UK politics. World events. Bureaucrat released.

Saturday, 9 April 2011

New Europe, old debates

This week, Portugal finally gave in. After nearly a year of speculation, Prime Minister José Socrates followed Greece and Ireland and requested a whopping EU bailout of £60bn.

Nick Clegg’s election campaign warned of “Greek style unrest” if the UK cut public services too hard. George Osborne this week turned that argument around. Britain will avoid the fate of Greece, Ireland and Portugal because “difficult decisions” have been taken to build “credibility and stability” in the UK economy.

But Portugal’s plight sparks more worry about the coalition’s European policy than it does its economic policy. The Treasury confirmed that Britain may have to contribute £4bn – of, incidentally, borrowed money – to bail out Portugal.

Conservatives are up in arms, claiming that Alistair Darling made Britain liable for eurozone debt at a summit held in the post-election stalemate, as Cameron and Clegg were thrashing out their coalition deal.

That Darling was to blame is, however, in dispute. Darling claims that he consulted Osborne who supported the decision to make Britain liable. Tory Freedom of Information requests for accounts of the discussions between the Chancellors have been stalled.

The information need to be released. This Tory-led government is holier than thou on transparency when it suits them, the former FOI bashers claiming this to be one of the most open administrations ever. Well, trasparency can't be selective: release the information when it's uncomfortable too.

At talks with Angela Merkel in May, the new Prime Minister decided to withdraw the UK from eurozone discussions on crucial issues like bailouts. The result? The UK remains liable to stump up cash for a bail out, but is shut out from the talks that decide the conditions and shape of any bail out.

Sounds familiar? The story of the UK’s involvement in Europe has always been one of sticking our head in the sand and muddling “influence” and “sovereignty”. Once again, a Conservative led government has squandered our influence in order to protect the more illusory goal of “sovereignty” – imagining sovereignty simply something to be “won” or “lost”, not something that can be more effective or less effective depending on how you use it.

Tory MPs cheered David Cameron on his return from the European Council last week, as he repeated the mantra that the UK “is not in the euro, and never will join the euro”.

When will we learn that safeguarding our sovereignty with Europe is not just about saying “no” or shutting ourselves out of debates, as we have done on countless occasions? On the eurozone bailout, we once again find ourselves picking up the bill but not sitting at the same table as the other diners.

George Osborne made it to the EU bailout summit in the end, and returned claiming that the UK will not bail out Portugal.

All rather disingenuous. Of course we won't bailout Portugal bilaterally as we did with Ireland, our nearest neighbour and key trading partner. Osborne knows that the UK most certainly will contribute money to the bail out multilaterally through the European Union.

Of course we need to be careful about liability. The UK did not join the euro and it is right that eurozone countries should shoulder a heavier responsibility in coming to Portugal's rescue. But let's not pretend that we can also let Portugal, and the eurozone, to its fate - almost as some kind of "we told you so" badge of honour to vindicate a policy of non-entry to the euro.

It is entirely right that we help out countries who matter to us economically. And it is in the UK's national interest to see the eurozone succeed. 70% of our trade is with the eurozone. Just as we bailed out Ireland because we were inextricably linked with Ireland through trade, so it is in our interests to make a contribution to seeing the eurozone stabilise.

So let's not let our European policy get stuck in the dogma of the past. Too often, debate on Europe drifts into being "for" or "against". It's not that simple. On matters like the eurozone bailout, let's talk more about our shared interests than about our bottom lines.

With the eurozone, in the Prime Minister's words, we're all in this together. Like it or not.

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