Belfast Telegraph

Isolation could prove anything but splendid...

Northern Ireland needs the eurozone to avoid meltdown. But David Cameron's love affair with the City makes that more, not less, likely, says Robin Wilson

They don't believe in the European idea. They are foreigners to this project." That is how the French quality paper Le Monde reacted to the veto by Prime Minister David Cameron of reform of the European Union treaty to accommodate moves towards fiscal integration. It was a view that resonated across the continent.

Yesterday in the Commons, Mr Cameron offered a robust defence of his action on Friday in Brussels at the summit of EU leaders, claiming he had protected what he described as Britain's interest.

And there was no doubting its popularity on the Conservative benches at Westminster, although senior grandees of the Tory Party, like Michael Heseltine and Ken Clarke, were discommoded - and the political noses of the pro-European Liberal Democrats were put decidedly out of joint, as evidenced by the absence of their leader, Nick Clegg, during the prime minister's statement.

But there is no getting away from the arithmetic: a 26-1 defeat means an argument well and truly lost in Europe. And the fundamental difficulty is that the Conservative leader doesn't 'get' the European project.

In essence, that project has been to turn post-war Western Europe away from the toxic mix of aggressive nationalism and xenophobia on the one hand and unregulated markets and deflation on the other that led to the Holocaust, mass unemployment and the second global conflagration of the 20th century. It has bound generations of European political leaders together and provided unprecedented peace and - until recently, at least - social comfort.

The problem is threefold. First, a different political narrative in Britain has bedevilled UK membership with Eurosceptic rumblings from the outset. In this narrow and chauvinistic view, the Second World War was all about Britain 'standing alone' against the Nazi threat.

Secondly, the lessons the economist John Maynard Keynes taught the world about how to avoid depression by the stimulation of demand have been learned least-well in his native London, where the Treasury view has favoured instead the free-market ideology embodied in the City.

Cameron made it brutally clear that he equated the UK public interest with the very private interest of the global finance houses which occupy the Square Mile.

A "senior Lib Dem minister" told the Observer at the weekend that he was very angry that Mr Cameron had put "the interests of the City above manufacturing and real jobs". And defending what Keynes called the "capitalism of the casino" hardly squares with the Tory leader's claim that he wants to "rebalance" the economy to favour what his chancellor, George Osborne, has called "the march of the makers".

Which poses the third problem. As the respected economist Will Hutton, who formerly worked in the City, put it, Mr Cameron is "saturated with (the) prejudices" of "upper-middle class, home-counties England". Notably, yesterday, he stressed how many financial services jobs there were in Birmingham and Scotland - belatedly aware that the further one goes from London, the stronger the argument becomes for public support for manufacturing to promote employment and recovery.

On Saturday, the Daily Record ran an editorial for its Scottish working-class readership echoing the message from Le Monde for the French liberal Left: "David Cameron shamefully exiled Britain from mainstream Europe as he put the demands of 80 backbench MPs and City gamblers ahead of the interests of this country's 62 million citizens, including 3.5 million whose jobs rely on trade with the EU."

Out of their ideological desire to be uber-British, DUP ministers rushed to differentiate themselves from the many voices in Scotland and Wales, concerned that Mr Cameron was not speaking for the devolved jurisdictions.

It fell to Alex Attwood of the SDLP to propose that the First and Deputy First Ministers contact their other devolved UK counterparts with a view to meeting the prime minister urgently, to press him on the implications of his action.

From our, and their, point-of-view, the larger problem is that the fiscal union which Mr Cameron is determined to try to block has been badly constructed - ironically due to Germany's dominant role.

Far from learning the lessons of the two deflationary budgets by the then chancellor, Heinrich Bruning, which led to Hitler's accession to power in 1932, his current successor, Angela Merkel, is obsessed by her political formation in the old Stalinist east Germany to oppose any "collective" solutions to the crisis in the eurozone.

The German economic journalist Wolfgang Münchau wrote in yesterday's Financial Times: "To solve the crisis, the eurozone requires, in the long run, a fiscal union with a prospect of a eurozone bond and, in the short run, unlimited sovereign bond market support by the European Central Bank. What we now have is no treaty change, no eurozone bond and no increase either in the rescue fund, or in ECB support."

Northern Ireland is not in the eurozone. But, on the very edge of Europe, and a very long way from its German heartland, it desperately needs the European economy not to fall into a prolonged depression. Because of the short-sightedness of Ms Merkel, as well as that of Mr Cameron, however, that looks all too likely.

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