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

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  • rate this
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    Comment number 15.

    I am a British born Canadian. I am immensely disappointed with Cameron's action in refusing to work with the other countries in the Euro zone. I assume that Cameron's wish to 'protect the financial industry' in the UK means that he is not willing to take the once in a lifetime opportunity to set financial rules that will prevent the financial industry from going into a meltdown again as it did.

  • rate this
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    Comment number 14.

    Europhiles -no choice but to embrace the euro.
    Euro-sceptic - implosion of Euro will solve the dilemma, or Britain should get out altogether.
    Both should do the democratic thing: a referendum.
    Reasserting British influence will not happen if the decision is not clear - in or out ALTOGETHER, TOTALLY - nothing mid-way.

  • rate this
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    Comment number 13.

    UK will find itself subject to changes, with which it disagrees. This was "the" moment for Britain declare in or out; it declared out. This should worry City of London deeply - huge investment banks excluded (perhaps) from key decisions. How to protect British interests, particularly in financial industry? I think it's time to stop trying to protect bankers at a cost to all other British People.

  • rate this
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    Comment number 12.

    Only Britain raw determination - veto. Fredrik Reinfeldt, Swedish PM, argued 9/10 non-eurozone countries intend to join single currency in future, which demonstrates confidence in Euro & explains why they did not oppose proposals. Britain stands alone. Britain will try other spanners; Cameron has already hinted at approach. Somewhat defeatist I think, delaying & childish.

  • rate this
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    Comment number 11.

    It's not just Britain that asked for exceptions - Denmark, Poland, & Ireland had their moments, but at this critical juncture, when the EZ was making pivotal fiscal moves, 26 of 27 countries were on board. What do these 26 countries see to which Britain is blind, & what is blinding Britain - London, external pressures across the Atlantic, arrogance?

  • rate this
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    Comment number 10.

    EU deal means isolation for UK? There is no negotiable solution for a veto. There has always been a division between UK & other EU countries, which I believed was caused by
    1. ties too close to US &
    2. just plain arrogance on the part of UK.
    I feel Britain has placed itself in the position of fully joining the EZ, including Euro, because EZ cannot afford marathon foot-dragging.

  • rate this
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    Comment number 9.

    A referendum will come, but right now it's probably a step too far for the Lib Dems and would break up the coalition - something neither Cameron nor Clegg wants. That's okay in the short term. The EZ is still in flux and this latest summit has raised more questions than it's answered, so a 'wait and see' approach may be the best for now.

  • rate this
    0

    Comment number 8.

    Why doesn't Britain just leave the EZ altogether? It's a financial hub. It doesn't even have to ring-fence till 2019.
    The answer may be a well-worded referendum. Let the people decide. That's the democratic thing to do.

  • rate this
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    Comment number 7.

    UK could find itself being subject to changes agreed by core membership, even if it disagreed with them. This worries many in the City of London deeply - the financial establishment, banks too big to fail. So how can the UK protect its interests, particularly in the financial industry, if it remains 1 of 27? Now this is a good question, one surely thought through by Cameron...or the banks?

  • rate this
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    Comment number 6.

    So why can't Britain carry on being a member of wider club, but stand clear of the "fiscal compact"? Because Britain will slow progress, bring up extraneous issues, & generally waste time.
    26 countries in, 1 country out - only UK explicitly opposed.
    In the short term will Britain try to put other "spanners" in the works. Cameron has already hinted at such an approach.

  • rate this
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    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.

  • rate this
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    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
    -1

    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
    -1

    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
    -1

    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 ;-)

 

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