Yes Minister on British Diplomacy

Humpy knows best.

It’s been a couple weeks since UK Prime Minister David Cameron rejected the call for a new EU “fiscal compact.” Cameron’s essential beef was that he didn’t want to subject British institutions to the kind of fiscal oversight from Brussels which the compact seeks to strengthen. Cameron’s cake and eat it too stance here is that on the one hand it’s good for Britain if the eurozone addresses its problems, as London benefits from being Europe’s largest financial hub; yet on the other hand, Cameron doesn’t want to play by rules made outside the country.

I don’t think it says a lot about European unity if one member state can decide on its own to either regard or disregard EU policies. This means that the “union” of the European Union has only nominal reference. This also means that a better way to think about the EU is as an intergovernmental organization, not a political unity. Now this is fine, if that’s what you want. Britain clearly only wants to be a part of the single market aspect of European integration, it doesn’t want anything to do with the currency union or the Schengen border agreement. But opting out of two of the three main parts of the project of European integration means, basically, that the UK doesn’t want to integrate with the continent.

As noted before, this most recent opt-out may not have been an unintelligent move. There are many problems with the compact including its lack of a call for euro-bonds and its potential to cause more pro-cyclical shocks to already reeling regional economies. Here’s what The Economist has to say:

The package dwells too much on austerity, and too little on growth. That risks aggravating the deep Europe-wide recession threatening next year, which could prompt a downgrade of the entire zone’s credit ratings and cause economies to miss their deficit targets—triggering still more austerity.

What’s more, Britain has a history of getting hammered after tying itself to European monetary institutions – both with the “snake” in the ’70s and with the exchange-rate-mechanism in the ’90s. So its caution is understandable.

But for the currency union to survive, a central fiscal authority with oversight power has to emerge. Transfer payments have to circulate and states have to agree to give up some of their budgetary independence. Britain’s move makes it very clear that it will not play this game. Of course, it isn’t a member of EMU so an argument can be made that it has every right to act independently w/r/t fiscal and monetary policy. But this doesn’t bode well for the larger European project.  While Britain likes goods, services and capital moving freely around all parts of Europe, it would rather not be subjected to the free movement of people or to any needling oversight from across the channel.

Whereas Germany and France increasingly see the future of the EU as a strong, centralized political entity, Britain has time only for a trade agreement.

Once again, Yes Minister sums up British foreign policy most clearly. The only difference this time around is that instead of turning Europe against itself, Britain’s tactlessness has seemingly turned the continent into a unified whole:

Sir Humphrey: Minister, Britain has had the same foreign policy objective for at least the last five hundred years: to create a disunited Europe. In that cause we have fought with the Dutch against the Spanish, with the Germans against the French, with the French and Italians against the Germans, and with the French against the Germans and Italians. Divide and rule, you see. Why should we change now, when it’s worked so well?

Hacker: That’s all ancient history, surely?

Sir Humphrey: Yes, and current policy. We had to break the whole thing [the EEC] up, so we had to get inside. We tried to break it up from the outside, but that wouldn’t work. Now that we’re inside we can make a complete pig’s breakfast of the whole thing: set the Germans against the French, the French against the Italians, the Italians against the Dutch. The Foreign Office is terribly pleased; it’s just like old times.

Hacker: But surely we’re all committed to the European ideal?

Sir Humphrey: [chuckles] Really, Minister.

Hacker: If not, why are we pushing for an increase in the membership?

Sir Humphrey: Well, for the same reason. It’s just like the United Nations, in fact; the more members it has, the more arguments it can stir up, the more futile and impotent it becomes.

Hacker: What appalling cynicism.

Sir Humphrey: Yes… We call it diplomacy, Minister.

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