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Sunday 11 December 2011

Cameron's veto - or is it?

If you are totally convinced that the UK should be ‘in Europe’ (whatever that may mean), or that federalism is a dirty word, stop reading now.

That’s the bigots out of the way, now we can have a sensible discussion.

I had this crazy idea many, many years ago… we’ll come back to that later.

It’s been another strange week. A week that has seen David Cameron come back from an EU meeting proud to have used his power of veto, and the sight of independent examiners giving more than strong hints on exam questions. Totally unrelated I hear you say; maybe not.

The veto at the EU meeting in Brussels on Friday (9th December, 2011) has already had many column inches (yards) devoted to it, and no doubt many more will follow, as well as numerous hours of television reporting and pontificating.

The European Union consists of 27 members, 17 of whom are also members of the single currency, the Euro. The meeting was very much about saving the Euro (to which Britain does not belong). Unfortunately, the ten European countries that joined the Euro chose to ignore the (fairly loose) fiscal policies that had been put in place. The result was inevitable but, at least the need for harmony is recognised. It seems that the UK is confusing the Euro and the EU; they are not the same.

Enough has been written (especially by me) about the Euro, and that a single currency needs to be operated within a single fiscal unit. This ‘unit’ does not have to be a country (although it is preferable), but does need to have the same fiscal rules. History has taught us (… it’s pantomime season so … ‘Oh no it hasn’t’) that whenever a state has linked its currency to an ‘independent’ value, it ends it tears. South American countries linked themselves to the US Dollar, the US Dollar was linked to Gold, and The UK joined the ERM (Exchange Rate Mechanism)… every time it has ended in financial calamity, with substantial fallout for the country concerned, followed by a period of sustained growth.

Back in the day, French President Charles de Gaulle did not want the UK to join the EU (or the Common Market, as it then was). He was also against the United States, and the mighty Dollar, wanting, instead, to go back to the gold standard (where paper currency was underwritten by physical gold reserves). General de Gaulle did not think that he could trust Anglo-Saxons to be sensible. This, coming from the man who had personally been protected by the British during WWII and saw his country liberated from the occupying German forces by none other than the Allies (of which the UK and USA were very much a part). De Gaulle must have been very convinced of his opinions… having famously stated ‘I am France, France is me’, one could not underestimate his ego. History tells us he was right.

David Cameron says that he used the veto to protect the city of London. In fact he has, inadvertently, done exactly the opposite. In fairness, he was very much between a rock and a hard place but, when it came to it, solidarity flew out of the window, together with any expectation of solidarity from the UK.

Much of the world crisis of 2008 was blamed on the collapse in Sub-Prime instruments. These were effectively bundles of mortgages with better than average rates of return (they would be, as they were not being advanced to top notch credit risks; the clue is in the name) that were repackaged as safe investments. The theory being that, as there were so many individual mortgages, if a couple went sour, it would not unduly adversely affect the rate of return. This is very much like saying that the Titanic was a very safe place after it hit an iceberg; few people die on cruise ships so, after the first dozen, your statistical chances of survival are higher. Absolute bunkum but, said quickly, you might fall for it. These were a typical Anglo-Saxon tool; one that is merely illusory. Great while the illusion lasts but, when the children find out that Santa Claus does not exist (apologies if any bubbles are being burst here); they all shed a tear or two.

One joins a club to be amongst people of similar interests, beliefs, aspirations. The UK has always wanted to be different… whether it’s driving on the left (unlike the rest of Europe), hanging on to imperial measures (remember the outcry when Brussels ‘dictated’ that supermarkets had to price food in metric units). The UK has always been a reluctant member of the EU, and the EU has always only just tolerated UK membership, with its endless demands for exceptions. The apocryphal Times headline “Fog in Channel – Continent cut off” shows the attitude of a proud and insouciant nation, just as King Cnut did when he commanded the tide to halt and not wet his royal feet.

The UK has become a service economy, with wealth being created by financial institutions and their ever more sophisticated (read as unintelligible to mere mortals) instruments. To simplify, the Germans build motor cars, the French farm; the interests are almost totally opposed to those of the UK.

So, the Cameron veto will merely serve to put further distance between the 26 other members of the EU and the UK. The European majority will welcome this with open arms; it is the excuse they have been waiting for to say that the UK are unwelcome intruders, cannot be trusted when times get tough, and have no further active role to play in the EU.

So what now for the UK?

Here are three impossible alternatives:

Remove the veto, join the Euro, and play a full part in modelling the new Europe. This involves altering the national psyche so has absolutely no chance of success.

Battle with Europe every day and become more and more miserable, especially knowing that the UK has lost yet more friends amongst the 26 ‘other’ nations.

Leave the EU and ‘go it alone’, hoping that an economy built on smoke and mirrors can survive without friends.

So we are left with the ‘crazy idea’ I had so many years ago. Watching Sky News the other day reminded me of why it had originally struck me as being so obvious. The presenter had a couple of people reviewing the morning papers and the story of examiners effectively divulging questions was discussed. The American lady present said that she saw it as ‘teaching to the question’. She is of course entitled to her view. People in Europe see it as cheating, Two irreconcilable opinions.

This then leaves us with the only viable option… ask the UK’s de facto friend and ally, the United States, to become the 51st State. They speak the same language (well, almost), have very similar ideas, fight the same wars side by side, and are both not in the Euro. If you think that distance is a barrier to this idea, remember that Hawaii is also in the United States.

Mr Cameron could do me one favour (please); appoint the current Chief Secretary to the Treasury, Danny Alexander, as European exit minister. I can’t wait to write the headline ‘Danny da Veto’.

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