Rising German ambitions for treaty-change pile the pressure on David Cameron
THE DAILY Mail carries a cartoon of Angela Merkel this morning sporting a Hitler moustache, jackboots, riding breeches and doing the Nazi salute. It is all a terrific joke, apparently, a parody of the Mel Brooks comedy “Springtime for Hitler” (adapted by the Mail to add such chortling touches as a “Greek President Stavros” character, David Cameron as Neville Chamberlain and Nick Clegg as a Hitler youth). This follows columns by the Mail‘s chief political thinker, Simon Heffer, accusing Germany of trying to found a “Fourth Reich.” Over at ConservativeHome, a website not known for slavish pro-Europeanism, a sighing Tim Montgomerie asks: “Can we talk about Germany without resorting to WWII imagery?”
I suspect that is another of John Rentoul’s “Questions to which the answer is no.” For what it is worth, I idly wonder whether some deep-seated psychological complex is playing out at Northcliffe House, Kensington headquarters of the Mail empire. Perhaps the tabloid feels bound to denounce the Fourth Reich because—for much of the 1930s—it so enthusiastically supported the Third Reich? Who can forget the July 1933 “Youth Triumphant” leader in praise of Nazism by the paper’s owner Lord Rothermere, informing British readers that before Herr Hitler took over, “Israelites of international attachments were insinuating themselves into key positions in the German administrative machine”? Or the Mail‘s 1934 praise for British fascism, headlined “Hurrah for the Blackshirts”? Nothing that a few courses of therapy couldn’t cure.
The flesh-and-blood David Cameron and Angela Merkel are meeting as I write this, amid the cool, concrete and glass modernism of the Federal Chancellery in Berlin. A Fourth Reich will not be on the agenda. Instead, Mrs Merkel has bad news to break to the British prime minister. First, Germany is not about to give in to British prodding to allow the European Central Bank to fire up the printing presses and act as a lender of last resort for the euro zone. Secondly, Germany is pushing for substantial changes to the EU treaties in order to create ferocious borrowing and spending rules for euro zone member governments, policed by the European Commission and, ultimately, the European Court of Justice. The idea is to be able to say to the German electorate: yes, we have to pay for bailing out Italy, Greece and others now, but we promise that it will never happen again.
Why is this bad news for Mr Cameron? For two reasons. One, the British government thinks that only the promise of massive European Central Bank intervention can calm the markets, especially now that bond markets are testing even AAA rated euro-zone members such as France, yields are soaring in Spain and failing to fall much in Italy, despite its new technocratic government. The British are not convinced that markets will be soothed by a promise of slow, complicated treaty changes to toughen up the rules, that are so substantial that (I am told) the Irish government has warned Berlin that they would trigger the need for a referendum in Ireland.
Two, Mr Cameron does not want a big treaty change right now. The prime minister may have told Parliament in October that he yearned to repatriate powers from Europe, and that the time for reforming Europe was coming. But as I reported from Berlin in a recent column, he has been told by the Germans that if he asks for half the shopping list being drawn up by the Eurosceptics (who are mustard-keen to brandish Britain’s veto over a new EU treaty to demand back powers from Brussels), then, with regret, Germany will seek a new treaty outside the EU system, robbing Britain of its veto.The government is still keener to avoid any treaty change that transfers powers from London to Brussels, because under the terms of the new EU Act Britain would then have to hold a referendum on that treaty (which would be lost, almost certainly).
Mr Cameron also has to remember his Liberal Democrat partners in the coalition. Nick Clegg, the Lib Dem leader and deputy prime minister, is not about to come out all guns blazing in defence of Europe: that would be electorally bold, to say the least. But Mr Clegg has made clear, to Mr Cameron in public and countless private conversations, that he will not support a British commando raid on Brussels that aims to take a new treaty process hostage and come back with armfuls of concessions and sweeping opt-outs (not least because it would not work). For coalition reasons, then, and also because Mr Cameron does not want to pick a fight he is going to lose, the British government has spent the last few weeks trying to convince the Germans to forget treaty changes, or keep them very titchy indeed. In an ideal world, the British would probably now settle for a titchy treaty change that affects only the euro zone countries and is agreed at the level of all 27 members. In exchange for British consent, Mr Cameron would ask for some modest chunk of red meat to throw to his Eurosceptic backbenchers.
All of this leads me back to the Daily Mail, and its doom-laden accusations that the Germans are trying to take over Europe. The central irony is that British Eurosceptics and Angela Merkel are allies right now, though they may not know it. The Eurosceptics are desperate for a chance to use a British veto to grab back lots of powers, and the Germans want a treaty change so large that vetoes would come into play. The German obsession with using EU instititutions such as the European Court of Justice to police the profligate Club Med nations also makes it harder for Berlin to carry through on its threat to go outside the EU system and cut Britain out of the loop.
The irony is not lost on Nick Clegg, whose allies can be heard sighing about an “unholy alliance” between the legalistic opportunism of Tory Eurosceptics and the legalistic stubornness of the German government.
So, to end this posting before the press conference in Berlin, what sort of red meat might be on offer for the British? As it happens, I spent the day in Brussels yesterday, talking to senior figures, a few hours ahead of Mr Cameron’s flying morning visit to Brussels on his way to Berlin. I found intense interest in what Mr Cameron might ask for, and a strong desire for him to get something to show the British public and MPs: the Eurosceptic mood in Britain is well-understood at the top of the EU machine, and they do want to keep Britain in the club. But there is less clarity about what Mr Cameron actually wants.
The British, I think, have also not made up their mind what they want. But asking around, my sense is that these are the sorts of thing being looked at in London.
One, action to block a Financial Transaction Tax being pushed by France, Germany and the European Commission, but whose costs would mostly fall on the City of London. Britain can veto the application of such a tax at the level of the whole EU, but cannot block it being applied only within the 17 countries in the euro zone. Yet Britain fears a euro-only FTT, because it would still fall on lots of trades with one end in the City of London. So one option might be to seek a deal to kill the FTT in any European guise.
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Two, the old Tory classic about repatriating social and employment laws from the EU level. That is harder than it look, as such laws are scattered across the EU treaties, rather than clumped in one place as they used to be in the days of the Social Chapter. There is also the small detail that others may not want us to have such an opt-out, as it would amount to what the French president, Nicolas Sarkozy (currently lagging the Socialists in the opinion polls, ahead of next year’s presidential elections) would doubtless call “social dumping”.
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Three, some sort of emergency brake/written protocol/political agreement acknowledging that Britain is home to the lion’s share of many forms of financial trading in the EU, and thus should not be outvoted by the rest when it comes to financial regulations that could impose real pain on the City of London. I have written before that this would be a real concession and more valuable, frankly, than chasing after the impossible dream of being a low-regulation, low-cost free rider on the single market.
Alas, in Brussels, senior figures are pretty hostile to the idea of such a sweeping carve-out from financial regulation.
Two points are made. Appallingly, the European Parliament now wields hefty powers thanks to the Lisbon Treaty. And the European Parliament is chock-full of MEPs who think that City bankers and wicked Anglo-Saxon markets are entirely responsible for the current euro crisis (rather than, say, the euro zone politicians who spent a decade running up giant debts). At a recent committee meeting, when a free market-minded MEP pointed out that a given measure might cost tens of thousands of job losses in London, others chorused “good”, and one MEP muttered that London should be “bombed”.
Finally, and this is frankly a reasonable objection, senior figures in Brussels and Berlin point out that it is pretty odd for Mr Cameron to say that he will fight the fragmentation of the single market with all his might, and then turn round and demand a specific British opt-out from rules on the financial sector that is one of the core pillars of the single market.
A mess, in other words. But there is an understanding that Britain needs something, for political reasons, just as Mrs Merkel needs something. Alas, as others have pointed out, the something that Mr Cameron needs amounts to “less Europe”, while Mrs Merkel’s something amounts to “more Europe”.
More later, after the presser from Berlin.
Źródło: economist.com , Nov 18th 2011