No one puts David in the corner!

natalie hamill, 9 December 2011

The UK woke up reeling from the astonishing news that Prime Minister David Cameron has walked out of an EU Summit and effectively removed the UK from EU treaty negotiations: treaty negotiations which were aimed at ‘salvaging’ the Eurozone. Not just making headlines in the UK; it seems David Cameron’s decision has captured attention across the globe. Of all the angles being examined, two are particularly striking – the apparent shock that David Cameron has followed through and done exactly as he said he would, and whether such a brash move has damaged the UK’s international standing and its ability to negotiate with its EU neighbours.

The first point is interesting in itself. The UK’s current government has a certain mastery of its words and its EU rhetoric is nearly always tailored to what it thinks the public (and a large group of the Conservative Party) want to hear. David Cameron understands when emotions are running high, when it is time to insist on budget contribution freezes, and when there should be no more transfers of sovereignty to the EU. But it seems the public is clued-up to the fact that these sentences are often little-more than empty sound-bites, and there is little expectation that such assertions will be followed through: when it comes down to the negotiating table there are 26 other self-interested voices and the UK is rarely so persuasive after all.

Not this time. David Cameron detailed last week that he would not sign the UK up to any treaty that lacks adequate safeguards for the UK’s financial services industry; with a financial transaction tax on the table and others clamouring for EU fiscal integration as the only solution to the crisis, such measures could have a serious impact on the international competitiveness of the UK’s financial services. While the Prime Minister’s stance was openly reported, no one actually expected him to play hard-ball at the crucial make-or-break summit, especially with mounting international pressure on solving the crisis sooner rather than later.

Whether one is surprised or not by the outcome of last night’s summit, the real crux of the debate should be whether the Prime Minister has actually done the UK any favours. Cameron and William Hague would have us believe that the move was essential for protecting the UK’s sovereignty; David Cameron stuck to his guns and safeguarded the UK’s interests. Does this mean we are we now outside the ‘inner-circle’?  Should we feel isolated? On the contrary! Hungary has also balked, and the Swedish and Czech governments are refusing to proceed further before their Parliaments are consulted. Denmark (which has a Euro opt-out), unsure whether to join or stand aside, is like a rabbit in the headlights and could pull away too.

There will still be a treaty, but the momentum has shifted. Cameron’s exit has ensured that, instead of a treaty that would have amended the acquis communitaire itself, the new treaty will be solely for those in the Eurozone and the member states interested in joining the Euro. Cameron was quick to point out that the UK does not fall into the latter category. The EU’s institutions will still play a role in this new type of treaty (although it seems no one can quite define this role as of yet) and as these institutions represent the entire EU, not just the states remaining in the treaty negotiations, the UK’s interests should not find themselves discriminated against.

But not everyone is so sure. German Chancellor Angela Merkel and French President Nicolas Sarkozy are both adamant that a strong and immediate resolution to the crisis is key and there isn’t time to pander to the interests of individual member states.  It has always been very unlikely that the EU would bend to the UK’s desires – not only is protecting our financial services not a concern for those embroiled in the depths of the crisis, it also encourages the sort of pick and choose behaviour which slows down negotiations and complicates the whole process. The possibility is very likely that  the UK could wake up to a bleak future shunted to the EU’s side-lines.

Hindsight is a beautiful thing and something that will no doubt determine whether Cameron was very brave or very stupid. Right now, it suffices to say Cameron was backed into a corner by his own words, and whilst the drama plays out across the world’s headlines we can only hope he has made the right decision.