NOT VERY WELL AND ALL ALONE: THE UK AND THE EU: Irreversible Decline and Deepening Crisis

The Europhobic wing of the parliamentary Tory party, which these days encompasses almost all their back benchers and some members of the cabinet, is in full-throated battle mode against the EU. At the time of writing (8 December) David Cameron is due to arrive in Brussels for yet another crisis summit. He does so with their demands that he “stand firm for British interests” ringing in his ears. They insist that any proposal to revise the Lisbon treaty must be put to a referendum in Britain. As treaty revision is precisely what the German and French governments have in mind as a means to pushing through a tighter fiscal union within the Eurozone, this puts Cameron in a tight spot. Earlier this year the coalition government signed up to the European Union Act according to which a referendum could only be called in the event that important UK powers were to be transferred to the EU. A revision of the Lisbon treaty which only affected the countries of the Eurozone would not be sufficient to trigger a referendum in Britain and if Cameron were to attempt to play that card in Brussels, he would get short shrift from Merkel and Sarkozy – and probably from everyone else. Likewise with the demand that certain powers be repatriated from Brussels to Westminster, Cameron is unlikely to get very far. Tory MPs want to tear up those more progressive EU employment laws protecting workers’ rights and conditions of work. In the name of “defending British industry” from interference by Brussels, Cameron has pledged to safeguard the independence of the City of London. “The City” refers to the “financial services industry”, the big international banks and finance houses that have over the past twenty five years or so found London to be a safe haven of “light touch” regulation. Since the destruction of what was left of Britain’s manufacturing base in the 1980s, this is the only “industry” that is thriving in the UK. Safeguarding the independence of the City of London means resisting any attempt (a) to impose a financial transaction (Tobin) tax and (b) to separate investment from retail banking. Both these measures, were they to be adopted, would go some way to reining in an “industry” that a few years ago brought the whole economy to the brink of catastrophe, but has subsequently reverted to “business as usual”.

Although the right-wing Europhobes are mostly motivated by narrow English nationalism, they tap into a wider mood of resentment against what is reasonably perceived as bureaucratic disdain for democracy in the halls of EU power. This has been most evident in the peremptory way that elected governments in Greece and Italy have been sidelined and their leaders replaced by “technocrats” when it was felt they were insufficiently compliant, or incapable of implementing the austerity programmes dictated as quid pro quo for retaining them within the Eurozone. In countries of somewhat lax fiscal probity such as Greece and Italy, popular resentment has been less against the EU as such than against the stronger northern European states, particularly Germany. This has become especially inflamed in Greece where memories of a brutal Nazi occupation are deeply ingrained. In Germany itself, the folk-memory of the great inflation of 1923 has haunted successive generations, brought up on the belief that it led inevitably to Hitler and the Second World War. Germans have been only too happy to exchange the discipline of the drill square imposed between 1933 and 1945 for a democratized protestant work ethic that they feel, with some justification, has enabled them to become the productive power house of Europe. The darker side of this, though, may be seen in a growing resentment and impatience against those whose perceived fecklessness and dishonesty at the Germans’ expense now seem to put at risk their hard won prosperity. The sense of superiority this has engendered has led to revived concerns about a new German bid to dominate Europe. While such concerns may be exaggerated or groundless, the erosion of democratic procedures in the EU cannot be so easily ignored. Resentment at this is evident in the fierce defense of national identity in the Greek anti-austerity protests. Anger and resistance are likely to spread elsewhere as national parliaments are sidelined and austerity measures intensified.
December 10. The two days that have elapsed since the preceding paragraphs were written have served to render them no more than a preface to the main story.
There is a famous cartoon by David Low which appeared in the Evening Standard on June 18 1940. It depicts a lone British Tommy standing, fist raised and defiant, on the storm-swept channel coast facing darkening clouds from the European continent and approaching Luftwaffe bombers. It carries the caption “VERY WELL, ALONE”. The cartoon appeared just a month after Churchill had replaced Chamberlain as prime minister and ten days after the evacuation from Dunkirk. A week later France capitulated to the Germans and the whole of western Europe lay under the Nazi jackboot. Britain stood alone.
This is the spirit that the Europhobic Tory press and the triumphant gaggle of Tory backbenchers now invoke following David Cameron’s return from Brussels. They seek to present his cheap and specious claim to have defended Britain’s vital interests by vetoing the EU-wide treaty intended to prevent the collapse of the euro, as an act of Churchillian grit and courage in the face of overwhelming adversity. But this is definitely not Britain’s finest hour. In fact it is more like the shabbiest act by a British prime minister in living memory. While still in opposition, Cameron de-coupled the Tory party from the centre-right grouping of EU conservatives, to join up with the most right-wing ultra-nationalists in Eastern Europe. This was to reinforce his Eurosceptic credentials with his own backbenchers. Far from recalling Churchill in 1940, Cameron’s trumpeted defense of Britain’s vital interests is reminiscent of Chamberlain’s return from Munich in 1938, claiming that he had defended Britain’s interests by securing “peace in our time”. He also received a rapturous reception in the House of Commons from an adoring Tory party. But, just as then, the euphoria will not last long once the dust has settled.
The likelihood now is that Cameron will have isolated Britain from the rest of the EU, not just the 17 members of the Eurozone but also the nine that remain outside. They have refused to follow him in vetoing the proposed revision of the Lisbon treaty and seem likely to sign up to whatever procedures may now follow to consolidate tighter fiscal union amongst the seventeen. To have used the veto to protect the City of London from a financial transaction tax in the name of defending Britain’s vital interests, hardly accords with the coalition government’s supposed commitment to tighter regulation of banks. It will be interesting to see whether the Lib. Dems in the cabinet will insist that the government accepts the report by the Independent Commission on Banking recommending that high street banks be ringfenced from investment banks. But it is doubtful whether Cameron’s action to “protect the City” will succeed. The Association of British Insurers, which lobbied hard against a financial transaction tax, believes that the British veto might not prevent the passage of EU legislation that could still “damage the financial services industry in Britain.” 
Cameron went to Brussels determined to veto the proposed treaty revision come what may. He knew that to have acceded to it would have meant a full-scale backbench revolt which would have made it virtually impossible to resist the demand for a referendum. This would have torn the coalition apart. But whatever satisfaction he may draw from the cheers of his Europhobic supporters is likely to be short-lived. The Europhobes hope and expect that this is the first act in a drama that will end with Britain’s withdrawal from the European Union. They also think (and hope) that the present crisis in the EU will end with the collapse of the euro and the break-up of the union. Such an outcome can no longer be dismissed as fanciful. But to imagine that having jumped ship the UK can stand by and watch the European enterprise sink beneath the waves (or to use Tory grandee Michael Heseltine’s metaphor, to imagine that the UK can drift off into the Atlantic) is naïve in the extreme. If the EU breaks up, the UK, whether inside or out, will be irreparably damaged. Notwithstanding the delusions of the little Englander Europhobes, the whole of Europe, including the UK, is sliding into a deep recession. The ruling classes of Europe will, as always, seek to resolve their crisis at the expense of the working people who were not responsible for causing it.
There is little to indicate that the measures contemplated by the EU leaders are likely to be any more effective in dealing with the crisis than those already undertaken. The present disputes reflect conflicts of interest between the ruling classes of the strongest European powers. Germany has the most powerful economy in Europe and as the dominant force in the EU is determined to impose fiscal discipline on its recalcitrant southern subordinates. But the Germans are determined to resist allowing the European Central bank to be used to prop up defaulting and potentially defaulting countries of the “southern periphery”. So far, there is no indication of how, short of allowing the ECB to undertake “quantitative easing” (printing money) on a large scale (which would be in the teeth of German opposition) the European Financial Stability Fund will be able to accumulate the 2 – 3 trillion euros said to be necessary to meet such eventualities. Given that there seems to be no workable solution in sight, all the “crisis summits” appear to be doomed to failure. So, the collapse of the eurozone , and possibly the EU itself, cannot be ruled out.
Whatever happens in coming weeks and months, one thing is certain: the 1% will continue to try to shift the burden of their crisis onto the 99%. Whether they succeed will depend upon how effectively resistance develops. Every effort must be made, everywhere, to ensure that it does.