Following a “row” with Germany over the UK’s involvement in a new rescue package for Greece, Cameron has declared something of a victory. The EU bail-out mechanism through which the UK would have been partly liable, the European Financial Stabilisation Mechanism (EFSM), won’t be activated and the UK will only contribute €1bn or so to a fresh Greek aid package via its IMF commitments.
Then we go on to argue what you've heard us argue many times before - that the bail-outs aren't working. As the group of 14 Tory MPs from the new intake argued in yesterday's FT, nodding through a failing eurozone strategy will leave the UK exposed to future meltdowns in euroland. It should instead be pushing for a restructuring - and plan for it to be achieved in an orderly manner. Read the full piece here.
Not that it was much of a row in the first place – it was primarily the Guardian that got a bit over-excited, quoting one German official, which made No 10 look pretty good in the end. A proposal for activating the EFSM was never really on the table. However, since the UK actually doesn’t have a veto over its own participation in this fund (bizarrely, the activation of the EFSM is decided by a majority vote amongst EU leaders) there was still a theoretical risk that the UK could be outvoted. Indeed, the fund could again be called upon in future bail-outs. So this game isn’t exactly over.But in fact, this is not the most relevant discussion. Yesterday Cameron stated that “when the eurozone suffers, the UK suffers”. In pretty strong language, he has stated that it is very much in the UK’s interest that the eurozone returns to health. But if this is so, why isn’t the UK participating in a second Greek bail-out?