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By Andrew Lilico

Yesterday's deal on Greece paves the way for explicit Eurozone economic governance. As Nicolas Sarkozy put it: "By the end of the summer, Angela Merkel and I will be making joint proposals on economic government in the eurozone. Our ambition is to seize the Greek crisis to make a quantum leap in eurozone government".  This may possibly require further changes to the Treaty – even more than those agreed last year and are still waiting to be ratified across the EU by the end of 2012.

Last year Britain should have used the fact that there was a Treaty change to renegotiate our position in the EU.  That the Conservatives were content to see a Treaty revision come and go without making the slightest attempt to deliver upon the promises of renegotiation that we made at the 2001, 2005, and 2010 General Elections is an extraordinary failing, for which we would be paying a heavy price with the public and witnessing a peasants’ revolt by our activists were it not for the fact that virtually no-one knows that a Treaty revision has been agreed and is awaiting ratification.

It’s tempting to say that that is “all in the past” except that it isn’t – ratification hasn’t happened yet, and we could (and should) still go back and say we weren’t going to accept it unless we got something in return.

But the sustained nature of the Eurozone crisis means we might just get another, different, bite at the renegotiation cherry.  Nick Clegg says “Do I think that should herald some sort of parting of the ways, where the eurozone goes one direction and we go haring off in another? Absolutely not.”  But of course we have now parted the ways.  Until very recently the Single European State (or “Eurozone Confederacy”) project was held up because a number of key members of the Eurozone (in particular Italy) were keen that Britain should ultimately be part, so as to provide a counterweight to the Franco-German axis and because most of the economic principles of the Single Market – the regulatory principles, the competition rules, and so on – are British-inspired, and without Britain as a member the Eurozone Confederacy could end up being an altogether less market-oriented, liberalising, deregulatory structure.  By showing a bit of ankle every now and then throughout the 1990s and 2000s we held the whole thing up – the Italians and others hoped that by delaying, we might eventually be ready to join.

Now that has actually be disastrous for the Eurozone.  If politico-economic integration had been pursued more vigorously and rapidly through the 2000s, after the introduction of the euro, the Eurozone might well not be in the mess it is now. I and a few others urged that Britain should release the Eurozone from involvement with us, so that it could pursue its destiny, but this was not a popular view.

That has gone, now.  The Eurozone has given up waiting for the British to be ready.  And with Osborne’s interview in the FT the other day, the British government has now accepted that it is no longer (if it ever was) in Britain’s national interest to oppose the creation of a “core” Europe the members of which dealt with each other more intimately than they dealt with us.

What remains is the detail.  Are we proposing to amble along passively, accepting that every competence that Brussels now holds and Westminster has lost will stay as is?  Or will we take the opportunity of what is now an inevitable longer-term parting of the ways to actually deliver upon those matters that Conservatives promised and promised and promised we would deliver upon when we were in opposition? Is the only difference between being in government and being in opposition, on Europe, that at least in opposition we can pretend we believe in renegotiation, whilst in government everyone can see we have been liars?

33 comments for: Andrew Lilico: EU renegotiation – another, different, bite at the cherry?

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