Today heads of government from across the EU will meet in strike-hit Brussels to discuss the new treaty described by Financial Times columnist Wolfgang Munchau as “quite mad” and “truly destructive” because it would “encourage eurozone member states to adopt extremely pro-cyclical policies”. But hang on, what’s David Cameron doing there? Didn’t he deploy the British veto against the Treaty before Christmas? Sort of. As many have pointed out, it wasn’t a veto because it hasn’t stopped anything happening, and he actually agrees with the end result of the Treaty which requires an austerity lock-step as we march towards recession. Which is why he will “nod through” the Treaty when it comes up today. So what on earth is he up to?
Cameron is rebuilding bridges that he knows he was stupid to burn down in a small hours fit of pique last December, when he demanded no Treaty unless the City of London was ring-fenced like the inshore tax haven and regulation-free zone its senior bonus trouserers would like it to be – Liechtenstein-on-Thames, perhaps. He will no doubt try to portray his current position as an opt-out from the new Treaty which will not formally cover the UK, although, as Norway knows, if you’re part of Europe you are covered by the Treaties its members sign up to whether you have or not. The continental Robin Hood Tax would cover most of the financial transactions carried out in the City of London whether we’re in it or not (and you’ve got to be in it to get the tax revenue) and it’s likely that most of the financial regulation being proposed in Brussels will cover the City as well, Treaty or no, because it doesn’t need a new Treaty to legislate.
Cameron’s government actually agrees with the outcome of the Treaty – mandatory austerity, however the electorate votes – but he might not be so keen on the methods adopted to achieve it, such as Commission scrutiny of draft Budgets, European Court of Justice power to enforce deficit cutting, and balanced budget laws written in Brussels for implementation in every EU member state. These would clearly represent a loss in UK sovereignty, and trigger a referendum under the law that allowed Cameron to persuade eurosceptics to go into coalition with the supposedly pro-European Liberal Democrats. Cameron doesn’t want a referendum, so his veto that isn’t and opt-out that doesn’t is in fact a massive con-trick, allowing him to sidestep a dangerous referendum while still getting the mandatory austerity he wants to see.