Cameron is wrong on Europe

David Cameron has vetoed European treaty changes aimed at solving the Eurozone crisis. Instead, at least 23 European countries – nations both in and out of the single Euro currency – will form an informal pact to tighten their fiscal coordination.

Cameron insisted afterwards that British interests would not be served by any treaty changes, rationalising his decision to join Hungary and walk away from the negotiating table. But his choice was based on satisfying Tory Eurosceptics and on what is clearly a powerful Eurosceptic party and media interest in the UK.

Has his decision isolated Britain?

Cameron’s argument was twofold. First, that Eurozone problems are for the Eurozone to solve. Second, that if a “shopping list” of British interests could not be inserted into any treaty changes, the UK should disengage completely. Both are wrong.

Let’s deal with the first point. Simply put, our core economic interests are at stake in any solution to the Eurozone crisis. The Eurozone composes the majority of the European Union and the lion’s share of our economic health depends on trade with Europe. As a result, our economic futures are naturally intertwined. Sweden and the Czech Republic, neither a member of the Eurozone, have grasped this. They have understood their similar relationships with the Eurozone and were willing to make treaty changes to help their economic main partners, and themselves, out of a hole. Instead, to borrow an analogy from David Miliband, the UK has decided to jump into a rowing boat with Hungary and bob next to a new European super tanker.

Second, David Cameron has made a big deal of British interests. He included in his shopping list a veto on any Financial Transaction Tax (FTT), insisting that a uniquely British exemption on any future FTT be woven into any treaty change and walking away from the table when this notion was rejected by our European partners. He failed to mention here that Britain already has a veto on any FTT, as the powers to create such a tax stem from the Lisbon Treaty. This disingenuous approach has provided Cameron with a powerful anti-EU narrative at home, but it will not serve Britain’s interests in the medium and long term.

The real danger here is that Britain’s relationship with Europe may now fundamentally change. For those who eventually want Britain out of the EU completely, this is a step forward. For those who want us to be still engaged, while fighting hard for our own national interests, it is a step back. Sometimes it’s right to say no to Europe. But not at the creation of a new, informal bloc inside Europe. This is because any changes in the way Europe will govern its finances will inevitably also mean changes to the way Europe governs its economies. It’s likely now that the Single Market, our main benefit from EU membership, will adapt and change along with any informal Eurozone solution. Decisions on trade in Europe will slip from our grasp without a seat at the table, and we could find ourselves politically and materially much poorer as a result.

Cameron will want to send a message that he has said no to Europe. While many might make the instant judgement that he has stood up for British interests, even at the outset listening to radio phone ins and reading other media, I get the impression that this quick win is also balanced by those who are not sure if this was the correct move for one of the big EU nations in the midst of financial crisis.

Claude Moraes is a Labour MEP for London