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Friday, November 18, 2011

Cameron and Merkel spar

"Why are the British still in the EU anyway?" reads the headline in today's Bild, Germany's biggest selling tabloid, proving that it's not just the UK tabloids that enjoy "getting stuck in" when it comes to a good-old fashioned political dust-up. (And you don't mess with Bild - Europe's most widely read paper).

However, for those more interested in the substance of today's Anglo-German tête-à-tête, the outcome of today's meeting was rather a damp squib, at least on the big issue: the future of the eurozone.

The meeting was given a heightened sense of tension after the publication of a leaked memo from the German Foreign Ministry was translated by one of our very own Open Europe team and published by the Telegraph today, revealing what EU Treaty changes the German government might seek to explore at this December's EU summit (you can read our analaysis of the memo and access the full translated text here). This was, of course, in addition to the expected discussions about Germany's demands for a financial transaction tax (a UK no-go) and Cameron's calls for a more interventionist ECB (very much a German no-go). So a mutual stand-off over some absolute key national red lines.

The joint Cameron-Merkel press conference was full of warm words about "strong friendship" but, under the surface, it was clear that there remain deep differences and concerns on both sides about how to approach a possible EU Treaty change, and there were no illusions that neither leader is going to budge on the FTT or ECB questions. There was a telling moment when Cameron did all he could to avoid a question on the ECB from a German journalist. The one thing both Cameron and Merkel could definitely agree on was that increases to the EU budget "must be linked to the inflation rate."

However, on the big one, Treaty change, Merkel noted that both the UK and Germany have their own "interests". Germany is keen on tightening up the eurozone's rules on debt and supervision of national budgets while, according to the German Chancellor, "The UK has made it clear to us that they have a few difficulties here and there with certain legal provisions of the EU."

The million dollar question is what these "legal difficulties" are (the UK is considering asking for an "emergency brake" on financial services regulation) and what Cameron is prepared to do about resolving them?

For his part Cameron acknowledged, "It is obvious that we don't agree on every aspect of European policy, but I am clear that we can address and accommodate and deal with those differences."

So, it will certainly be an interesting and politcially-charged couple of weeks on this front, leading up to the EU summit on 9th December.


Rollo said...

A very good question, to which there can be no answer: there is no logical or economic or historical reason for belonging to this EUSSR. But a very wrong prophesy, as, no, the UK will not be joining the euro. Probably there will not be a euro much longer, just the reichsmark and a gaggle of weak currencies.

Rollo said...

No doubt Lord Haw Haw will be returning form Europe claiming victory just as Bliar did when he gave away our rebate. Why are these people being allowed to lay down terms as to how we run our country? We should tell them how we intend to do it.
And 2% increase a triumph for the UK? When we are cutting our armed forces and schools and education by 10% and yet still borrowing more that ever. We should stop paying anything to the EU. The savings would immediately be more than all Osborne's cuts, and the economy would start to grow.

Idris Francis said...

You presumably mean "emergency brAkE?"