By Jim McConalogue
The Foreign Secretary William Hague maintained at the Conservative Party Conference that the Eurozone had become a “burning building with no exits” in a speech that was also careful to point out that British interests were closely tied to the future of the Euro area. I generally agreed with the tone of that speech but cannot now help but extend his analogy because the truth of the situation is that Britain is trapped around the burning Eurozone building with no exits.
What alarms me most over last Wednesday’s Euro summit is this: Eurozone ministers have proposed and agreed increasingly harmonised economic and fiscal government measures that will govern their Euro-policy and strongly affect the wider European Union but, because Britain is not part of those Eurozone decision-making meetings, we are effectively being excluded from a political process in which, as EU members, we are supposedly entitled to influence European Union policy. It is drastic and must be challenged. In other words, in the creation of a two-tier Europe, we are shut out, to the detriment of growth in the UK economy.
Worse still, when Eurozone ministers come to agree on tighter fiscal union and economic government among themselves – a policy which the Chancellor actively promotes – and it is then proven that their economically harmonised system does not work, as many economists agree is likely, then Britain will be hemmed in by an impoverished set of European neighbours with no basis for growth and having ourselves adopted the draconian rules, regulations and laws that the Euro-17 have made for us (within a Euro-centric framework). We will have suffered the truly negative consequences of a two-tier Europe.
At least the EU-17 can say of themselves ‘ah yes, we tried that and yes, having tried it, we destroyed ourselves’. What will Britain say of its observance, subservience and engulfment in this European dream? Perhaps ‘ah yes, we never really became an integral part of the economic bloc, we reluctantly joined it, suffered the consequences as it turned into a unified political government in which we largely failed to exert any real lasting influence and allowed the ultra-integrationists of the Eurozone to destroy our democracy and prosperity’?
To look back on William Hague’s speech, it is surely Britain that must declare that it is trapped in the burning building with no exits.
We have just had a Euro summit statement last week. It has concluded that “There will be regular Euro Summit meetings bringing together the Heads of State or government of the euro area and the President of the Commission.” This is an exclusive commitment to government by a Euro-elite, to which the outer-tier of the EU will simply be subject to rules created through the meetings and decisions of the inner core.
The meetings are set to take place at least twice a year, “at key moments of the annual economic governance circle”, says the Euro Summit Statement. There will be a new President for the Euro Summit.
It can no longer be claimed by those in Britain that it is nothing to do with us because the Euro-crisis has been everything to do with Britain, including bailouts, and the statement specifies that Euro Summits will define “strategic orientations for the conduct of economic policies and for improved competitiveness and increased convergence in the euro area”. On vital decisions over economic policy, competitiveness and status of convergence – all of which affects Britain – we will be excluded. The President of the Euro Summit will ensure the preparation of the Euro Summit, but since we are nothing to do it, how are we to have any influence at such a summit which decides issues as important as control of the Single Market.
We certainly do not get to elect the President of the Euro Summit because he or she “will be designated by the [Heads of State] of the euro area at the same time the European Council elects its President and for the same term of office.” Apparently this new President of the Euro Summit will keep the non-euro area Member States “closely informed of the preparation and outcome of the Summits.” Is it really good enough that Britain will merely be ‘informed’ of its fate?
The summit statement reaffirmed the Eurogroup will ensure “ever closer coordination” of the economic policies and promotes strengthened surveillance of Member States’ economic and fiscal policies in the eurozone. Must we sit by and wait for the President of the Euro Summit, the President of the Commission and the President of the Eurogroup to meet once a month, possibly with the President of the ECB, to decide on the fate of the British economy, because in so far as the inner-core of governance by Eurozone members goes on, Britain’s growth strategy will certainly be heavily affected by their judgements and decisions.
Of course, it is natural that Eurozone ministers should promise in their statement that all of this would be done whilst “fully respecting the integrity of the EU as a whole” but that proposition is laughable. All of those proposals necessarily mean we must have a referendum because this and all else that has happened are real changes and Britain must be given the direct opportunity to say yes or no.