Cameron admits the UK is dependent on exports to the Eurozone

Wittingly or not, Prime Minister David Cameron admitted Britain is dependent on markets in the Eurozone for our exports on the BBC’s Andrew Marr show on Sunday. In other words, the UK is inherently part of the economic system across the European Union, in spite of strenuous efforts to remain outside not only the single currency but the more recent fiscal pact designed to mitigate the current economic problems.

This is absolutely not a good place to be. To be outside deliberations on the European economy, yet affected in a fundamental way, but with no means of influencing what happens to the majority of your exports is utter folly. In the same way, not being party to economic decisions which will have a profound impact on the British people is somewhere a responsible government should never find itself.

But Cameron, Clegg et al are not responsible. Cameron’s hatred of Europe is not good for Britain. Moreover, Cameron has alienated German Chancellor Angela Merkel who should be a key ally. His recent suggestion that the governance of the Euro is not yet resolved has, apparently, angered her. Taken in conjunction with Merkel’s fury when the British Conservatives left the centre-right European People’s Party group in the European Parliament, this does not bode well. Diplomacy and influence are all about gaining friends, especially significant ones, not annoying them.

The Cameron/Merkel stand-off could become even more unfortunate given the likely victory of Socialist Francois Hollande in the French presidential election on Sunday. Hollande has made it clear he will not go along with the austerity demanded by Angela Merkel and that he will not ratify any austerity deal put forward by Nicolas Sarkozy.

So where does this leave the UK?  Cameron appears to side with Merkel but she will not have much to do with him. France, potentially the EU’s second most important member state after Germany, is likely to elect a President calling for growth to lift Europe out of recession. Cameron, meanwhile, is fretting on the side-lines with nowhere to go.

A victory for Francois Hollande would, of course, be of huge benefit to Europe. We would at last have someone in a position of huge authority against full-on austerity making the case for growth. This would also give a massive boost to the Labour Party. Ed Balls and Ed Miliband have been arguing a similar case since the beginning of the crisis; they now will perhaps be heard rather better that they have so far. As Ed Balls said in the Guardian yesterday, “It is no good the prime minister telling us that the Eurozone crisis is going to last a long time. Cameron and George Osborne must accept their share of the blame”.

As, indeed they must. A YouGov poll for the Sunday Times showed that 32% blame the return to recession on UK government policies, 29% on the Eurozone and global factors and only 17% on the last Labour government. Cameron and Osborne should take note of what happens in France on Sunday. The result may tell us a lot about the future direction of Europe and the UK.

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