Tory Wars

[Sheilbh]

The early nineties are the stuff of myth to me, so I knew the Tories had issues on Europe.  I don't think I'd realised how much though.
First the EU angle:

EU summit signals crunch time for Cameron amid Eurosceptic posturing

PM heads for crucial meeting in Brussels amid EU anger at UK tactics and Tory rightwing clamour for referendum

David Cameron arrives in Brussels on Thursday night for a European summit, buffeted by the conflicting pressures of a Eurosceptic cabinet rebellion over an EU referendum and increasing isolation in key capitals across Europe.

Tory MPs on the right met on Wednesday night to discuss tactics after the Eurosceptic Northern Ireland secretary, Owen Paterson, challenged Downing Street by declaring that a revision of the Lisbon treaty would have to be put to the British people in a referendum.

Paterson's call, echoed by London's mayor, Boris Johnson, runs counter to a law passed in July which says that a referendum will be held only if significant UK powers are transferred to the EU. Downing Street says that any agreement at the crucial two-day EU summit, designed to save the single currency from collapse, will not involve the transfer of UK powers.

Amid irritation with the Northern Ireland secretary in No 10, Paterson's allies in the three main groups on the Tory right – the No Turning Back Group, the 92 Group, and the Cornerstone Group – held a joint meeting where they said Cameron must achieve "clear gains" at the EU summit.

"We are on manoeuvres," one senior figure said. It became clear that Iain Duncan Smith, the former Tory leader, had approved the intervention by Paterson, a longstanding ally. In what was described as a co-ordinated move, following a call by Duncan Smith on Sunday for a referendum, Paterson told the Spectator: "If there was a major fundamental change in our relationship, emerging from the creation of a new bloc which would be effectively a new country from which we were excluded, then I think inevitably there would be huge pressure for a referendum."

The prime minister will join the EU's 26 other leaders in Brussels as they examine proposals to revise the Lisbon treaty to ensure that joint fiscal rules for the eurozone are placed on a legal footing. Cameron, who said he was prepared to veto any treaty revision if British demands were not met, has infuriated senior figures in Brussels, Paris and Berlin with what are seen as hardball tactics.

In Brussels, senior officials in the European commission and in member countries describe Cameron's tactics and aims as "obnoxious and disruptive".

But the pressure on the prime minister from party colleagues continued to mount on Thursday.

Bernard Jenkin, an executive member of the Conservative backbench 1922 committee, used a column in Thursday's Guardian, to say that Duncan Smith and Paterson would "not lack support from MPs, party members and voters" for their stance.

Jenkin said it was "impossible to imagine" the EU ratifying fiscal union without the UK agreeing to a referendum: "The irony is that a Conservative prime minister is resisting the very idea that would give him most leverage for getting a new deal with the EU," Jenkin wrote. "A referendum is in the national interest."

David Davis, Conservative backbencher and former leadership contender, also waded in, saying the EU-wide treaty change to establish eurozone fiscal union could trigger a referendum under the European Union Act, which sets out the circumstances under which a national poll could be called.

"The raw politics of this is that if there is a significant change in the balance of power in Europe, it would have deep implications for our future," Davis told the BBC's Radio 4 Today programme. "That is the point at which we have to have a referendum."

He added: "This is a time of great opportunity to rewrite the future of Europe to be much more effective than it has been historically, and I think that is a very good thing and the prime minister should grasp that. There is a whole slew of things we need to take back control over. If we are going to have a two-tier Europe – which is what is pretty much on the table – we should define what it looks like."

He continued: "On the financial operations, fine, let them get on with it. But when they start talking about centralising Europe, fiscal unions, more power to the commission, more power to the union, then we have to say we want a different picture."

A senior German official warned that a Cameron campaign to exempt the City of London from EU financial market regulation could open a can of worms, encouraging other countries to table their own demands, and derailing the aim of a quick rejig of the Lisbon treaty to rewrite the euro rulebook.

The negotiations take place after Germany and France unveiled radical and divisive proposals to put the euro on a new footing. If agreed, the Franco-German pact would entrench a new era of two-speed Europe, likely to make the eurozone the centre of policy and decision-making in the EU and complicating Cameron's balancing act on Europe.

In a joint letter, Angela Merkel and Nicolas Sarkozy demanded a euro rulebook aimed at establishing a "fiscal union" among the 17 eurozone countries, whose leaders would hold monthly summits during the crisis and install a permanent president of the eurogroup as well as a ministerial structure to run the body.

The British prime minister, who faced a call from the rightwinger Andrew Rosindell to show "some bulldog spirit in Brussels", told MPs that he would be seeking safeguards for the City of London.

Accusing Brussels of "continued regulatory" attacks on the City, he said: "I think there'll be an opportunity, particularly if there is a treaty at 27 [the summit meeting of all EU members], to ensure there are some safeguards – not just for the industry, but to give us greater power and control in terms of regulation here in the Commons. I think that that is in the interests of the entire country, and it is something that I will be fighting for on Friday."

But Cameron, who was challenged on Europe by successive Tory MPs, indicated his first concern was to help stabilise the eurozone. "The British national interest absolutely means we need to help resolve this crisis in the eurozone. It's freezing the British economy, just as it's freezing economies across Europe."

Downing Street declined to be drawn on what the prime minister would be tabling at the summit. Sources said Cameron would have to "calibrate" his demands because the negotiations could go one of three ways:

• A revision of the Lisbon treaty agreed by all 27 EU leaders. This is Angela Merkel's preferred route because it would guarantee that the institutions of the EU – the European commission and the European court of justice – could enforce the fiscal sanctions on the 17 eurozone members. This is also Cameron's preferred route because it would hand Britain a clear veto. The prime minister would demand safeguards for the City, which is subject to EU regulation decided by the system of qualified majority voting in which Britain has no veto. Cameron could demand an "emergency brake" which would allow Britain to stop a measure and refer it up to the European council – the meeting of the EU's 27 leaders.

• A treaty agreed among the 17 eurozone states only, in which the institutions of the EU enforce sanctions. Britain would have less leverage in such negotiations, but sources believe it would still have to be consulted, because all 27 EU members would have to agree to allow the institutions to play a role. Cameron is prepared to allow the talks to proceed on this basis if he fails to win concessions in a wider treaty negotiation.

• A treaty among the 17 eurozone members without the EU institutions. This is unacceptable to France and Germany, although Britain is highlighting this possibility to show what could happen if Cameron's demands are ignored.

I watched PMQs yesterday and I think every Tory MP asked about Europe and there was almost no cheering from the backbenches as Cameron was answering.

It all looks very organised too.  Boris said there should be a referendum and said the EU looks like it's about to 'save the cancer not the patient'.  Apparently 5 Tory Cabinet Ministers went to tell Cameron to toughen up last night.  And the presence of IDS (now welfare minister) who has form leading the Maastricht rebels must be worrying.

[CountDeMoney]

I prefer to read articles with every other sentence in bold, please.

[The Minsky Moment]

This why the Tories are unfit for government.
If the Eurozone cannot contain its crisis, the contagion will spread, and the first to be hit will be the City of London.
The Brit banks are still limping from the last crisis; they will not survive a collapse of key eurozone counterparties.  The UK is on the precipice and their only hope of avoiding a bad fall is if Merkel, Sarkozy and Co pull off their magic act.

[Barrister]

This why the Tories are unfit for government.
If the Eurozone cannot contain its crisis, the contagion will spread, and the first to be hit will be the City of London.
The Brit banks are still limping from the last crisis; they will not survive a collapse of key eurozone counterparties.  The UK is on the precipice and their only hope of avoiding a bad fall is if Merkel, Sarkozy and Co pull off their magic act.

It is not clear what the proposed changes are.  If the changes are only going to affect the Eurozone countries then it seems exceedingly churlish to use this as an opportunity to squeeze concessions out of the EU.  Britain should just get out of the way and let the Euro countries do what they need to do.

However, if these changes involve a fiscal union of the entire EU, or changes to financial regulation of the entire EU, that clearly involves the UK and the Tories are in the right to say "hey wait just one minute...".

[The Minsky Moment]

The point of the referendum demand is the blow the whole thing up - is there any doubt the same euroskeptic Tories now braying for the referendum would push for a No vote if it actually happened, regardless of the contours of the deal?

[Sheilbh]

The Tory view is that even though this only really covers the EZ it represents a golden opportunity to renegotiate Britain's membership, or repatriate powers.  After all, they think, that is what they've promised the electorate (and the Tory base care about Europe a lot) and the EU probably needs some British support for treaty change.

The real question is how many would rebel and demand a referendum (a month ago about one half of the Tories rebelled on Europe) and if they'd be willing to bring down the government over this.

The presence of cabinet level dissent is worrying on both counts.

[Iormlund]

It is not clear what the proposed changes are.  If the changes are only going to affect the Eurozone countries then it seems exceedingly churlish to use this as an opportunity to squeeze concessions out of the EU.  Britain should just get out of the way and let the Euro countries do what they need to do.

However, if these changes involve a fiscal union of the entire EU, or changes to financial regulation of the entire EU, that clearly involves the UK and the Tories are in the right to say "hey wait just one minute...".

Re-read Patterson's quote. He is explicitly asking Cameron to obstruct further EZ integration.

[mongers]

This why the Tories are unfit for government.
If the Eurozone cannot contain its crisis, the contagion will spread, and the first to be hit will be the City of London.
The Brit banks are still limping from the last crisis; they will not survive a collapse of key eurozone counterparties.  The UK is on the precipice and their only hope of avoiding a bad fall is if Merkel, Sarkozy and Co pull off their magic act.

This.


It beggars belief that one wing of the Tory party seems to be actively maneuvering to help bring about the collapse of the Euro.

[MadImmortalMan]

Maybe they went short EUR/USD.


Makes me wonder what Soros is betting on about now. Too bad he took his trading behind the curtain.

[Zanza]

At least we Germans will have a scapegoat then. 

[Martinus]

I don't think we need the UK in the EU. I mean it's not like it's a mecca for job seekers anymore. And I will enjoy seeing all British expats in Poland being kicked out unless they get a visa. 

[Malthus]

At least we Germans will have a scapegoat then. 

[  ] And lord knows, there is nothing Germans like better ...  [/  ]

[grumbler]

I don't think we need the UK in the EU. I mean it's not like it's a mecca for job seekers anymore. And I will enjoy seeing all British expats in Poland being kicked out unless they get a visa.   

Agree.  The beggar-countries like Poland and Hungary really shouldn't have the British teat to suck on.  I'd enjoy seeing all the Polack "professionals" cleaning toilets after the Brits pull out, followed by the Germans, French, and the non-Euro states.

The EU ate too greedily, and swallowed some turds by mistake.  Time to fix that mistake. 

[Richard Hakluyt]

It beggars belief that one wing of the Tory party seems to be actively maneuvering to help bring about the collapse of the Euro.

Perhaps.

It also beggars belief that a currency for 350m Europeans was designed so badly that the opinions and maneuverings of the xenophobic wing of the Tory party has any relevance 

[Jacob]

It also beggars belief that a currency for 350m Europeans was designed so badly that the opinions and maneuverings of the xenophobic wing of the Tory party has any relevance 

Well, it's not like something like that had been attempted previously.