Either a new treaty of a major reworking of existing ones is needed to sort out the eurozone

He is facing calls from the Eurosceptics to demand repatriation of powers from the EU ( whatever that means) as a price for signing up to any alterations to the various EU treaties that all 27 EU members are signatories of.

It would be easier for the 17 Eurozone countries to use amend existing treaties to make the changes they need to ensure Euro stability rather than having a new deal just for the 17. However any change to existing treaties needs the approval of all 27. If Cameron blocks change he will be very harshly thought of by other EU leaders and will lose further influence

If Cameron plays tough on this it will result in the UK being frozen further from the centre of the EU with even less influence and will anger the Lib Dems, if he doesn’t play hardball he will anger the eurosceptics in the tory party who want a referendum and argue that any new deal triggers a referendum under the laws Cameron passed.

Can he keep everyone on side? Placate the two extremes of the coalition and not bee seen as a spoiler in Germany and France?

He is in big trouble here – could be his biggest test. He is in hock to Europhiles and Eurosceptics and I see no way out for him

Is he a good enough politician to wriggel out of this? Its his biggest test to date.

The move towards greater fiscal and political union in the Eurozone will greatly reduce our influence anyway.

If Cameron plays hardball and threatens not to sign, he may win some baubles to wave at the electorate and his own sceptic MPs.

The whole calamity was already going to be a lose-lose for everyone in Europe. At least we’re not actually in the Euro.

wriggel – that’s so much better than the proper spelling. I think I’m going to deliberately use that from now on 🙂

As to the question, I suspect that there’ll be a lot of crap spouted by both sides as usual (by the politicians and the usual suspects here) and in the end we’ll go along with it because in reality everyone knows that we have no real choice, needing to be part of Europe to stand any chance of success in the long term.

[video]http://www.youtube.com/watch?v=TjJHnKw7YNA&feature=related[/video]

Times like this I think “What would TJ Gordon do?”

No brainer this for Dave. He won’t sign anything and there will be no repatriation of powers or whatever.

He will have to lose some face on the European front as he has no backing from his party to enter any constructive talks and as a result he will have forced them down the road of a new treaty for the euro area 17 if they can agree one. We shouldn’t really be in it anyway given the enormity of what they are doing and by default we are taking a big step into the margins of Europe.

The thing I’ve always found most surprising about Cameron is that he doesn’t require a popemobile to transport his giant shiny forehead around in.

I think, as an astute politician, he’ll have been shocked at exactly how marginalised we’ve already become in Europe.

The bottom line is that represents 40%+ of our trade. Though some people feel the foaming Euro-sceptics hold the power in the Tory party, they don’t. Big business does.

The boardrooms of the country – his paymasters – will let him posture for a bit, but they won’t allow him to do owt daft.

I expect Dave will do what he always does when he delivers news unpalatable to the right wing nutters. He’ll use the Lib Dems as a fig leaf and say “I’d love to have repatriated powers but Nick and Vince wouldn’t let me”

What he wont say is what TJ says, “This Euro looks like a winner, Britain ought to join.”

daves in a pickle

appeasing tory eursceptoics and little englanders would be very hard without isolating us further from from europe
as i understand it the fiscal union will be brought about without major changes to the treaty so uk doesnt get a chance to veto?
if van rumpouy pulls that off dave will be left with little if anything to prevent the internet from exploding under the weight of talkbacks on the daily mail/ telegraph

as said above its business that makes these decisions, not shaky coalitions of individual governments

Dave is certainly facing an important week that may well determine the success or otherwise of the first half of his premiership. He is not alone in this – as all European politicians are facing the same challenges – but at least his has slightly more flexibility and time than many of his peers thanks to the fact that we have avoided tying ourselves into the less attractive parts of the European project.

Lets hope that the politicians finally address the real challenges and become proactive rather than reactive to the crisis. I fear that despite market reactions in past 36 hours that we will ultimately be disappointed. Martin Wolf makes quite a good summary in today’s FT.

http://www.ft.com/cms/s/0/396ff020-1ffd-11e1-8662-00144feabdc0.html#axzz1faEANdyv

If the most powerful country in the eurozone refuses to recognise the nature of the crisis, the eurozone has no chance of either remedying it or preventing a recurrence. Yes, the ECB might paper over the cracks. In the short run, such intervention is even indispensable, since time is needed for external adjustments. Ultimately, however, external adjustment is crucial. That is far more important than fiscal austerity.

In the absence of external adjustment, the fiscal cuts imposed on fragile members will just cause prolonged and deep recessions. Once the role of external adjustment is recognised, the core issue becomes not fiscal austerity but needed shifts in competitiveness. If one rules out exits, this requires a buoyant eurozone economy, higher inflation and vigorous credit expansion in surplus countries. All of this now seems inconceivable. That is why markets are right to be so cautious.

The failure to recognise that a currency union is vulnerable to balance of payments crises, in the absence of fiscal and financial integration, makes a recurrence almost certain. Worse, focusing on fiscal austerity guarantees that the response to crises will be fiercely pro-cyclical, as we see so clearly.

DC does face a very difficult position and this is covered well in The Times today. Ultimately, they all know that the € cannot survive in its current form and that at best you will see two, possibly, three € zones in the future. The tricky bit is that France will be humiliated into Div 2 and the little general will find this hard to accept!! But the hint of currency re-alignments will cause chaos in the banking systems and the politicians and markets know that. The recent flooding of the market with $ liquidity last week was in response to the near failure of a European bank and the foundations of sand continue to shift.

CallmeDaves issue is very different to the rest of the EU leaders

he has very little influence on what the deal will be for the 17 eurozone countries. He is completely marginalised and sidelined due to his actions but he is in a very difficult position in his own party with the Eurosceptics now after the payment for supporting him for the leadership. Merkel and Sarcozy will just ignore his irrelvant bleatings – he has no following in the EU at all and no power base

A cabinet minister has intensified the pressure on the prime minister by saying that there will have to be a referendum in the UK, if treaty revisions are agreed by EU leaders.

http://www.guardian.co.uk/politics/2011/dec/07/tory-minister-cameron-europe

If he can reconcile the eurosceptic right and the europhile Lib Dems he will be doing very well indeed.

his weakness is he is beholden to the Eurosceptics for him election as Tory leader and to the Lib Dems for being PM. His promises to these two groups are mutually exclusive

Well that’s actually not a bad position to be in and minor in comparison with the problems facing the Merkozy double act. If there are tension in the coalition, they pale into rel insignificance in comparison with the differences between the Fr and Ger political elites.

It is perfectly plausible and likely imho that a deal gets struck between the 17 only. This may be in GB’s best interest if is stabilises € in short term and gives the financial system a breather. If this leads to a recovery in Eurozone demand then so much the better.

But lets look at what has happened in the past few hours:

Out:

1. Private sector involvement in rescheduling debt – move to poss voluntary agreements. Hmmm?
2. Automatic sanction on fiscal “sinners” and review of breaches of fiscal rules by the European Court of Justice
3. “Eurobonds” – joint issuance of sovereign debt – once again.

In:

1. Voluntary restructuring
2. Likelihood, though no automaticity, of sanctions on countries that fail to stay within the limits on budget deficits – so European!!
3. Inserting a balanced budget requirement into the domestic legislation of members -how will this work?
4. Introduction of the European Stability Mechanism – the permanent rescue instrument – in June 2012, instead of June 2013;
5. monthly meetings of the European heads of state and governments, during the crisis, to oversee policy co-ordination.

That balance doesn’t fill me with that much confidence. I agree with the un-named official who said:

Such a plan merely to amend existing regulations would “fall short of what we want, which is a clear legal framework to institute a new stability culture,” he said. Warning that “a number of actors have not understood the seriousness of the situation”, the senior official – speaking on condition of anonymity – said that a “bad compromise” of small steps or “little tricks” would not meet the expectations of the public or the financial markets. “A decisive step to restructuring the eurozone is needed,” he said. “We cannot achieve that with a whole collection of small steps.”

You really think the possibility of Cameron losing his parliamntary majority is not a bad position to be in?

You appear to me to still be wishing for a collapse of the euro that simply is not happening nor will happen

Only because I don’t think this will happen. Do you really think that Wallace and Balls-up fancy being in charge at the moment? Leave aside whether they are competent or not!!

I would be prepared to bet that he lasts longer than many of the current 17 leaders!

The politics should be a side show, but as always the requirements of power (for all the players) will over-ride the requirements of the economies and the population. Within Europe is was ever thus.

The only certainty is that this weekend will not be the end of the matter.

I wish I shared your confidence TJ. Unfortunately, I don’t. What we’re witnessing today is yet more of the endless faffing about of European leaders. The never ending umming and aaaaahing

Whats needed is for someone to grow a pair and declare that the ECB will be used as a lender of last resort, Issue combined Euro-bonds, and many other things. In reality, they’re not going to do any of this

You can only do that for so long before ‘the Markets’ cry enough, and take the decision out of your hands

Always interesting to see how the rest of the world sees Camerons effort to “protect British interests”:

”UK veto threat clouds euro rescue efforts” (Aljazeera)

Binners – I agree, but note that they are doing exactly the opposite. The Germans are sticking with not lender of last resort or eurobonds and they seem to be winning with both.

How will these incompetents phrase the bazooka this time – the last effort was pathetic, and now they are trying to combine two fund to hit the magic number. Meanwhile, Rome burns metaphorically and in reality.

merkozy et al arent stupid they must know that a long term fix is required

what the markets want is a kind of cozy capitalism where its easier to lend money to poorer nations because that means more credit = more business deals = bigger profits to be made
the trouble is, its gambling with non existent money that causes crashes
in such a case they then want the ECB to step in and lend more money to keep the carousel spinning

id love to see merkozy have the balls to stand up to the money men and say they dont want to play it that way

meanwhile castirondave looks on from the outside and sees his best chance as shouting veto really loud so that he can maintain the status quo

and Borris uses it as a step up his for his leadership ambitions

Nice article:

http://www.ft.com/cms/s/0/3406c9d8-20f2-11e1-8a43-00144feabdc0.html#axzz1faEANdyv

so for the 99.9% of stwers who dont subscribe to the ft…………?

so will the new merkozy proposed euorozone plan and tobin tax be any good for the uk?

The point I was making was can Cameron hold the coalition together – he is going to have to make decision on what to do on a European question and whatever path he takes one part of his coalition will be very upset.

If he can steer a course thru that he shows he is a good political operator. Europe has been an issue waiting to trip him up .

teamhurtmore – Member

Nice article:

http://www.ft.com/cms/s/0/3406c9d8-20f2-11e1-8a43-00144feabdc0.html#axzz1faEANdyv

You need to understand teamhurtmore that whilst the Financial Times likes to tease and tantalise potential customers with the odd free article, it doesn’t allow links to go through its paywall.

Here’s a nice picture to make up for your disappointment

Ernie – sorry its essentially a nice survey of the key issues ie:

Discipline vs solidarity
Euro ins vs Euro outs
Federalists vs nationalist
National sovereignty vs pooled sovereignty

TJ – I think there is inevitably a lot of mischief making going on, as demonstrated by the odd Tory woman MP on newsnight. Good job that Malcolm Rifkin was resurrected to put the silly woman back in her box.

This weekend is about buying the € some time. That is it. Most players have key issues that they want to defend and that they are prepared to trade. It would be absurd to believe that this will happen this week. At best, its months (if at all). This weekend is all about allowing the € zone breathing space to muddle through – we have seem this time and again, and this time it will be no different.

The most likely outcome is a series of measures (largely flagged now) that will impose more discipline within Europe. There is obviously lots of haggling as to how this will be handled but by this evening it seems that issues such as voting rights will be affected by compliance with certain agreed parameters. Leaving aside the tobin tax, there is no reason why this should lead to an immediate referendum and even the tax doesn’t justify this. The key thing is what is the ECB going to do and how will its mandate change. is the new Iron Maiden, for change here?!?

So we keep the status quo albeit it with measures to reduce the immediate pressures on the €. DC can probably win a concession on the tobin tax, there will be some rhetoric re protecting sovereignty etc.

Meanwhile nothing real will have been done to address the underlying causes – low growth, excess leverage etc and social pressures will continue to build and the next leg of the breakdown of the € will merely have been postponed.

Sigh….

Well Cameron has successfully isolated himself, pissed of Sarkozy and Merkel and been given a bollocking by the luxembourg PM. How to win friends and influence people – use a EU summit for posturing for his own party at a home.

Plonker

been given a bollocking by the luxembourg PM

I’m sure he’s really worried about that.

What he won’t do is torpedo anything that looks likely to save the Euro. As has been said above he’ll get a few concessions on things like no taxes or additional regulation on The City.

From what teamhurtmore has posted it looks like what is being proposed if far from any kind of meaningful fiscal union that would entice the Germans to allow the ECB to buy Greek, Italian and Spanish soveriegn debt with either real money or QE. If that’s the case the markets aren’t going to be convinced. Long term the Euro is doomed unless Southern Europeans can be persuaded to work, save and pay their taxes like Germans- or the German people accept they’ll have to keep bailing out the Southern Europeans for ever more as the price of keeping the Euro going.

pissed of Sarkozy and Merkel

That’s a good thing isn’t it? I mean it’s not like either of them would be after something to protect the interests of their own country rather than promote the best interests of the whole of Europe is it? 🙄

TJ – yet again you show an extraordinary ability to let prejudice overcome analysis. How could DC (or any other Uk rep) not isolate him/herself from Merkozy? All the politicians are posturing for their own backbenchers and voters and fighting on the basis of self interest. Yes, there are elements of the Tory party that are being nothing better than childish/naive and the Libs are deafening us with their silence while Wallace really is an irrelevance. So under the circumstances DC is doing an ok job.

Merkozy are deliberately pushing DC into a corner for their own interests. Think about the tobin tax? What really is driving Sarkozy here? First, this tax would ensure that the Uk would contribute 35-40% of the total tax revenues for the great European black hole. Imagine him admitting that openly. far smarter tonwrap that up in a bit of banker bashing legislation so that the public would swallow it and hide the catastrophe that is French banks. Under Sarkozy’s watch the major French banks have got themselves trapped by the process. Default by Greece and Italy would require French giv intervention (nationalisation) hence Sarkozy’s resistance to private sector pain with debt restructuring. This guy is the real snake not DC, posturing when he knows La Republique should be in Euro Div 2; proposing unrealistic solutions and working massively to harm Uk interests. So well done for Cameron having some balls for standing up to him..

we are for all intent and purposes, out of the EU.

we are for all intent and purposes, out of the EU.

Except that we’re not. The main disadvantage to us of leaving the EU would be losing the trading agreement, and that’s still there quite happily, and will remain there until such time as we do actually leave the EU.

Except that we’re not.

You missed out ‘yet’ with the new EU club that we now have no voice or influence over, we have lost the ability to influence decisions that will impact on 70% of our exports, nice one Dave. I hope that all the Daily Mail/Express readers will be happy once the Tories get inflation back upto glory days double digit levels again.

The Tories on the radio amused me, as even they admitted that once the financial crisis is over, we are going to pay dearly for this …..

Mind you its all OK because we have safeguarded 10% of our economy whilst binning 70%.

teamhurtmore – you are the one whos anti eu predjudices colour your views.

You really are deluded ifyou think Cameron is doing this for the UKs interests. Its all about appeasing a small group of xenophobics within the tory party and the UK national interst is being harmed by his posturing

Just because you want the Euro to fail………………

anti eu predjudices

I had a look at the BBC website comments section relating to this story, and the attitudes displayed there are really alarming – a rather bizarre blinkered xenophobia, particularly about the French and Germans, which usually relates to some yearning for a return of British sovereignty. Quite what “British sovereignty” stands for when a significant percentage of the UK’s economy is controlled by non-UK based companies is beyond me, but perhaps I underestimate the importance of the Westminster parliament being able to create it’s own Health and Safety legislation!

Just because you want the Euro to fail………………

Well it’s not really up to us (STW or the UK). Or do you think the proposals which CMD vetoed would really make a significant difference to the salvation? What Germany needs to do is put its hands in its pockets.

You really are deluded ifyou think Cameron is doing this for the UKs interests. Its all about appeasing a small group of xenophobics within the tory party and the UK national interst is being harmed by his posturing

Here we go. Pro-Scottish independence is supporting self-determination. Pro-British independence is xenophobia.

Pro-Scottish independence is supporting self-determination. Pro-British independence is xenophobia.

precisely.

Pro-Scottish independence is supporting self-determination. Pro-British independence is xenophobia.

Superb! 🙂

aracer – The issue is because of camerons weaknesshe would have to hold a referendum if the Lisbon treaty was amended to appease the Eurosceptics Thats why he vetoed it. Nothing to do with it being in the UKs interest

26 to one suggests he is wrong – and now we will get a agreement among the 17 not the 27 weakening the UKs position and damaging the UKs national interests

Is it better to be on the outside pissing in or the inside pissing out?

Do you really think that Wallace and Balls-up fancy being in charge at the moment? Leave aside whether they are competent or not!!

MM given your open minded description I really do wonder what your view is of their competency..cheap slurs are pointless

this tax would ensure that the Uk would contribute 35-40% of the total tax revenues for the great European black hole

do the UK own all the banks now that are based here- you are being disingenuous with that point as you are with “black hole” is this an
economics term?.
You need to say 35-40% of the tax will be raised from transactions that occur within the UK part of the EU free market. This revenue is a result of privately owned companies conducting business in the EU. It is not the UK doing it – it is privately owned companies
Obviously this does not appeal to the masses and the Bulldog spirit quite as much as your quote.