As David Cameron met German Chancellor Angela Merkel, on one level it is reassuring to know that the Prime Minister thinks decisive action needs to be taken in order to underpin the Eurozone, as reported in the Guardian yesterday. The quote from the Prime Minister’s spokeswomen goes on to say that confidence in the markets is essential, and in order to regain that confidence decisive action needs to be taken.
The unfortunate aspect of the story is that Messrs Cameron and Osborne are in no position to take any kind of decisive action. By waltzing out of the last December’s European summit which established the fiscal pact, David Cameron threw away any hope the UK may have had of a voice in the future of the single currency. Although this may not be a bad thing at the present time since another voice supporting austerity would not be helpful for the Eurozone, it leaves the UK powerless when it comes to the Euro. If Cameron leaves any lasting legacy, he will go almost certainly go down in history as the Prime Minister who sold Britain down the river.
Mr Cameron’s is now following a long tradition of British Prime Ministers turning to the United States of America. Apparently in a telephone conversation the night before last reported in the Daily Telegraph, Cameron agreed with President Obama that there is a need for “an immediate plan” to resolve the Eurozone crisis. Mr Cameron seems to view this weasely statement as significant, strong enough to make sure the British media knew about it.
Of course the problems in the Eurozone need resolving; no-one would disagree with that. The UK’s economic woes also need sorting out. Even the United States itself could do with a bit of economic firepower. There are two points to be considered. One is that the world is now a very small place and economic difficulties can never be confined to one country or region.
The second point is more specific. Neither President Barack Obama nor Prime Minister David Cameron has competence to deal with the Eurozone’s affairs. The G20 summit in Mexico later this month will discuss the Euro and many other economic issues and will more than likely seek to find an acceptable way forward.
However, the power to make decisions on the future of the Euro, how the Eurozone is governed and what will be done to improve the current situation, such as introducing Eurobonds, will be for the members of the fiscal pact to decide. Britain is not there. Lecturing Eurozone leaders about what they should or should not do makes no difference as the power has already been conceded. Cameron’s hectoring only further alienates other EU leaders and is therefore not a wise long-term policy.
President Obama has, of course, been much too sensible and rational to lecture the Europeans. He no doubt views talking to the British Prime Minister as a courtesy and probably keeps close to Britain as much for old time’s sake as anything else.
That really sums up the UK’s current standing with the United States. We are, of course, still strong allies, share a common language and go back a long way. Nevertheless, the relationship these days is all one way, the way of the USA. Britain has little real power in relation to its transatlantic ally, and now very little power in the Eurozone which is bound to lead to an erosion of influence in the European Union.
David Cameron could not have done better if he had wilfully set out to reduce Britain’s standing. Much of his anti-EU shenanigans has been to placate his feral Eurosceptic backbenchers. On Wednesday’s Newsnight Tory MEP Daniel Hannan sang the praises of Norway and Switzerland telling us how they thrived outside the European Union. With the greatest respect to both of these countries, they are happy to be isolated and have never sought any position on the world stage. Britain, I believe, still wants to be a leading international power. The only way to do this is to play a full and leading role in the European Union.