Does EU deal mean isolation or independence for UK?


BRUSSELS: Journalists like to put forward stark alternatives, while diplomats, particularly in this town, usually insist there is third way - a negotiated solution.

But as the leaders pack up this summit it is hard to avoid the conclusion that these months of crisis over the euro have finally exposed a division between the UK and the others that will demand resolution.

So will Britain have to join the euro in order to regain some influence over the direction of the European Union, or will it have to bail out?

The idea of a two-speed Europe or even a multi-speed one is not exactly new. That after all was the consequence of some countries joining the euro and others not, or certain ones staying outside the Schengen borders' agreement. It is not just Britain that has asked for exceptions in the past - Denmark, Poland, and Ireland to name but three have also had their moments.

So why can't Britain carry on being a member of the wider club, but stand clear of the "fiscal compact" of measures agreed overnight to strengthen the euro?

The 17 Eurozone countries backed it; six of the 10 countries outside did too. Of the remaining four, three (Sweden, Hungary and the Czech Republic) say they will refer it to their parliaments. Only the UK then is explicitly opposed to it.

Fredrik Reinfeldt, the Swedish prime minister drew a deeper point from this in interview he just gave us. He argued out that nine of the 10 non-eurozone countries accept the idea of joining the single currency at some future point, which is why they did not oppose the Franco-German proposals. Britain is truly in a category of one in this respect.

This begs many questions, among them: in the short term will Britain try to put other spanners in the works, for example by saying Europe's civil service, the Commission, should not supervise the new changes since they were not agreed unanimously?

Mr Cameron has already hinted at such an approach. With some nations tottering on the brink of bankruptcy, British delaying action of this kind would make it even more unpopular among EU members than it already is.

In the longer term, as the EU moves towards an extension of its system of decision making by majority in 2014, the UK could find itself being subject to changes agreed by the core membership of the eurozone even if it disagreed with them.

This worries many in the City of London deeply. So the key longer term issue is how can the UK protect its interests, particularly in the financial industry, if it remains the one nation out of 27 that does not share the interests of the single currency?

There is a Europhile argument that Britain will soon see the folly of its ways, possibly under the pressure of market forces such as a run on Sterling, and realise it has no choice but to embrace the euro.

Of course there are Euro-sceptic ones too, that the implosion of the single currency will solve the dilemma, or that it will become increasingly apparent that the City can make more money if the country leaves the EU altogether.

Both those who have urged further integration and those who are most hostile to it have put forward a referendum. The Liberal Democrats made such a test of public opinion a pledge in their last election manifesto, and Nigel Farrage of the UK Independence Party has been touring the Brussels press centre today, making the most of this moment, urging a vote in continued membership of the EU ASAP.

Increasingly the debate may be framed then in terms of whether to have such a poll.

Of course there will be many ways to buy time or reassert British influence. After today though, it is hard to see the country being able to dodge the question in the longer term of whether it wants in to the euro or out of the EU.

An alliance after all is a group of countries that share common views on fundamental questions, and Britain's current position, that it wants the currency to succeed but not to join in, has placed it in a minority of one.

Mark Urban, Diplomatic and defence editor, Newsnight Article written by Mark Urban Mark Urban Diplomatic and defence editor, BBC Newsnight

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  • rate this

    Comment number 1.

    Have a referendum...once and for all!

    Both sides should welcome it.

    By the way... it will be a massive NO vote ;-)

  • rate this

    Comment number 2.

    Assuming the Euro survives then yes, Britain needs to have a referendum and leave the EU - that will surely be the result. Britain has never really fit in the EU and I actually think the relationship with Europe would improve after an amicable divorce. Better than staying in an unworkable marriage.

  • rate this

    Comment number 3.

    Add your comment...This disaster will be allowed to happen because everyone in Europe is terrified that their part in the imperialist lunacy which is "The Greater European Union" (and degree of collusion with some very powerful American financial, political and industrial vested interests in "The NATO Agenda"), will come under public scrutiny.

  • rate this

    Comment number 4.

    First time I've looked in since the election I think. Excellent programme. Stephanie Flanders and Paul Mason good value as always, as was Mark Urban. I'll follow developments on NN for a while.

  • rate this

    Comment number 5.

    Yep, full exposure - division between UK & others in EZ.
    Britain can't have her cake & eat it too. Why would EZ give meaningful input to Britain when Britain has made it clear that it is special, has special needs/DEMANDS. It's not just Britain that has asked for exceptions - Denmark, Poland, & Ireland to name but 3 have also had their moments, but all 3 are now fully into EZ compact.


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