So, Nick, how many laws come from Brussels?

In the first IN/OUT Europe debate between Nigel Farage and Nick Clegg on 26 March, the leader of the Liberal Democrats claimed that the percentage of UK laws coming from the EU was 7%, citing research by the House of Commons Library.

This created much debate at the time, particularly as Nigel Farage claimed that figure was actually 75%, quoting the long-standing UKIP supporter Viviane Reding.

We are no stranger to this debate having written a number of times about the futility of estimating the proportion of EU laws implemented in the UK, and the differing claims. However we were surprised to discover that Nick Clegg himself is no stranger to this debate. Here he is writing in 2003:

Probably half of all new legislation now enacted in the UK begins in Brussels. The European parliament has extensive powers to amend or strike down laws in almost every conceivable area of public life.

And in case that was an accidental slip of the keyboard, here he is again speaking in 2004:

Well over 50 per cent of all new laws in the UK now emanate from Brussels and are processed by Parliament and that MEPs are now arguably some of the most powerful legislators in Europe.

That people - usually depending on ideological disposition - give wildly conflicting estimates about the share of EU laws is old news. Radically conflicting estimates from the same person is something new, however.

Behind the rhetoric is Clegg preparing the ground for accepting an EU referendum?

 

Nick Clegg in a speech today sheds some light on his party's Europe policy and more specifically on his thoughts on an in/out referendum. He says:

We are no longer asking if Britain will have a referendum on continued membership, we are asking when Britain will have a referendum on continued membership.

 

The parties differ on the timing. The Conservative party want one in 2017, regardless of what’s happening in Europe at that time: it’s a date chosen for internal party management as much as anything else. The Liberal Democrats believe it will be far better to have the referendum when a serious change to Europe’s rules, affecting the UK, next arises. But we all agree that it will happen at some point or another...

If you want to know my position, it's very simple: yes to staying in Europe; yes to reforming the EU and improving our relationship with it; yes to a referendum when the time is right.

On the face of it that is not a change. The Liberal Democrats have in the past promised in/out referendums on the EU to be held at the next treaty change. Cynics would point out that when the last major Treaty change came, on the Lisbon Treaty, the Liberal Democrats were less than enthusiastic on having a referendum. But, the wording here looks like a change in emphasis, opening up the possibility of future support - in turn perhaps also opening up for another coalition with the Tories.

What else is new? Nick Clegg has also made some welcome moves in other areas. For a former MEP and supporter of the Lisbon treaty's transfer of powers to the European Parliament he is refreshingly honest about the need to reinforce the powers of national parliaments in the EU decision making process. He says:

I want to see a much more active role for national parliaments in scrutinising EU decisions and policing the principle of subsidiarity. We're still not fully exploiting the provisions made for this under the Lisbon Treaty.

Beyond this his speech has some of the normal party political aspects. For instance he accuses the Conservatives of wanting a "unilateral renegotiation of Britain’s relationship with the EU", when what most are suggesting are EU-wide solutions - but he does rather half heatedly admit that:

Of course a future British Government will be able to cobble together a package of reforms with Germany and other member states with likeminded views on European competitiveness and so on.

 Good, that is a start, so lets get on with it...

  

The coalition has missed a chance to debate the fundamental issue at the heart of cross-border crime and police co-operation

Our Research Director Stephen Booth has written a piece for the Guardian's Comment is Free section, where he argues:

The Home Secretary, Theresa May, has announced that the UK will opt out of 133 EU criminal justice measures, using a "block opt-out" negotiated by a previous Labour government. It will then seek to sign up again to some of them, including a "reformed" European arrest warrant (EAW).

As ever, the devil will be in the detail and we should reserve judgment on the government's reform proposals until we've had time to digest them. Nevertheless, there is much here to raise an eyebrow or two. For one, the coalition seems to have arrived at the number of measures it wants to sign up to (35) through a process of "split the difference" between Liberal Democrats who would rather the UK didn't exercise the opt-out at all and Conservatives who would be inclined to opt out of the lot, or only opt back into a handful. An arbitrary process such as this is hardly the model of principled policy-making.

No one seriously argues that the UK would be better off cutting itself off completely from international co-operation on crime and policing. However, there is a legitimate debate to be had about the institutional form it should take and how citizens' rights can best be safeguarded, especially given the current backdrop of transatlantic spying allegations. Governments and the powers that be will always be tempted to abuse their authority. The best antidote to this is democratic scrutiny and accountability.

The EU opt-out is not simply a decision about keeping 133 EU law and order measures. It is also about whether the European court of justice should have full jurisdiction over them for the first time – once the UK opts back in to these 35 measures, EU judges rather than UK judges will have the last word on how they are interpreted. This would have been an important debate, because amending EU law in the wake of an EU judgment that results in something our elected representatives did not intend is extremely difficult, as it can only be achieved through complex EU negotiations. Thus, the democratic link to citizens is broken. In the context of the UK's wider relationship with the EU, an opt-out could have provided the opportunity to debate this fundamental issue.

However, this opportunity has largely been wasted: the temptation to revert to type in any EU debate – be it pro or anti – is often easier than arguing about substance. There are few issues that galvanise Liberal Democrats like civil liberties. Lib Dem backbench home affairs spokesman Julian Huppert has argued that May's claim that "criminals, terrorists and paedophiles" would want MPs to vote against the UK data communications bill (or "snooper's charter") was misleading and the sign of "someone without a rational argument to make". However, in defending the EAW and other EU measures, Lib Dem politicians including Nick Clegg have used the spectre of "paedophiles, murderers and terrorists" to try to shut down the debate. In addition, the party's enthusiasm for keeping the EAW stands in stark contrast to its tough stance on the UK-US extradition treaty, particularly in the case of Gary McKinnon. This is despite the fact that, once the UK opts back in, the EAW is part of a permanent, supranational EU legal system and the UK-US treaty is a bilateral arrangement which, in theory, can be rejected by either party.

The Conservative side of the coalition has not covered itself in glory either. While it is clear that Conservatives are the driving force for taking the opt-out, there has not been a robust principled defence of this move by Conservative ministers, particularly on the role of the EU's court, and therefore, why the party's often cited robust stance on law and order at home could be compatible with exercising the block opt-out.

Poll after poll shows that the British public would like a looser relationship with the EU, including on crime and policing issues. My view is that the UK should return to a system of bilateral, practical crime and policing co-operation with EU partners, which does not involve ceding control to the EU institutions. Others may take a different view, but let's debate the issue.

EU Referendum: Now a question of when not if?

Today’s Commons debate on whether to hold an EU referendum in 2017 – brought forward by James Wharton MP through a so-called private members bill - was interesting as much for what was said as for what was not.

As expected, Conservative MPs came out in droves to proclaim their commitment to an in/out referendum if re-elected. Shadow Foreign Secretary Douglas Alexander criticised 2017 as “an arbitrary date”, although he yet again appeared not to categorically rule out an EU referendum under a Labour government. So that door is still left ajar. He also reiterated Labour’s commitment to EU reform, proving how entrenched this concept now is across the political spectrum.

Interventions during the debate showed that within the Labour Party there is now a spectrum of opinion on the EU referendum, although in fairness Labour and Lib Dem participation was limited (see picture). There are those against a referendum because of a long held attachment to the EU; those like Keith Vaz MP who want the UK to remain an EU member but also want a referendum to strengthen democratic legitimacy; and those, like Kate Hoey or Dennis Skinner who have long been opposed to the EU and want the UK to leave altogether. In addition, there are many on the Labour benches who see the entire issue as a valuable party-political stick with which to beat the Conservatives.

Labour has so far managed to avoid a divisive public debate on the issue but with the Conservatives – who now appear relatively united – having put them on the spot, a familiar question reappears: if polls are close leading up to the 2015 general election, will Labour gamble on being seen as the ‘pro-status quo anti-referendum party’ – or will it pull the trigger?

Clearly, there are powerful voices within the Labour party who are feeling increasingly worried about such a prospect. So what will the endgame look like? Several different scenarios are emerging:

Tory majority: If the Conservatives win the next election outright it is now inconceivable they would avoid a referendum.

Continuity of Tory-Lib Dem coalition: Lib Dems are unlikely to promise a referendum in 2017 so the question would then become whether David Cameron insists on a referendum as a the price for a renewal of the Coalition. Cameron has been less than clear on this point. He has said “if I am Prime Minister” there will be a referendum, but the official write up says “if a Conservative Government is elected in 2015, they would... hold an in-out referendum to let the British public decide.” Would Nick Clegg block it (assuming he is even still the leader then).

Tory minority government: With a more stable economy both the Tories and Lib Dems could decide not to formally renew the coalition, with the former instead ruling as a minority government. Depending on the exact parliamentary arithmetic, a Tory referendum in 2017 could gain sufficient support from Labour and Lib Dem rebels and Northern Irish MPs.

No Labour pledge followed by a Labour victory: Only chance for a referendum would be if the “referendum lock” is triggered as part of an EU treaty change that transfers powers from the UK to Brussels – Labour has pledged to keep the lock in place. Perhaps they can somehow elevate that into an In/out referendum, and get around the pickle they’re in that way (there’s talk about this in Labour circles).

No Labour pledge followed by a Lib-Lab coalition: As previous scenario – both Labour and Lib Dems are in favour of the referendum lock.

Labour pledge followed by Labour majority: Question would then be on what terms (a straight In/Out vote or something else) and when (immediately after the election or mid-term). 

Labour pledge followed by a Lib-Lab coalition: That would depend on the Lib Dems and whether Labour sees it as a deal breaker. It’s easier to Labour ditching the referendum pledge in coalition negotiations than the Tories. However, a Lib-Lab Coalition Government might end up with a referendum anyway due to cross-party backbench cooperation by Labour and Conservative MPs.

Labour throws back the ball in Tories’ court: As has been floated, Labour could seek to amend James Wharton’s bill, to suggest a referendum before 2017 – some have floated 2014, at the same time as the European elections. This would be extremely awkward for Tory MPs, many of whom would feel obliged to vote for such an amendment so as not to be seen as anti-referendum. The Tories are also vulnerable to criticism that 2014 is no less of an arbitrary date than is 2017 (are we confident that all the changes in Europe and in the UK-EU relationship will have taken place by 2017 so the British public would have the choice of two clear alternatives?)

Regardless, there was a feeling when listening to today’s debate that a referendum on Europe is now not a matter of if – but when. Disappointingly, the debate largely ducked a question just as fundamental as the referendum debate itself: whoever wins the next election will have a series of European challenges in its intray: a Europe that desperately needs reform, a changing Eurozone with bailout programs running out, a series of pending EU court cases, potential treaty changes and more.

These challenges transcend party politics.

EU referendum: So who's cup of tea will it be?

Nick Clegg: EU referendum a question of "when not if"

With David Cameron away in the US, Nick Clegg took to the dispatch box for Prime Minister’s Questions today. Unsurprisingly, there was no shortage of references to EU referendums, most of them of a hostile nature. Ahead of today’s debate on the ‘referendum amendment’ to the Queen’s Speech, Clegg was repeatedly asked why he would not support the calls for an in/out referendum as pledged in the infamous 2008 Lib Dem leaflet (calling for a “real” referendum on Lisbon) and in the party’s 2010 manifesto.

Clegg responded that this issue had been settled by the passing of the 2011 EU Act which contains a ‘referendum lock’ in the event of EU treaty change, and accused the Tories of “moving the goalposts” with their policy of an in/out referendum in 2017.

But, within this bit of rhetorical politicking, Clegg said something rather interesting. He said that, due to the 'referendum lock', it was a matter of "when, not if" there is an EU referendum "because the rules are bound to change" as a result of developments in the eurozone.

Clegg accuses Tories of moving goal posts on EU referendum BUT says matter of 'when not if' as EU rules bound to change triggering a vote
— Nick Robinson (@bbcnickrobinson) May 15, 2013

Well, if the rules are "bound to change" why aren't the Lib Dems actively supporting David Cameron's proposals to reform the UK's relationship with the EU - or at least putting forward their own vision - and then putting that to a referendum ? Or would the Lib Dems rather the rest of the EU changed the rules without active input from the UK Government? Good luck winning any kind of referendum on that basis Mr. Clegg.

MEPs around Europe defy their parties on EU budget

Earlier today we looked at how UK MEPs voted on the EU budget, pointing out that Lib Dems defied the national party line (earning them a telling-off from Nick Clegg). However, we thought it would also be interesting to round up how other national delegations voted, in particular those of member states whose leaders were most insistent on imposing budgetary discipline on the EU.

Germany: Angela Merkel was instrumental in forcing through the budget cut but both her own CDU MEPs and CSU MEPs voted to "reject it in its current form", siding with their EPP group. Likewise, MEPs from her junior coalition partner, the FDP also voted against the budget. At the national level, all three parties have been steadfast in their insistence on budgetary discipline in the eurozone.

Netherlands: Dutch PM Mark Rutte was another key ally for Cameron in pushing for a cut to the budget. However, his VVD MEPs followed the ALDE leadership in voting against the budget.

Sweden: The Swedish Moderaterna MEPs remained loyal to their Prime Minister and backed the deal but in doing so had to defy the EPP group.

Finland: Despite the Finnish government being one of the strongest supporters of the deal its MEPs from the ALDE and EPP groups managed to split both ways within their groups.

Poland: PM Donald Tusk's Civic Platform party backed him and supported the deal but in the process 'rebelled' from the EPP party line.

Are certain governments regretting having given the EP more powers via the Lisbon Treaty we wonder?

The Coalition's mid-term review on Europe: Bland and blander

Yesterday saw the publication of the Coalition's 'mid-term review', the aim of which was to "take stock of progress in implementing the Coalition agreement" and to set out the government's objectives for the remainder of its period of office.

The Europe section of the review was arguably the blandest part of what was a very bland document overall. So hardly exciting. The government highlighted the "referendum lock" on future treaty changes, disentangling the UK from the eurozone bailouts, and establishing the single European patent as its "achievements" (the first and third are genuine achievements). Like all UK governments in recent decades, it also stressed the need to remove the burden of unnecessary regulation and to secure a tough EU budget settlement.

As ever, the differences within the parties on Europe - though you wonder if they aren't sometimes more perceived than real -  mean that the Government seems unable to set out a 'grand vision'. As the Sun noted in its leader today, 'Europe' remains the "elephant in the room". To be fair, the Labour party, which has the luxury of the purity of opposition, has also failed to set out where, exactly, it wants the UK in Europe.

In other words: we're all still waiting for Cameron's EU speech...

The case for bringing back some powers from Brussels... by Nick Clegg

As we noted in our guest piece over on Lib Dem Voice last week, if the Coalition needs inspiration for what to put in its "half-time" report or ideas for what reforms to target in Europe, a good place to start would be  revisiting Nick Clegg's chapter in the Orange Book. As an MEP in 2004, he put forward some sensible and innovative ideas for EU reform, including the repatriation of certain powers.

For example:

General approach to EU powers:

“A liberal approach to the allocation of responsibilities to the EU should be founded on a rigorous application of the principles of subsidiarity and proportionality… the EU must only act if there is a clear cross-border issue at stake, or when collective EU action brings collective benefits to all member states that they would not be able to secure on their own… This would help correct the lopsided nature of the EU and so make it more logical and comprehensible to British voters.” 

On Agricultural policy and farm subsidies:

“It would be more logical for the EU to wield strong powers in the manner in which agricultural products are traded across Europe, especially to guarantee high quality and animal welfare standards, whilst leaving much of the system of production support to national governments themselves, subject to EU rules on subsidies and fair competition.” 

On regional policy and the structural funds:

“There is a danger that the system of EU regional subsidies has reached a point of such excessive complexity that the value added of collective EU funds is being undermined. The founding logic of the so-called EU structural funds remains compelling – that the richer parts of the EU should help provide resources to those parts in dire straits, especially in helping to cover high infrastructure investment costs. Yet, in practice, regional funds are still being channelled to all member states, even Britain, France and Germany who are the main contributors in the first place. Logically, those governments should take full responsibility for the channelling of funds to their own regions, rather than rely on the recycling of funds via the EU… That, in turn, would allow the EU structural funds to concentrate wholly on those countries where the economic need for financial assistance is overwhelming.” 

On EU involvement in social and employment law:

“While it is, of course, entirely understandable to support EU measures because of their beneficial effects – working time and parental leave legislation spring to mind – doing so in order to supplant the normal domestic policy making process risks undermining the basic tenets of democratic accountability. If the EU were to be used systematically as a means to bypass domestic political debate, voters will be even more perplexed about who is responsible for what… It disrupts the key relationship between voters and those elected to public office if domestic issues with no obvious EU dimension are arbitrarily shuffled off to Brussels for resolution. For these reasons, there is a compelling case to curtail the EU in its responsibility in the social policy sphere.” 

On the EU budget:

"The multitude of small and dispersed EU budget lines, in everything from youth programmes and tourism, should substantially be reduced. It is highly doubtful whether their marginal benefits justify the scarce personnel resources in the European Commission allocated to them".

It's hard to disagree, and indeed we have echoed many of these points our reports over the last 18 months, for example on employment law, structural funds, CAP, the EU budget and EU 'localism'.

Time to get to work? 

How could the Lib Dems respond to David Cameron's upcoming Europe speech?

Earlier today we posed a guest piece over on Lib Dem Voice, looking at how the party could respond constructively to David Cameron's upcoming and long awaited Europe speech, which we reprise below:

The Westminster village might still be in post-holiday slumber mode, but a significant political event is due to take place only in a couple of weeks – David Cameron’s long awaited, ‘tantric’ speech on Europe. While the exact details remain unclear, Cameron could well argue that the UK’s terms of EU membership require revision, and that this should include the repatriation of some powers, after which the new package will be put to a referendum. So how should the Liberal Democrats respond? 

It could be argued that there has already been a pre-emptive response from Nick Clegg, who in his own recent EU speech described the unilateral repatriation of powers as “a false promise wrapped in a Union Jack”. Instead, he argued for pragmatic EU co-operation focusing on three things in particular: a tough budget settlement, defending and deepening the single market, and maintaining co-operation in the area of crime and policing. 

Meritorious as these are – even if there is a lively debate to be had on what institutional form the latter should take – they do not add up to a holistic long-term vision of Britain’s place in an evolving Europe. For example, given the current squeeze on public finances, the coalition is right to push for a freeze in EU expenditure, but this comes across as a time-specific damage limitation exercise without a broader vision for slimming down and rationalising the budget. Likewise, Clegg said he supports reforming and refocusing the EU, but has offered few concrete details in this and other recent public pronouncements. 

A new model of UK-EU relations is not only desirable but inevitable given that closer economic and political integration in the eurozone will render the status-quo null and void. As such, renegotiation is less of a threat to the UK’s EU membership and more of an opportunity to save it by placing it on a more democratically legitimate footing. Polls frequently show that such an option attracts a majority of public support when included alongside the binary ‘in/out’ question. Last year, detailed polling found a majority of UK public opinion backed such a move, including Lib Dem voters. 

The danger for the party is that it engages in the debate in too vague terms, thereby risking being left flat-footed when rivals reveal specific proposals. For example, the Fresh Start group of Conservative MPs has been busy preparing a comprehensive and detailed analysis of each key area of EU policy, alongside their suggestions for reform. If Lib Dems do not agree with their vision, they should at least be able to present a counter-proposal. 

A good place to look for inspiration would be Nick Clegg’s chapter in the Orange Book, written when he was still an MEP in 2004, containing some sensible yet innovative ideas for EU reform. Among other things, he claimed that it was democratically desirable for the flow of competencies to be a two-way street, arguing that “A liberal approach to the allocation of responsibilities to the EU should be founded on a rigorous application of the principles of subsidiarity and proportionality… Liberal Democrats should push for the reallocation of certain existing powers – including much of agricultural, regional and social policy”. In convincing terms, he made the case for a more flexible EU, more responsive to the needs of member states and citizens.

It is this critical yet constructive approach towards the EU which has been lacking in recent Lib Dem public statements on Europe, indeed, with some degree of irony, it could be argued that the party’s thinking on the issue risks coming across as conservative, while the Tories push ahead with a transformative agenda. It’s true that the debate about Europe in this country too often is framed in terms of British exceptionalism, and the UK has a bit of an image problem on the continent, seen as “jumping from veto to veto.” But Britain isn't alone in facing existential choices in Europe. If the party backs reform but views ‘unilateral’ repatriation as unacceptable, it should set out a credible new institutional framework for all 27 member states and look for allies in Europe. One such ally could be the Dutch liberal VVD party, whose leader, Prime Minister Mark Rutte, recently argued that the Netherlands would welcome a debate over whether Europe is involved in too many areas which could be done at the national level. 

Either way, as the debate in the UK and Europe intensifies, the party needs to be in a position to communicate to voters what its long term vision for Britain’s future in Europe is.

Nick Clegg’s opposition to renegotiation could risk the UK’s EU membership

Following Nick Clegg's Europe speech at Chatham House yesterday, we argued on the Spectator's Coffee House blog,

Nick Clegg this morning fell into the usual ‘all or nothing’ fallacy on Europe. He said: ‘As soon as we start talking about repatriation, we descend into the in-versus-out debate.’ But the Deputy Prime Minister is wrong: the in/out debate is already underway, and rather than seek to defend the unpopular status quo, Nick Clegg should back renegotiation as the best option for those who wish to put the UK’s membership on a stable democratic footing.

But instead of attempting to address the causes for the EU’s unpopularity, the inflated budget, democracy deficit and bureaucracy etc. Nick Clegg sought to channel the debate into his own in/out debate where the problems of ‘out’ justify doing nothing about the problems of ‘in’.

Clegg said that UK can either be a full member of the EU or outside, like Norway and Switzerland. He is right that Norway as a member of the EEA does indeed implement a large proportion of EU law over which it has little influence and that Switzerland does not have full access for its services industries. He also pointed out that with no EU deal ‘firms who currently pay no import tariffs on the goods they send to the continent would be faced with taxes of up to 22 per cent’.  It is actually more like 10 per cent but the point is the same. However, protesting that no one is suggesting joining the EEA or not having a free trade deal with the EU is missing the point. Nick Clegg is presenting a false choice.

There is not one standard EU membership. The UK is not in the Schengen travel area, others are. The UK has a different deal on EU crime and police law than Denmark, which is fully opted out. There are neutral states and those involved in EU defence, there is the euro, the list goes on. But for Clegg there are only two types.

‘There’s the core: where the Eurozone countries are now pulling together more closely… Then there is the ring around that… And the outer circle… The UK is in the inner circle – but the terrain is shifting. The core is tightening – to what degree we don’t yet know.’

Clegg believes we should remain ‘a strong UK, influential in Europe’, but does not define what he wants to influence or convincingly explain why we should be in anything beyond the single market and some absolutely vital cross-border measures. Clegg’s reasoning:

‘What kind of club gives you a full pass, with all the perks, but doesn’t expect you to pay the full membership fee or abide by all the rules?’

This is an odd justification for the EU’s Common Agricultural Policy, Common Fisheries Policy, social and employment regulation, wasteful regional policy and unnecessary loss of democratic control. Are these accepted as some bizarre self-imposed flagellation for daring to desire free trade? If so, why not just accept a rise in the EU budget and get on with it? It’s the ‘subscription’ fee after all.

So what should the UK aim for? In a recent paper we set out that for now the UK benefits from being in the EU’s customs union and single market for good and services but that all other areas should be decided on a case by case basis. Is this pick -and-mix EU possible? Yes. The EU, as Clegg acknowledges, is changing. The eurozone is renegotiating its membership terms, and the treaties will need to be revisited sooner or later. This will present the UK with the opportunity to reform its membership terms and put it on a stable democratic foundation in line with public opinion.

UK government to Merkel: move to fiscal union or else...

Regular readers know what we think of the UK government's peculiar habit of lecturing the eurozone on the need to move to a full fiscal union (meaning eurozone governments completely running over their own electorates). Well, over the weekend, the Coalition moved from dropping hints to - it seems - issuing outright instructions.

Here's Nick Clegg in an interview with Der Spiegel (at least qualifying his remarks):

"You have to have something which creates a fiscal accompaniment to monetary union. Whilst I have a huge amount of sympathy with German taxpayers and German politicians who are reluctant, understandably because Germany is the paymaster of the European Union, to entertain these ideas, I fear that they are unavoidable. It is not sustainable to believe that the eurozone can thrive through fiscal discipline alone - it also has to, at some level, include an ability to either share debt or to deal with shocks in one part of the system or the other through fiscal transfers."

And here's George Osborne, writing in the Sunday Times,

"The eurozone needs to follow what I described a year ago as the 'remorseless logic' of monetary union towards greater fiscal integration and burden-sharing. I mentioned eurobonds as one possible mechanism, and there are others."

Meanwhile, David Cameron followed up last week's comments that the eurozone need to increase the bailout funds, move to"fiscal burden sharing" and the ECB starting to act as lender of last resort (quite a wish list), by saying that the forthcoming Greek elections have to become "a moment of clarity and decisiveness for the eurozone" noting that,

"We now have to send a very clear message to (the Greek) people - There is a choice, you can either vote to stay in the euro with all the commitments you have made, or, if you vote another way, you are effectively voting to leave."

To be fair, Shadow Chancellor Ed Balls was quick on the lecturing too. While telling the BBC Today Programme that:

"I don't think David Cameron's posturing helps at all, I think it just makes it worse"

He did some posturing of is own, telling Sky News' Murnaghan Show, however:

"In the end... somebody has got to persuade Germany that this is a catastrophe for Britain, Europe and the world and that Germany has got to change course...The problem is, the German people went into the eurozone 10 years ago on the clear promise that they weren't going to bail out Italy and the central bank wasn't going to play this role. Both things have got to change." 

So how did the German commentators and politicians respond to his unusual show of cross-party consensus in the UK (minus London Mayor Boris Johnson, calling the UK government's stance on eurozone fiscal union "unbelievable"), in favour of more European integration? Barely a whimper. There were a lot of talk of Hollande, and one mention of Clegg's interview, but apart from that, the German press was deadly silent on this issue, although hinting at a Cameron U-turn, Süddeutsche's Nikolous Piper has this to say:

"Two years ago, at the summit of the G-20 leaders in Toronto, Merkel was able to enforce the requirement that developed countries should cut their budget deficits by 2013. She was supported by the then newly elected British Prime Minister David Cameron. In the meantime, Cameron’s austerity policies led Britain into a recession, with a corresponding loss of credibility."

We get it. British euro lecturing is for domestic consumption, but is this really where Cameron wants to be in Europe (the perception isn't exactly helpful)?

Guilty Men's lessons from the past

In this week's Spectator, Peter Oborne and Frances Weaver trail their forthcoming book, "Guilty Men", which, judging by today's article, does a comprehensive job of lampooning the UK's pro-euro lobby. It will certainly make uncomfortable reading for those, including Mr Clegg, who still claim that "no one could see this coming".

The opening paragraph is the premise on which they make their argument:

"Very rarely in political history has any faction or movement enjoyed such a complete and crushing victory as the Conservative Eurosceptics. The field is theirs. They were not merely right about the single currency, the greatest economic issue of our age — they were right for the right reasons. They foresaw with lucid, prophetic accuracy exactly how and why the euro would bring with it financial devastation and social collapse."

There were of course those on the Labour side who made similar arguments but Oborne and Weaver hold no punches, especially when it comes to institutions of the establishment such as the FT and the BBC (We made our own attempt to highlight the folly of the pro-euro arguments in "They said it" last year):

"Even as late as May 2008, when the fatal booms in Ireland and elsewhere were very obviously beginning to falter, the paper retained its faith: ‘European monetary union is a bumble bee that has taken flight,’ asserted the newspaper’s leader column. ‘However improbable the celestial design, it has succeeded in real life.’ For a paper with the FT’s pretensions to authority in financial matters, its coverage of the single currency can be regarded as nothing short of a disaster."

Oborne and Weaver's research illustrates just how far the 'EU ideal' had permeated much of the political and media establishment - to the extent that those who disagreed where dismissed as "cranks".

"As Rod Liddle, then editor of the Radio 4’s Today programme, said: ‘The whole ethos of the BBC and all the staff was that Eurosceptics were xenophobes and there was an end to it. The euro would come up at a meeting and everybody would just burst out laughing about the Eurosceptics.’ Liddle recalls one meeting with a very senior figure at the BBC to deal with Eurosceptic complaints of bias. ‘Rod, the thing you have to understand is that these people are mad. They are mad.’"

And, in this respect, there is also an important warning for the future:

"One urgent lesson concerns the BBC. The corporation’s twisted coverage of the European Union is a serious problem, because the economic collapse of the eurozone means that a new treaty may be needed very soon — plunging the EU right back into the heart of our national politics."

We would perhaps add that the EU is already at the heart of national politics, something of which we're now reminded daily. Regardless, with the flaws of the eurozone now plain for all to see, more open-mindedness than in the past is a necessity when it comes to future debates about the best model for European cooperation, as well as UK's relationship with Europe - which faces a defining period in the coming years.

Blind faith is no longer an option.

So what are you saying Nick?

In a speech to business leaders in Paris today (at the Mouvement des Entreprises de France ), Nick Clegg had some interesting things to say about the eurozone. The speech was seen in the UK media as "contrasting" to the comments David Cameron made in the Spectator the other day, where he suggested that Britain should use the eurozone crisis to re-shape its relationship with Europe ("Nick Clegg and David Cameron split over Europe" as the over-excited Independent put it).

The truth is that Clegg's speech was a mixed bag - some very sensible remarks combined with others whose logic wasn't always as easy to follow.

He started off with the usual government line that the UK must resist "finger-wagging" and that there is "no room for schadenfreude" over the problems that have hit the single currency.

He made the good point that,

"Events both inside and outside of the eurozone have demonstrated the irrefutable need for all European states to pursue deep-seated economic reform, individually and together, because without it there will be no lasting success - no matter what happens to monetary union...If Europeans now take the right action in fiscal policy, financial policy, structural reform, we can correct the mistakes of the past. We can lead a new era of prosperity for our continent."

Then he made the arguably even more important point,

"We have also had to look very carefully at the functioning and structure of our banks to ensure they can never again take our economy to the edge of a precipice...[banks must be] properly capitalised and able to withstand future shocks"."

Clegg rightly noted that

"we may have different coins in our pockets, but our fates are intertwined...We all have an interest in a strong European economy...There are problems in the eurozone and they are important, not just to members of the single currency, but to all Europeans."

This is absolutely correct as we forcefully state in our recent briefing assessing the second Greek bailout. But then it gets a bit confused and hard to follow.

He said,

"Countries like the UK should not see ourselves as spectators, watching from the wings, triumphalist, complacent, as if Europe's economic woes are a eurozone problem, rather than a problem for all of us - as if it is enough to put your own house in order, but then stand by and let the neighbourhood crumble."

What, exactly, does this mean? Is it "not let the neighbourhood crumble", as in not allowing governments to default? Seems like it. But that's not the policy that the UK government is pursuing. Since it isn't participating in a second Greek bailout, it is, in fact, standing by and letting a country in the neighbourhood crumble (or at least relying on others to 'save' it).

So is he criticising his own government's policy on the Greek crisis?

It gets more confused:

"On the one hand, some people, including senior members of the previous UK government [read Jack Straw], are predicting collapse and doing so with short-sighted relish, given it would do lasting damage to the UK economy. On the other hand, some people are now arguing that only complete fiscal union can work."

He said that "It's not my role, or the role of the British government, to predict the future of a currency union we're not a part of", but then, interestingly, goes on to make a prediction:

"I expect – as is usually the case – things will end up somewhere in between these extremes."

Hold on a minute. So Clegg firstly goes to great length to explain how the fate of the euro is linked to the UK economy (which is true) only to say that it's, however, not his role to predict the outcome of the euro since the UK isn't part of it. Adding then that predicting its collapse is irresponsible, while predicting a full fiscal union is incorrect since, lastly, he's predicting that the euro will end up somewhere between the two.

But if the UK is so horribly affected by any movements in the eurozone even though it's not part of it, isn't it exactly his role to predict where the eurozone is heading so as to make preparations for whatever will occur down the line, given his position as the second most senior person in the government?

What's more, is he saying that a fudge is the best outcome for the UK, since a collapse is a disaster and a full fiscal union won't happen?

We've had a fudge for 18 months and the eurozone crisis hasn't exactly gone away. Can he say with confidence say that a fudge (whatever that involves, more bailouts? stronger EU budget rules?), isn't in fact increasing the political and economic cost of the eurozone crisis, therefore leaving the UK even more exposed to meltdowns in future (as the cost of a Greek default, for example, only increases the longer you wait to restructure)?

We're confused. To Predict or not to predict? Part of or not part of? More UK-backed bailouts or no more? Does the UK have a eurozone crisis policy or doesn't it?

Where have all the europhiles gone?

(long time passing)

A few days late, but this is a brilliant piece from Mary Ann Sieghart - one of the heroes from the old no to the euro campaigns in the UK - writing in the Independent earlier in the week. Taking no prisoners, Mary Ann settles the score with the British politicans who once so passionately argued in favour of euro membership:

"Hello? Hello? Speak up at the back! Blair? Clarke? Mandelson? Heseltine? Clegg? Huhne? Surely one of you could put your hand up? Well done, Alexander! Thank you for accepting that you were wrong all along about Britain joining the euro. Perhaps you could have a word with the other boys afterwards?"

She goes through the various arguments that the pro-euro camp used, which turned out to be completely wrong, and the "myths" that it accused the other side of peddling (which we have catalouged here) that have turned out to be completely right.

Mary Ann notes,

"The euro-enthusiasts were always accusing the rest of us of being anti-European....But if anti-Europeans had been asked to design a system to sabotage the EU project, they could hardly have done better than the euro. For what could be more damaging than a doomed currency area in which the poorest nations are forced to accept austerity measures and bailouts and the richest ones are forced to stump up for them? Nearly three-quarters of Germans now say they have little confidence in the euro and two-thirds of them are opposed to bailing out Greece. Hardly a recipe for European amity.

Pro-euro campaigners were quick to stamp on what they called "myths" that were, inevitably, "peddled" by our side. There was the "myth" that monetary union would lead to fiscal and political union. This is now accepted as the only possible solution to the eurozone's woes. There was the "myth" that richer countries might have to bail out poorer ones. That was supposed to be forbidden by treaty, but it's happened. And there was the "myth" that an external shock might hit some countries harder than others, causing huge dislocation. Well, it's there for all to see."

She goes on,

Now is the time for a reckoning. Let us salute the heroes who managed to keep us out of the euro. James Goldsmith, in the last year of his life, forced the Conservatives to agree to a referendum before we joined. That forced Labour to promise one too. Without that obstacle, Blair would undoubtedly have signed us up. Then it was a question of making strong enough arguments to reassure the British people that they were right in their instinct that joining the euro would be a bad idea. All credit goes to Lords Leach and Owen, joint chairmen of the all-party "no" campaign.

But on a question this big, it surely behoves those who tried to push us into the euro to recant now. Blair has become a Catholic; he should understand about confession, repentance and conversion. Danny Alexander showed how it could be done last autumn when he admitted he had been mistaken. We are still waiting to hear from Lord Mandelson, Ken Clarke, Nick Clegg, Lord Heseltine, Lord Ashdown and Chris Huhne. They are as bad as those old Marxists who never conceded communism was wrong even after the collapse of the Soviet Union. We deserve an apology. How dared they sneer at us for being little Englanders or xenophobic when we could just see that the economics were so obviously wrong?

Good question.

A step backwards? Hardly

In an interview with the FT, Nick Clegg today declared that the Coalition Government would not use the negotiations over a new EU treaty to repatriate powers from Brussels to London. "We are not going to reopen this issue of the repatriation of powers. We are not proposing to go backwards", he said.

Well, we kind of suspected that was the Government's position already, but "not going backwards"?! That's an utterly silly comment - it belongs to a time when the EU debate was divided between arch-eurosceptics harking back to the British Empire and European federalists equating more EU integration with "progress".

Europe and UK politics have both changed however (clue: the coalition itself). Clegg's assertion is a bit like saying that the Coalition's drive for more localism - which the Lib Dems champion - is somehow a reactionary move. Bringing back powers from Brussels to the UK means bringing decisions closer to people. That, Nick, is not a step backwards by your own definition - on the contrary.

The interview wasn't all nonsense though. Clegg did suggest that the UK's willingness to passively wave through an EU Treaty change, must be matched by reforms to the budget and changes to some of the EU's more counterproductive habits.

He said,

There is no interest for the EU in getting entirely on the wrong side of public opinion on this budget issue...They have got to get real. You can’t make these budget decisions in a political vacuum.

He also lashed out at the EU's “summit inflation” which left EU policymakers “chasing their tails”.

That's sensible stuff. But the question now is: having given away its veto over Treaty change, how does the Coalition plan to deliver in the post-2013 EU budget negotiations?

Talking about EU reform as a "step back" is probably not the smartest way of doing things. Not least since many member states would make the same argument about any change to the EU budget.