"London is the centre of financial services in Europe. It's under constant attack through Brussels directives. It's an area of concern, it's a key national interest that we need to defend."
Prime Minister David Cameron, 29 October, 2011
Prime Minister David Cameron, 29 October, 2011
The 26 October, 2011 Euro Summit Statement and the decision by the seventeen Eurozone countries to move towards ever deeper economic and fiscal integration will make Britain and the British people third or fourth class European citizens, after the likes of Belgium and Luxembourg. For the world’s fifth or sixth largest economy and Europe’s strongest military power Britain’s status in the EU was changed overnight from being one of the Big Three in an essentially inter-governmental structure, to being shut out of a German-led integrated system. To force the British people to go on paying for something with which the overwhelming majority of them do not agree with and for which they gain little or no benefit would be to subject a proud, old country to humiliation. That is not going to happen.
Figures supplied by Britain’s Office for National Statistics capture the extent of the unfairness to which Britain is now subject by its European partners. Britain is the second largest net contributor after Germany having injected some €10.5 billion in the EU in 2010. Britain’s gross contribution is also second to that of Germany at €22.4 billion, having leaped 74% since 2009. Some warn that Britain’s trade with Europe could be damaged if Britain left the EU, with some 40% of exports going to the EU. In fact, in 2010 Britain ran an enormous trade deficit with the EU of €53.1 billion, compared with a trade surplus of €11.7 billion with the rest of the world. The average British household now pays around three hundred euros per year to the EU, which for many is close to the monthly cost of keeping a roof over their head.
The Eurozone breakout of 26 October was thus more than a technical decision to save the Euro. It saw the beginning of a fundamental shift of power inside the EU in favour of Germany and the European Commission. This power shift is manifested by French and German-inspired attacks on the City of London by the European Commission, Britain most important strategic economic asset. Berlin and Paris are moving to strengthen both Frankfurt and Paris as financial centres at London’s expense. Prime Minister David Cameron warned on 29 October, 2011 that the City of London is under constant attack from EU. He described Britain’s finance industry as a “key national interest”, and warned that the single market must be kept open to non-Eurozone members.
Cameron went on, “Sometimes it’s necessary to have regulation but the regulation is badly drafted, badly formed and it doesn’t necessarily reflect what large financial centres like London need. And, of course, all countries in Europe pursue their national interests. Would the French and Germans like a larger share of financial services in Paris and Frankfurt? Of course they would. I want to make sure we keep them in London”.
Specifically, Cameron is deeply concerned about proposals from the European Commission which are supported by France and Germany which would impose a tax on all financial transactions in the EU to help fund the way out of the Eurozone crisis. Not only would this hinder London’s ability to compete with other global financial markets such as New York, Singapore, Hong Kong, Shanghai and Tokyo but it would effectively mean that the British were contributing 80% to tax to cover debt in a Eurozone of which they are not a member.
The power shift implicit in the Statement is truly historic and historians will come to see it thus. Germany is about to win the 140 year systemic struggle for the domination of Europe. Given Berlin is the big winner the Germans should perhaps not complain too loudly about the price for solving the crisis as the Euro has done so much for so long to fuel Germany’s export-led growth. The single currency has in effect acted as a customs union built around Germany thus offsetting the high costs of German production.
Equally, London also has responsibility for the position in which it finds itself. Ever since joining what was then the European Economic Community (EEC) back in 1973 London sold ‘Europe’ to its people as a free-trade zone and nothing more. Indeed, Britain has been trying to hold back the development of a more political and social Europe ever since. In ever more desperate attempts to reconcile what was promised to the British people with the political moves in Europe towards deeper integration London has sought opt-outs, which has simply removed Britain ever further from decision-making in Europe. ‘Brussels’ is now an utterly hated word across much of Britain and unfairly so. Ironically, the most important opt-out was the decision not to join the Euro for the simple fact that Britain was right about the inherent contradictions in the structure of the currency driven as it was by political ambition rather than sound economic fundamentals.
So, where can the British go? In fact Britain remains one of the world’s most advanced economies and by dint of being outside the Euro has better prepared itself for the globalised market than any of the Eurozone countries. Indeed, the Eurozone crisis is the world’s first globalisation crisis of the developed world caused precisely because the Eurozone tried and failed to seal itself off from the consequences of globalisation. It is no coincidence that David Cameron spent the period immediately after the Eurozone summit in Australia with the leaders of the Commonwealth amongst the fifty-three members of which are some of the world’s up and coming economies, most notably India.
And then of course there is the Anglosphere. Ten years of bruising engagements by the British military in Iraq and Afghanistan has seen some eight hundred British soldiers killed and some three thousand badly wounded. It has also demonstrated to the British that when it comes to real danger for all the talk of European defence London can expect little solidarity from its European partners. Family are the only ones that can be trusted; America, Australia, Canada amongst others. The British have done too much of the dying for Europe these ten years past. Libya? Too little, too late and it is seen by many in London merely as a vehicle for re-election seeking President Sarkozy to grandstand. There may even be benefits for both sides as a Europe without Britain can finally get on and do what it pretends it has always wanted, but which it also pretends the British have always frustrated, not least a common defence policy.
No Taxation Without Representation was first used in the run up to the American Revolution against Britain by Reverend Jonathan Mayhew in 1750 Boston. James Otis then said that "taxation without representation is tyranny”. What was right in 1750 remains just as right in 2011.
The day will now come when Britain leaves the EU and it will be perhaps the saddest day of my life.
Julian Lindley-French
