STAFF NEWS & ANALYSIS
EU – Britain Wants Out?
By Staff News & Analysis - September 19, 2011

Tory MPs demand referendum on Europe … David Cameron (left) must call a referendum on Europe or face a rebellion from his own party and a backlash from voters, a leading back-bench Tory warns today. Mr Pritchard accuses Mr Cameron of failing to honour a 'guarantee' to hold a referendum on the Lisbon Treaty … Mark Pritchard, the secretary of the 1922 committee of Conservative MPs, is the most senior Tory yet to demand a vote on Britain's membership of the European Union following the eurozone crisis. – UK Telegraph

Dominant Social Theme: Britain is part of Europe now and it is necessary to reform from within rather than leaving like a sulky child.

Free-Market Analysis: The Telegraph, perhaps Britain's leading Euro-skeptic mainstream publication was brimming with reports critical of the staggering EU this weekend. Article after article slammed the EU or, even worse, brought warnings of political developments that might force Prime Minister David Cameron to hold a referendum on the EU – a process he guaranteed he would initiate once he won power and then never did.

The tide does seem to be swelling. The anger felt by the British people over supporting the useless EU with literally billions of pounds is aggravated by Britain's increasingly tenuous financial position. Cameron is yet resisting, but if the crisis in Europe is not solved (and it has been dragging out for several years) it is certainly possible that the political ramifications could cripple Cameron's reign or even bring it down.

The Telegraph is doing its part. Uber-conservative columnist Janet Daily posted an editorial entitled "The European Dream Lies in Ruins" (tell us how you REALLY feel, Ms. Daily) while in an article entitled "Tory MPs Demand Referendum" (see above article excerpt) Tory politician Mark Pritchard is quoted as saying he believes the EU has become an "occupying force" eroding British sovereignty. Worse, the support of "backbenchers" is something Prime Minister David Cameron can no longer count on, he warns.

Another Telegraph article traces Chancellor Angela Merkel's woes. The "Iron Chancellor" just suffered her sixth electoral defeat in regional German elections that are seen as a direct reflection of her acquiescence to continued funding of Europe's broken Southern flank, the so-called PIGS – Italy, Spain, Greece, etc.

Merkel is supposed to deliver to the EU a German consensus that will enable increased funding of the PIGS, but at this rate she won't even be able to deliver a majority to her own party come the next elections. Yet she is not the only politician that made a splash regarding the EU over the weekend. British political heavyweight, former Chancellor of the Exchequer Norman Lamont, has called for a "rethinking" of the EU in a Telegraph editorial.

Lamont's editorial must be especially damaging to Europhiles because of his initial involvement in Britain's Euro-wars. It was Lamont who fended off the pressure for Britain to join the euro-club directly by giving up its pound. Now Lamont is in the position to write "I-told-you-so." Here's an excerpt:

There is nothing unexpected about the euro's present problems, which I have watched with mounting concern. The year 1991 is one I could never forget. As Chancellor of the Exchequer, each time I set off to negotiate Britain's opt-out from the euro in the proposed Maastricht Treaty, I did so with a heavy heart. It was a wearying task, fending off the pressure for us to join the euro.

I made it clear to my European colleagues that I and many others did not believe a single currency could work. Europe was not a natural labour market; a "one size fits all" interest rate wouldn't work; and you couldn't have monetary union without fiscal, and therefore political, union, which was unacceptable to the British government …

Today, there are only two answers to the euro crisis: cough up or break up. Angela Merkel, caught between the crisis and an increasingly impatient public opinion in Germany, is seeking some elusive middle way that may not exist. For this reason, the eurozone's reaction at each critical stage has been to do the minimum necessary to keep the euro alive. This has bought respite, usually for a few days – but the crisis soon reignites, with further rises in interest rates which the member states can ill afford.

For Lamont, the euro "resembles a pack of cards" on its way to collapse. The Eurozone, he writes, is running out of lenders of last resort, yet no further solution has presented itself. A break up of the euro-club would cause a default among Europe's largest banks but no other solution seems practical.

Greece cannot pay its debts and austerity measures and bailouts are merely prolonging the process of insolvency. Worse yet, were Greece finally declared (formally) to be bankrupt, the same declarations might well be applied to other larger economies. The euro and the EU might be equally threatened. Lamont believes as a result that Europe's leaders will continue to apply what he calls "half measures."

The eurozone may apply so many sticking plasters, one on top of the other, that eventually the haemorrhaging will stop for a while, allowing the euro to stagger on for a little longer, possibly even a few more years. But the price will be a continued sapping of confidence and repeated crises. The timing may be uncertain, but the ultimate break-up of the euro in its present form seems to me inevitable.

The single currency has not contributed to Europe's stability but is actively undermining it. Disharmony, not harmony, is the result. "Far from encouraging peace and harmony, [the single currency] has increase[d] tension and conflict between nation states, and with other global powers," he writes. His prediction: "So far, we have seen unrest in Greece. But there is likely to be much worse to come."

Lamont opines theoretically, for he is out of power; Mark Pritchard, leader of 120 conservative politicians that have backed Prime Minister Cameron, provides the Prime Minister with a real-life reality check. The "unquestioning support" of backbenchers is no longer guaranteed, he warns.

Cameron, he advises, should hold a referendum next year on whether Britain should have a "trade only" relationship with the EU, rather than the political union that has evolved "by stealth." He wants a "clear plan" from Cameron on Britain's relationship with the EU going forward. So does Cameron's Foreign Secretary William Hague, who recently said that Britain could prosper by loosening ties with Europe.

It should be noted, however, that Cameron and the Tories are enmeshed in a coalition with another, much smaller party, the Liberal Democrats. And various Liberal Democrat officials have taken to attacking Tory Eurosceptics as "enemies of growth," according to the Telegraph. The growing row in Britain over the EU thus has not only continental ramifications, it also has immediate political ones and could eventually cause a rupture in the coalition that could bring Cameron down, or at least cause a significant realignment.

The Telegraph article quotes Pritchard at length: "Conservative MPs will not continue to write blank cheques for workers in Lisbon while people in London and Leicester are joining the dole queue," he writes. "For many Britons, the EU has already become a kind of occupying force, setting unfamiliar rules, demanding levies, curbing freedoms, subverting our culture, and imposing alien taxes." Here's some more:

"In less than four decades, and without a single shot being fired, Britain has become enslaved to Europe — servitude that intrudes and impinges on millions of British lives every day. "Brussels has become a burdensome yoke, disfiguring Britain's independence and diluting her sovereignty … The Coalition should agree to a referendum on Europe asking whether Britain should be part of a political union or of the trade-only relationship we thought we had signed up to.

"This is a moderate proposition that would attract voters from across the political spectrum, unite many on the Left and Right within Parliament and galvanise the support of most in the media … The British have grown weary of Europe. The Coalition government should end decades of political appeasement by successive governments and champion freedom and democracy for Britain – and agree a referendum."

Provocative! Cameron must now feel pressure both from his liberal partners and his conservative supporters. A man with the political convictions of his recent predecessors Gordon Brown and Tony Blair (that is to say none at all) Cameron will nonetheless find it hard to avoid what is inevitably becoming a kind of pincer-like movement that may crush the entire uneasy UK political structure.

After Thoughts

The ramifications of the EU crisis are spreading. The lack of a solution is telling. Merkel may soon be seen as a spent force because she cannot find a compromise acceptable both to her Eurocrat partners and German voters. Cameron, too, and his administration, may fall victim to the ongoing Euro-crisis. Actions have consequences, and inaction, as well.

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