Triumphalism of UK eurosceptics may indeed be very premature and misjudged. Oliver Marc Hartwich, an Australian of German origin who is a harsh critic of the European Union has an item at the free market Centre for Independent Studies, ‘A British pawn in Europe’s Game’. What he argues, very convincingly to my mind, is that the German and French governments wanted the UK to veto a possible European Union treaty on fiscal union. The reason they wanted a veto is not that they are against fiscal union, but that it is easier to get an intergovernmental agreement through rather than a treaty. A treaty could trigger automatic referenda in Ireland and Denmark. I’m not well informed on what exactly would trigger a referendum in either country, but it is definitely the case that in both countries certain changes to EU law have to be ratified by a referendum, triggered at a lower thresh hold in Ireland than in Denmark. A treaty on fiscal union certainly sounds like it should at the very least trigger a referendum in Ireland. There could be political pressure for referenda in other countries. As Hartwich points out, referenda on EU proposals are not exactly always a success for the yes camp. The intergovernmental agreement will exclude the UK and could lead to decisions with a negative effect on the UK financial sector, making a complete nonsense of eurosceptic joy in the UK.
On Hartwich’s analysis, Merkel and Sarkozy played a passive aggressive game, with Sarkozy in particular being highly provocative, in order to get the UK to do what France and Germany want it to do, but apparently as a UK decision. Even if Hartwich is wrong about how deliberate this was on Merkel and Sarkozy’s part, he is certainly correct on the logic. France and Germany push for what they know the UK will not agree to, the naturally petulant Sarkozy pushes buttons in the UK, Cameron feels obliged to satisfy the intense euroscepticism of the Conservative Party through the drama of a veto.
Confirming Hartwich’s analysis, we can see that the City of London (the district of London containing the Stock Exchange and many finical companies,with a special form of local government and its own ‘Lord Mayor’) has very definitely not rushed to welcome the Cameron veto which is supposed to protect the City from onerous regulations and taxes imposed by EU countries which have a smaller financial sector. Financial services are about 20 % of the UK economy, putting it a few per cent age points ahead of manufacturing. Though Hartwich’s sneer that the UK has no industry other than financial services is highly exaggerated and surprising coming from a free market thinker. I have to say Germans generally enjoy mocking the UK as a country with financial services and little else. Perhaps that is bursting out through Hartwich’s free market mask.
Though I agree with Hartwich’s analysis on this issue, and share his general enthusiasm for market liberalism, I don’t share his view of the European Union. A unified Europe with a democratic government, a continental wide political sphere, and a sense of shared purpose, while promoting diversity at national and sub-natşonal levels, is a major ideal for me. Something I need to discuss, when I’m not so busy picking up on the debate around the Euro crisis. For now, I will just say that the economic weaknesses Hartwich generally refers to in his criticisms of the Euro should be and can be death with through a full economic, monetary and fiscal union, on the basis of a fully accountable democratic political structure. The politics of this are very difficult and something I can’t deal with right now.