Posts tagged ‘Financial services’
Little choice for Cameron in Europe à la carte
This week’s summit in Brussels has certainly been a defining moment in the history of the European Union. The UK’s decision to block any revision to the existing EU treaties as part of the package to save the euro is confirmation that we live in a Europe à la carte. Whether it proves to be a “two-speed Europe” only time will tell. That depends on how the eurozone evolves.
Given Britain’s position outside the euro and the fiercely eurosceptic mood in his Conservative party I’m not sure that David Cameron had any choice other than to veto proposed modifications to the EU treaties.
Cameron’s approach is consistent with the coalition agreement with the Liberal Democrats. This clearly stated that a referendum would only be triggered if there was a transfer of power from the UK to Brussels. The prime minister does not want to be forced into a popular vote; the best way to avert any such risk is to use the veto and to leave the 17 to work out their own solution.
Suppose Cameron had agreed to support a treaty revision aux 27, it would have been extraordinarily difficult for him to avoid a referendum. Britain is already subject to Article 126 of the EU Treaty concerning excessive deficits and government debt. Any change to the associated protocol to include new rules would surely have raised major problems in the Westminster Parliament. An alternative would be the use of Article 136, which sets out provisions specific to eurozone countries, but that too would seem to implicate the UK, particularly as it would further strengthen the powers of the Commission and the Court of Justice.
Cameron has domestic political reasons to tread carefully. There are quite a few Tory MPs who loathe his partnership with the Liberal Democrats and who would gladly use the European issue to seek to depose him and break the coalition. He may have cited the defence of the City of London as his make-or-break issue, but this seems rather disingenuous, since financial services legislation is governed by the existing treaties, while the imposition of a financial transaction tax, seen as a special danger for UK financial services, would be subject to unanimity.
There is of course an implicit danger here, that the 17 eurozone countries could decide to impose a unilateral tax on their own investment firms, whether operating in London, New York or anywhere else. And pity poor old Ireland, which dreads a eurozone agreement to harmonise corporate taxes and so threaten Ireland’s 12.5 per cent rate.
It is in areas like these that Britain’s longer term negotiating position in Europe will be seriously weakened. It is significant that six non-euro countries are already committed to join the “fiscal compact” agreed in Brussels, while Hungary, Denmark and Sweden will probably do so after consulting their parliaments. The UK will be the odd one out.
One question which the summit does raise is whether the British prime minister has worked hard enough to build alliances with his natural allies in Europe. Briefing after last month’s meeting with Chancellor Merkel suggested that some sort of agreement had been reached between the two of them, but there was no evidence of mutual understanding in Brussels this week.
Former MEP Ben Patterson has just published The Conservative Party and Europe, a comprehensive book tracking how Conservative Party opinion has switched from staunchly pro-Europe in the 1970s to viscerally anti-EU today. This switch led to the decision of the Conservative group in the European Parliament to sever links with the European Peoples’ Party. Patterson argues that this move potentially weakened David Cameron’s position with his natural allies.
The recent EPP meeting in Marseilles was perhaps a case in point, where EPP leaders met informally to agree common positions or at least to clarify reasons for disagreement in advance of the summit.
It could be argued that Friday’s blood-letting has cleared the air. The UK can now concentrate on the overriding priority, to do everything it can – including through the IMF – to help prevent the collapse of the euro. The irony is that it is the weakness of the eurozone structure, and not its strength, which has triggered the need for the new inter-governmental treaty and threatened the future of the whole European project.
Michael
Who said what last week on energy?
We’ve flagged our conference last week on financing Europe’s energy needs shamelessly on this blog in recent days and weeks. You’ll be happy to know, no more. This is the last reference to it we shall make. Just to note for the 150 souls that didn’t make it off the waiting list to gain entrance, many of the principal speakers agreed kindly to repeat some of their main points to camera post their conference interventions.
You can find everyone from Sharon Bowles MEP to Philip Lowe of DG Energy speaking on energy, climate and Europe here.
A highlight was hearing Dr. Fatih Birol from the IEA contrast the good that could come from Europe reasserting its leadership role on climate while warning Europe about the impact such leadership could have on European competitiveness. Jos Delbeke from the Commission perhaps unsurprisingly argued for a renewal of EU leadership in the field. Today’s Commission work programme suggests he may well win out.
James
Follow ‘Financing Europe’s Energy Needs’ online
Tomorrow sees our conference on financing Europe’s energy needs at the Bibliotheque Solvay. Alas, we reached the 200 delegate limit some time ago and so there is around 100 of you that won’t get to attend in person due to Belgium’s pesky fire regulations.
Fear not. You can follow discussions on our Twitter feed http://www.twitter.com/eurotwittering or using the hashtag #euenergy If you are there in person, feel free to join in the conversation online.
We shall be tweeting the comments from speakers such as Jos Delbeke, Philip Lowe, Sharon Bowles MEP and Lena Ek MEP throughout the event.
In addition, members of our team shall be posting on this blog in coming days with their own reflections on the discussions from the event.
James
Financing Europe’s Energy and Climate Action Needs
Greatings from a sunny, if cold, Washington D.C. where we’ve been having our global public affairs meeting over the past couple of days. Many highlights in the course of the two days, much of which you can catch at the FH Public Affairs twitter account. DC colleague Silvio Marcacci patiently sat at the back of the room tweeting away as various colleagues gave their views on everything from food safety and healthcare to energy and financial services. We’ve also some video that we shall be seeking to upload on the FH Public Affairs Youtube Channel.
On energy and financial services, I bring news from DC of something that is happening in Brussels later this month.
The first annual conference that is seeking to bring together those who know about energy with those who know about finance. Tackling climate change and answering our energy needs as a continent are going to take some serious investment of both political will and cold hard cash. It seems, at least to me from a personal perspective, that Europe needs to put as much ‘political leadership’ in this domain as it expends in seeking to lead in negotiations for binding targets on climate change at an international level. As such, it will be interesting to hear what some of our speakers have to say, especially as they include the Director Generals of both Climate Action (Jos Delbeke) and Energy (Philip Lowe) amongst others.
You can find out more about the event on March 24, which F-H is co-sponsoring, here.