David Cameron Barked Up the Wrong Euro Tree
Could one do the right thing for the wrong reasons? Yes. Does it matter that it is for the wrong reasons? It does, if it shows a mindset from which other actions may follow that are wrong, uninformed and damaging.
Britain's eurosceptic press hail Cameron's decision
to veto a new EU treaty to tackle the eurozone debt
crisis, although a few commentators warn London
is now dangerously isolated. Photo: AFP
David Cameron sought, but did not get, a “legally-binding protocol to protect the City of London from more EU financial regulation”. Consequently he vetoed the EU- wide treaty change to save the Euro. Accepting the change would have involved Britain “signing up for a deal conferring intrusive rights on European institutions to enforce budgetary policy in countries breaking the Euro’s debt and deficit rules, as well as quasi-automatic penalties for delinquents” (The Guardian). The democratic deficit implied in this is clear and I am glad he rejected the deal.
What I find puzzling is that Mr Cameron appeared content to cede sovereignty on tax, spend and borrowing policies provided the “City of London” was exempted from further EU regulations. He used the veto to protect the moneyed and powerful financial sector (the City of London) from regulations, and from the Tobin tax that is supported by 66% of the British public. It is the “light touch” regulation that brought the world economy to the edge of the abyss, and reforms are essential to prevent another collapse down the line. I suspect this is the reason for his isolation, and had he made the “straightjacket” of the Euro proposed by Germany as his core objection, he might have had more support in the discussions.
The government fixation with the city and financial services shows a delusional tendency in believing that financial services will forever be the main contributor to the British economy. The realisation has not yet dawned on politicians, and particularly those on the right of politics, that the era of financial engineering is over and the future belongs to real engineering: the application of science to the manufacturing of efficient quality products. To compete internationally they must be engineered to require the minimum amount of energy in their production, and must use the minimum amount of energy in performing the task they do. The enormous value added to hi-tech manufactured goods is the only sure way for Britain to employ its people, giving them a reasonable standard of living.