Friday, December 09, 2011

Britain Opts Out

David Cameron gave the EU Summit a hefty kick in the gonads yesterday, when he refused to sign up for the new treaty which, allegedly, will resolve the Euro crisis.

Cameron said:

"I said before coming to Brussels that if I couldn’t get adequate safeguards for Britain in a new European treaty, then I wouldn’t agree to it.  What is on offer isn’t in Britain’s interests, so I didn’t agree to it. 

Let me explain why this matters.  Of course, we want the eurozone countries to come together and to solve their problems.  But we should only allow that to happen inside the European Union treaties if there are proper protections for the single market and for other key British interests. 

Without those safeguards, it is better not to have a treaty within a treaty, but to have those countries make their arrangements separately.  That is what is now going to happen....

...The key question for Britain was: do you allow that to happen within the European Union treaties if you are not happy with the safeguards you are given?  I wasn’t prepared to agree that treaty, to take it to my Parliament in that way, and that is why I rejected signing this treaty today.  The right thing for Britain.  A tough decision, but the right one."

Sarkozy may well feel rather pleased with himself at the moment, as it means that in the new "two speed" Europe France will have greater sway. However, France and the Eurozone may care to consider that David Cameron's refusal to sign up was based on a shrewed assessment of whether the Eurozone and its "new treaty" is capable of resolving the Euro crisis.

Cameron has judged that the crisis will not be resolved by this course of action, and that signing up would be a disaster for the UK.

Here's what the others signed up to:

- Eurozone states' budgets should be balanced or in surplus.

- A similar rule will also be introduced in eurozone member states' own national legal systems; they must report national debt issuance plans in advance.

- As soon as a euro member state is in breach of the 3% deficit ceiling, there will be automatic consequences, including possible sanctions, unless a qualified majority of euro states is opposed.

None of the above will resolve the Eurocrisis, the ECB needs to act as a buyer of sovereign debt (ie print money); a role that it refuses to accept.

Cameron, over the coming days, will be vilified by many for his actions. However, time will prove that the Eurozone and its "leaders" are not up to the job of running single currency.

Oh, and by the way, the "new treaty" is not yet a done deal. Member states have to formally sign up to it, and at least Poland and Ireland are already discussing having to hold referendums before they sign up!

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