament? Well, he must have known he’d face some tough opposition there when he tried to explain why he’d played so fast and loose with Britain’s future. But then, at the cabinet table he had to sit and listen to Energy Secretary Chris Huhne telling him had no authority from the coalition to veto a revision of the Lisbon treaty.

Chris Huhne? Really?

It has come to a pretty pass indeed when a paragon of probity and rectitude of such a low order as Huhne can sit in judgement of the Prime Minister. One might have thought that – what with his alleged traffic woes (and their attendant and putative judicial perversions) – the Energy Secretary might be apt to less outspoken critique of the PM.

The Lib Dem front-bencher’s credentials were most recently called into question following allegations made by his ex-wife Vicky Pryce. Huhne has denied claims he asked his then wife to take responsibility for a driving offence in 2003.

As a consequence, the Energy Secretary has been under police investigation for more than five months now.  The case is still being considered by the Director of Public Prosecutions (DPP). At the end of November, the CPS however suggested they were “very close”   to arriving at a decision on whether to prosecute Huhne, at least according to DPP Keir Starmer QC.

The Energy Secretary has all the recklessness of a condemned man offered the reprieve of a suicide mission.  What has he got to lose? Hell, he may as well go down fighting.

Then there was Prime Ministers Question time on Wednesday. What was required was an oratorical tour de force to rally the left against this snide Tory popinjay of a Prime Minister. What we got instead was Ed Miliband. And he made Chris Huhne look good…

If the Tories really wanted to pick a fight over Europe, they could almost certainly have picked a better one than defending the rights of bankers to keep screwing the rest of us working stiffs.

He barely landed a blow. Cameron parried Miliband’s anodyne inquiries about the nature of relations with coalition partner Clegg with questions of his own about the Labour leader’s fraternal relations.  It was a poor performance and mischief-makers like blogger Guido Fawkes were tweeting that Labour insiders were already numbering Ed’s days after his bad showing at PMQs.

The European Commission also weighed in against Cameron on Wednesday. Michel Barnier, European Commissioner for the internal market, criticised Cameron’s decision last week to veto the EU treaty change aimed at solving the euro zone’s sovereign-debt crisis.

“It sounds as though the government is arguing for two single markets: one for financial services from which it can opt out, and one for the rest of the economy,” Barnier said. “That is simply not possible.” French Prime Minister Nicolas Sarkozy reportedly accused David Cameron of behaving like “an obstinate kid” when he wielded the British veto at the European summit last week.

What the hell is it about Europe that gets some British people so wound up? For starters, it’s not some place ‘over there’…Britain can’t just sail off across the Atlantic to rock up on the US east coast as the 51st state; much as that might be attractive in a neo-con, sci-fi kinda way.

The reality is that, whether you like it or not my British chums, you belong to a European nation, you are surrounded by lots of other European nations: some big, some small; some even had big empires just like Britain used to have, but all that is in the past (at least for most Europeans).

We’ve all spent centuries going to war with each other and that’s kind of the whole point of this European Union project:  to make sure that all our common interests are so closely connected that we’d never want or need to go to war with each other ever again.

If the Tories really wanted to pick a fight over Europe, they could almost certainly have picked a better one than defending the rights of bankers to keep screwing the rest of us working stiffs out of our savings, our livelihoods and our children’s futures.

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griff 9:51 am, 17-Dec-2011

i'm not going to disagree with the logic of what you say. it makes absolute sense to trade freely and even to some degree to have some sort of political cooperation. we always have traded with them and will always continue to. similarly the germans don't want us to stop buying their BMW's & Mercs, so there's no reason for it to end and it won't. but what turns many rational people into little englanders is the army of unelected people making up rules the effect us in a city in the heart of europe. you drill down to the nub of the problem and this is it. i'm reasonably aware of the economic and political landscape but i have no idea who my MEP is. I wouldn't even know where to find them, lets alone find our what what they actually do. my concern is that our democracy, the direct line to people that govern me and who take half of what i earn is getting salami sliced away. and when we question this we're dismissed as if we're mad. or as if we don't really understand the complexity of it. but there is a whiff of something not quite right in europe and we shouldn't give up our hard earned democracy so easily.

Seán Flynn 1:57 pm, 17-Dec-2011

Griff, you're right on the money; the EU's democratic deficit has always been a problem but deciding to veto for the banks' rights wasn't the right fight to pick with Europe. On the whole democracy thing anyway; I've got real doubts about the efficacy of the system; if you want to know who really wields the power in Westminster (apart from the EU) look at the lobbying groups who work there on behalf of the blue chip companies and the special interest groups representing non-elected business leaders. We'd have no more representation here in the UK if we left the EU, we might even have less (ie we'd even lose our tits-on-a-bull MEPs)

Melanie 2:53 pm, 17-Dec-2011

Labour were in power during the first banking crisis of this centuary and did nothing to regulate the banks. They did fight an illegal war in Iraq though. Regarding the liberals I think the student fees debacle is fairly representative of their commitment to their manifesto. For the conservatives we Cameron, former Bullingdon club member, bleating about the riots at the same time as cutting vital services to the same communities. It doesn't matter who you vote for you still get the government.

Seán Flynn 3:45 pm, 17-Dec-2011

@Melanie: It doesn't matter who you vote for you still get the government. I saw a piece of graffiti once and it said something like this: 'if voting actually changed anything, it would be illegal'

Melanie 5:17 pm, 17-Dec-2011

I didn't even mention the expenses scandal. Or questionable friendships re Liam Fox, Tony Blair and our former trade envoy prince Andrew. I would drink petrol in order to piss on them if they were on fire is my current favourite.

DrRic 6:30 pm, 17-Dec-2011

12% I'll say it again 12% 12% 12%. Thats how much of ALL the tax in the UK the evil bankers (ie. the UK financial sector) provides. The author makes some intelligent comments about the UK's trade situation, and our level of debt. The problem is, agreeing to the EU tax would be like a turkey voting for Christmas. Over time we can rebalance our economy - right now we can't fuck off the single biggest slice of our tax revenue. The UK would be shooting itself in the foot. The REAL failure is that Cameron (and you can argue about if this was deliberate or not) failed to negotiate an agreement that kept us at the centre of the EU, but didn't kill almost the last functioning part of our economy.

Seán Flynn 6:57 pm, 17-Dec-2011

@Melanie: I'd gladly buy you a double! @DrRic: fair point about tax revenues. I'm guessing that you may be worried about the banks decamping somewhere else (like they threaten to do every time anyone even mentions financial regulation). We are continually being told that financial services are the backbone of this country’s economy as if that’s a good thing. We are then told in the same breath that if we impose too stringent a regulatory regime, the banks will spit the dummy, up stumps and decamp en masse to somewhere the government is less worried about the exploitation of its proles. Let’s take a closer look at this stupendous lie propagated so helpfully by the established media on behalf of the banks’ press officers. Well, from a pure risk point of view, what is being sold as a UK strength is actually the huge structural weakness which is one of the primary causes of this current depression in the first place.If financial services represent too high a proportion of the income generated by UK plc then surely, as a good capitalist, I would be looking to spread my bets. If the banks want to go, let them. And that brings us on to the hollow threats of the bankers themselves. I have often heard at first hand the brays of these empty sociopaths in the City's champagne bars: the cocky assertions that all they need is a desk and a laptop to start trading and making even more money than before. To that I’ve only got this to say: If they coulda, they woulda. Having covered financial services as a journalist, I know exactly how much their trading systems cost to install and maintain. Moreover, I also understand how utterly dependent they are on their proprietary trading platforms and software. For the banks to move in most cases, the costs would be ruinous. The banks nevertheless continue with the charade and no-one in the established media ever seriously questions the substance of their bullying inducements. The UK is kept on its toes with heavy hints of Hong Kong removal men in the offing but it is a poor poker bluff or more accurately; it is a lie. Aside from the massive logistical outlay, there would be prohibitive costs in terms of recruitment, severance payments and staff relocation expenses and the banks are well aware of this.

Frank 7:47 pm, 17-Dec-2011

Excellent story!

john gill 9:01 pm, 17-Dec-2011

Whilst on holiday in Italy and Spain the ordinary people such as waiters tell us not to vote for the Euro as they can't live on it. Most of them are having to do 3 or 4 jobs to survive; so I for one Englishman don't want it. The French hate us although we lost millions of young men along with our allies, saving their skins.

Melanie 9:08 pm, 17-Dec-2011

@Sean digressing but I wondered if you knew anything of the Jim Mc Cormick case? He sold $85 million of fake bomb detectors, mainly to Iraq. He was bailed (?!) till Nov 2011 but I can't find any news about the outcome of his trial. I wonder who his friends are? Great read btw.

Seán Flynn 10:25 pm, 17-Dec-2011

Cheers Melanie, I remember this McCormick story; well worth checking up with the Avon and Somerset Constabulary as to the status of that one; even if the response is only the run around.

? 11:00 pm, 17-Dec-2011

"12% I'll say it again 12% 12% 12%. Thats how much of ALL the tax in the UK the evil bankers (ie. the UK financial sector) provides" Are you sure, DRRIE? What is your source? What precisely do you mean by "12%. Thats how much of ALL the tax in the UK the evil bankers (ie. the UK financial sector) provides"? 12% of what tax, and what is 12%? Do you include income tax paid by its employees, council tax for its offices etc- tax that someone is going to pay anyway or do you mean tax by bankers as an 'industry'? finally, what is the relationship between the tax the evil bankers (ie. the UK financial sector) have paid and the amount we've paid to save their necks and bonuses?

Sam 1:32 pm, 18-Dec-2011

I don't think the real danger is banks leaving the City if it was regulated, more like if they were ever put under that level of scrutiny the game would be up. The TBTF on Wall Street run all their financial ponzi schemes out of the City of London, in fact this is the real "special relationship" Hedge fund managers are making trades every day in the City which would earn them a criminal record in the US. There are dozens of MF GLobals and Madoffs still operating in the Square Mile, it is the capital of the financial derivatives which really lie at the heart of this crisis. The banks have trillions in these toxic instruments off the balance sheet (because the market is unregulated) This stuff has been leveraged out of thin air to many times GDP of the PLANET! They are refusing to accept that these contracts should be written down because all the "growth" we have experienced over the last 20 years has been on the back of this garbage. But on a deeper level, this also has to do with the unwritten constitution of our country. The Corporation of the City of London outdates the monarchy, parliament and the Anglican church. It has been around in some form or another since Saxon times. George Monbiot is wrong about a lot of things, but this article is a good one and only the tip of the iceberg when it comes to the "unaccountable corporation" http://www.guardian.co.uk/commentisfree/2011/oct/31/corporation-london-city-medieval

bee 2:14 pm, 18-Dec-2011

The EEC helps no one but the civil servants and unions who get a lot of paid work out of it Europe wide... The EEC always wants more money but have gotten their budgets for the next year passed and would like to introduce the Tobin Tax under the guise of sorting the banks out - This Tax will only be filtered down to street level - to everyone and everyone will pay it - it wont sort the banks out - Its just another Tax - its just another rise in an already corrupt unnaccountable EEC structure. And this corruption has spread through to all civil servant groups. They say there is no money - but the civil servants seem to be still spending loads of money - the truth is their is lots of money but only civil servants can spend it. Me and you - they European beurocrats would like us all to pay more for them. Statistics show that the majority of people who live in Europe know that the un-accountability of the whole EEC Budget is a long laughing joke that has got to the point of not being funny anymore. Why throw more money their way - it needs a full restructure - one that makes everyone proud to know that the unnacountable corruption in the EEC has once and for all beeen dealt with. The only true way out to truly better Europes democracy is to allow an extra tick box on the ballot form that says none of the above and make it a vote count. This would take democracy up a step for the better. No one seems to notice that the

DrRic 2:23 pm, 18-Dec-2011

@ ? - Go and Google, you can check the facts for yourself very easily. Obviously this is the internet, and nuanced opinions don't exist. Please note that I wasn't arguing necessarily in favour of the bankers. I actually think its scandalous no one is doing serious prison time for some of this mess. All I am saying is that we need all of our economy right now to be working to drag us out of this - a tax that hurts us more than any other country in the EU is bad business.

Seán Flynn 2:38 pm, 18-Dec-2011

@? & DrRic, what is more apparent than anything is your common ground, we've all been fist-fucked by this industry and we all yearn to return to a time when an honest man/or woman could find a job and have the right to expect a fair day's pay for a fair day's work. It's right and practical to look at how things stand right now with this over-representation of financial services bringing a big wedge to the Treasury coffers, it doesn't excuse what is essentially a disgraceful state of affairs, there is no excuse for widening wealth gaps here in one of the world's richest nations; social mobility? don't make me laugh. But if you're looking for nunace check out @Sam's point about our medieval bredrin in the Square Mile: "I don't think the real danger is banks leaving the City if it was regulated, more like if they were ever put under that level of scrutiny the game would be up." Plenty of food for thought there.

oldun 2:39 pm, 18-Dec-2011

So the answer is for the UK toallow the EU to raise a tax,the largest contributor being the UK, and allowing the EU to use it to bail out the Euro, The UK not beinmg part of the Eurozone, this seems bright? DOH. To read this rubbish one would think that it's only bankers in the UK that caused the problem. The fact that Labour spent £4 for every ££ poubnd of rvenue had no contribution. Werll it shows schools have broken up for Christmas. Reading this reminds me of the rubbish spouted by Eastern European cheerleaders in the 80's. Playground economists.

Seán Flynn 2:56 pm, 18-Dec-2011

@oldun As far as I'm aware, I didn't advocate tax and spend (or playing Simon says with our continental cousins), I merely wondered whether our economic welfare might not be more closely connected to the future of Europe than some people in this country were prepared to acknowledged. I also apologise if the information (sourced from disreputable Maoist sources like The Telegraph and The Economist) appears as "rubbish spouted by Eastern European cheerleaders in the 80's", but that's playground economists for you. I think you'll probably also find that the veto in the end had very little to do with whether the EU was going to have tax-raising powers in the UK -- that was merely the way the spat has been presented to us -- which was prompted me to ask the initial question: 'Can The Brits Ever Be Rational About Europe?' Your opiinion, while greatly appreciated, leaves me no closer to an answer to that one...

StraightEstate 4:10 pm, 18-Dec-2011

Playground economists would be an improvement though. That is all.

Hass 3:34 pm, 25-Dec-2011

Great summary Sean! After moving away from the UK more than 15 years ago I am amazed at the sheeplike mentality of many Brits when it comes to European politics. It's like WWII never ended for them.

john gill 3:03 pm, 26-Dec-2011

FRANCE! You stay on EurOwn (With the Germans). Why should we help you out again? You ungrateful load of Creeps.

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