I have delayed posting about the Prime Minister’s use of the veto in the early hours of Friday morning because although it is great to see a Prime Minister standing up for our interests rather that meekly falling into line as has been the pattern in recent years, the issues involved are complex and I wanted time to reflect and to hear what the Prime Minister and others had to say in the House of Commons today. As the Prime Minister acknowledged, none of the options available to him were ideal.
The fundamental dilemma we face is that, despite not being a member of the euro (thank God), the current crisis in the eurozone still affects our economy and the measure necessary to solve it in the long term (a single fiscal policy setting out how much each member can borrow) will, in effect, lead to a dominant economic power in Europe, a situation that British foreign policy has since time immemorial sought to avoid.
The Government has concluded that it is in our interests that eurozone members do what is necessary to solve the crisis but that certain safeguards are required to protect our interests. Contrary to some reports, we weren’t asking for an opt-out but for an EU-wide guarantee that there will be a level playing field for financial services companies in all EU countries (to prevent eurozone countries using qualified majority voting to promote their financial services sectors at the expense of those of countries outside the eurozone) and that each member state would be able to regulate its financial sector properly (the Government wants to reform our banks along the lines set out in the Vickers report and it is not clear whether this can be done under current EU regulations so, whilst he was trying to protect financial services jobs in London and elsewhere, the Prime Minister wasn’t sticking up for bankers - he wanted the freedom to regulate them more effectively).
Sadly, our European partners weren’t willing to provide such safeguards. The Prime Minister was then faced with the choice of agreeing a deal he didn’t think was in our interests or using the veto. Faced with that choice, he was absolutely right to use the veto.
Some of the comments about this decision on both sides of the argument have been rather silly.
There is no reason for triumphalism - as the Prime Minister acknowledged today in the House of Commons, using the veto is not without risks because the other countries signed an agreement among themselves, albeit outside the legal framework of the EU, and there is no guarantee that they won’t work together in a way which will be damaging to our national interests. It will however be more difficult for them to do so than if the Prime Minister had agreed to a treaty amendment.
On the other side, Ed Miliband, in an article in The Guardian, said the Prime Minister “could have insisted that a different deal was done”. Er no, Ed. The Prime Minister could stop an agreement of all 27 countries that he wasn’t happy with but he has no power to stop other countries signing an agreement among themselves. It’s slightly scary that someone who aspires to be Prime Minister should be so misinformed.
He also criticised the Prime Minister for letting the other 26 countries “make crucial decisions without us”. This is the standard argument against opting out - even if you don’t particularly like what is being discussed, you should never leave an empty chair at the table. But surely there comes a point where, if you feel what is being agreed is not in our interests, you have to say no and walk away. Someone who is never prepared to do that isn’t fit to be Prime Minister. Tony Blair did it when the euro was established - eurozone members have been meeting and taking decisions that affect us ever since. If Mr Miliband thinks it’s a mistake for us not to be at that table then presumably he believes we should join the euro?
There’s also been a lot of talk about us being isolated. On some issues eg foreign policy we play a leading role in the EU but we have to accept that we are a member of a club with 27 members, 17 of whom share a single currency and have just agreed to fiscal union and 8 of whom aspire to join them. We, along with Denmark, don’t want to go down that road. We shouldn’t be embarrassed by that but nor should we try to deny the reality.
Membership of the EU is vital to our national interest. We are a trading nation so access to the single market is crucial and membership of the EU strengthens our ability to progress our foreign policy objectives too. But that doesn’t mean that when something is proposed that is contrary to our national interests we have to say yes. The Prime Minister was right to say “no” on Friday morning and he’s also right to continue to engage with our European partners. Judging by the response when I was out door knocking on Saturday and the polls that have been published over the last few days, most of the British public agree with him.