THE USE by David Cameron of the veto in Brussels on Friday has unleashed a new and malign dynamic not only in the UK’s European and bilateral relationships, but in its domestic politics. For the British prime minister this was a crossroads moment of real significance that has called into question the long-term engagement to the EU. His backbenchers may be jubilant, but the decision has opened up a split with the Liberal Democrats that may yet affect the longevity of the coalition.
And it has sharply re-emphasised with regional parliaments in Belfast, Edinburgh and Cardiff, how much the country’s European policy is driven by a specifically English agenda.
Sold by the Tories back home as a magnificent victory in defence of the City, another Agincourt no less, the truth is that Cameron emerged from the summit with less than he had when he went into the meeting, with the UK’s “vital” interests less protected.
Take the regulation of the financial markets: this is trundling on through the Council of Ministers, voted through by qualified majority, and will remain applicable to the City as long as the UK remains part of the EU. Rightly so, as the report on the 2008 nearcollapse of Royal Bank of Scotland yesterday provided a timely reminder: weak regulation was critical not only to the RBS’s problems but those of the entire financial sector. That other Cameron bugbear, the prospect of a financial transactions tax remains firmly on the EU agenda, although far from agreement.
And now, breaking with 40 years of the country’s strategy of being at the table, close to the heart of all major EU decision-making, the refusal to be part of the fiscal union will place the UK firmly outside the room when the 26 meet in future to thrash out economic strategy. As the French noted tellingly the last time the UK decided to obstruct decision-making in the EU – in 1996 over the lifting of BSE restrictions – the British had not understood the fundamental difference between their approach and that of the French empty chair policy in 1965. The French then were trying to block decisions, the British were trying to force a positive decision. To do so you need to win friends and influence people.
And, having deeply alienated its EU partners, what prospect now the negotiation of a return of powers to Britain, the real demand of the Eurosceptics? Their joy, and approval of his stance, is likely to be short-lived. In fact, Cameron’s “victory” was not only a reversal of what Jonathan Powell, Tony Blair’s former chief of staff, described as 200 years’ “efforts to maintain a leadership role in Europe”, but a resounding strategic defeat.
From an Irish perspective, fears of loss of business to the City have been overplayed, for all the above reasons. But if the UK is marginalising itself in the EU, a renewed emphasis on the bilateral relationship will be important. In the end, however, Ireland’s place, though once defined on the world stage by our relationship with our neighbour, is now in Europe. Britain’s casting off of the lines to the mainland and drift into the mid-Atlantic does not change that reality.