Germany

Boris Johnson’s bid to lead the Conservative Party gathers momentum

Labour Party

You have to feel sorry for the beleaguered David Cameron. Caught between a rampant Boris Johnson on one flank and his Eurosceptic wing on the other, Cameron clearly doesn’t know which way to turn.

Today’s Times reports that Cameron may urge the public in a referendum to support the looser relationship with Brussels he hopes to negotiate. However, Cameron is prepared apparently to give the country the chance to say no to such a deal. Such a result would effectively be seen as a vote to leave the European Union.

Although David Cameron has not, as yet, made his well trailed speech on EU membership, he is obviously going in only one direction – a referendum which may well signal Britain’s exit from the EU.

Yet before we get there, the Prime Minister will have to negotiate with the EU this much hyped change in Britain’s status. He seeks to take us from the heart to the periphery getting rid of what he and the Tory Party see as troublesome regulations on the way.

There is one extremely serious flaw in this approach which is obvious yet almost virtually ignored, namely that the EU may well not play ball. The idea that powers can be “repatriated” from Brussels to London is at present purely a Conservative Party construct. Although Germany may be making some helpful noises, there are those who would be glad to see the back of Britain.

While it is true that we are a contributor country to the EU budget that does not necessarily mean there will be unanimous agreement to go along with the Tory demands and negotiate in the way David Cameron envisages. There are, as we all know, very many ways to conduct EU negotiations and since it will be 26 member states against Britain, I would hazard a guess that David Cameron is not in a very strong position.

Enter both Christian Noyer and Boris Johnson. Mr Noyer, Governor of the Bank of France, makes it clear in today’s Telegraph that he wants London stripped of its status as Europe’s financial hub, saying, “Most of the euro business should be done inside the euro area. It’s linked to the capacity of the central bank to provide liquidity and ensure oversight of its own currency.” 

“We’re not against some business being done in London, but the bulk of the business should be under our control. That’s the consequence of the choice by the UK to remain outside the euro area.”

Meanwhile Boris Johnson, according to the Times, would prefer a minimalist EU stripped down to the single market. What this really means is that the social and employment legislation associated with the single market – health and safety at work, maternity rights and much more, will go. This is what the Tories really want. Rights for people at work are, as we know, anathema to many Tories.

Withdrawing from one side of the single market while keeping the part the Conservatives see as good for the British economy may just not be a runner. It’s difficult to see how and why the rest of the EU would allow the UK such power without responsibility.

David Cameron has a long way to go to realise his dream of the EU allowing the UK to become semi-detached on its own terms rather than those of the EU as a whole. What is more, the CBI, Britain’s foremost business organisation, want Britain to stay in the EU. Cameron is, indeed, between a rock and a hard place, digging an ever deeper hole for himself.

Marginalised Britain will one day count the cost of the lost Euro opportunity

Labour Party

First things first, amongst all those many others may I wish Prince Philip a speedy recovery. He has been a tower of strength over the last 60 years and has made a contribution beyond compare to the Queen herself and the monarchy as an institution.

Nevertheless, the Diamond Jubilee celebrations can only distance the rest of the world to a limited extent. While we have been enjoying our good fortune, the Eurozone leaders have been slowly forming a reaction to the sovereign debt crisis, specifically the banking crisis in Spain.

According to the Guardian today, the recently elected French socialist government represented in this instance by Finance Minister Pierre Moscovici and the European Commission led by President Jose Manuel Barroso have just given strong backing for a new Eurozone “banking union”. Crucially, the plan could see vast national debt and banking liabilities pooled and then backed by the financial strength of Germany in return for Eurozone governments surrendering sovereignty over their budgets and fiscal policies to a central Eurozone authority.

This is heady stuff indeed, and good news for the European single currency. Finding a way through the crisis in the Eurozone countries is also good news for the UK. Probably the only thing on which I agree with David Cameron is that it is in Britain’s interests to have a stable Euro.

However, it is also very bad news for Britain. Yet again we are outside major European developments. This may not be harmful in the short-term, but will be damaging for the UK in the longer term. 

The European Council president, the President of the European Commission, the President of the European Central Bank and the head of the Eurogroup of 17 finance ministers have apparently been charged with drafting the proposals for a deeper Eurozone fiscal union, to be presented to an EU summit at the end of the month.

The European Commission and France are piling pressure on Germany to line up behind the proposal. Angela Merkel would need to take it to the German parliament for agreement.

The international financier George Soros is on record as saying: “The likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also forGermany.Germanyis likely to do what is necessary to preserve the Euro…”

Soros continued with these prophetic words, “”That would result in a Eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments.”

Everything appears to be coming together -France and the European Commission working together, plus tentative but seemingly real acceptance of their proposals by the European Council, the European Central Bank and the Eurozone countries. Although it’s by no means all set to go, it does look as if the 17 Eurozone countries are coming closer together and accepting the need for a central Eurozone authority look at budgets and fiscal policies.

Britain as ever is not part of what promises to be the most important European project since the formation of the Common Market. Unfortunately 50 years or so later, we still don’t get it. Europe is where the future lies. If Britain has any hope of being more than a bit player outside our own shores, we have to be a leader in the European Union. Today that means being up there with France and Germany in the Euro. Very unfortunately we did not join, and this blog post explains just how serious a missed opportunity this will turn out to be.

To add salt to the wounds, if Britain had joined the Euro, there is little doubt we would have been at the top table with France and Germany. Yes, we would have suffered from the current crisis in the Eurozone countries, but thanks to dogmatic Tory Chancellor George Osborne and Prime Minister Cameron we are suffering a double dip recession anyway, even outside the single currency. The Euro was always a political as well as an economic project and the UK has comprehensively failed to grasp the political opportunity.