After Greece – where now for Cameron’s negotiating?

DC&DT in Bxl
David & Donald

Donald Tusk has improved his English lately, which may have something to do with his employing of an Ulster-born speech-writer. The former Prime Minister of Poland took-over from Herman “damp-rag” Van Rompuy as the President of the Council of the EU last year, this was the job once sought by Tony Blair, but no British candidate had been in the picture this time around. Tusk made an executive decision in the early hours of last Sunday morning to cancel the planned EU summit on the Greek situation, opting instead to solve the issue via the informal Eurogroup. And it’s reported that in the early hours of 13 July he told the Prime Ministers of Greece and Germany as they headed for the door;
                       “Sorry, but there is no way you are leaving this room”

But the meeting that had the effect of keeping Greece and Germany in was also keeping others out. Settling the matter via the Eurogroup that brings together the 19 finance ministers of the countries which spend the Euro, rather than a formal Council summit involving all 28 EU Member States meant that the biggest issue facing the EU in a decade, was being decided without 9 of its members and its second largest economy, the UK.

It was France’s President Hollande who rode to the rescue at the eleventh-hour championing attempts to keep Greece on-board. It also shows that while the EU’s bureaucracy has expanded becoming more open and transparent, some of Europe’s biggest deals often get done behind closed doors between national ministers.

However David Cameron and his government remained largely outside negotiations saying that this was a Eurozone issue and therefore ‘nothing to do with us’. This has been symptomatic of Britain’s approach to Greece, the reason usually given is that the UK is not in the Eurozone as well as suggesting (accurately or otherwise) that the level of exposure to British banks over Greece is comparatively low. In fact most official Foreign Office statements regarding Greece have been simply been confined to advice for tourists.

This approach would have seemed to have suited the Prime Minister and his current tests by which his renegotiation of EU membership. The statement presented by Cameron at last month’s European Council summit laid-out his four tests for renegotiating British membership of the EU, namely: sovereignty, fairness, competitiveness and immigration. The first, third and fourth all relate to familiar topics in British relations with Brussels but it’s the second-one that is most at tested in the Greek crisis, it was described:

“As the Eurozone integrates further …we need to make sure the interests of both those inside and those outside the Eurozone are fairly balanced. That in many ways is the key to what I’m trying to achieve. This organisation, the EU, has got to be flexible enough to have people and countries that are in the Eurozone, to feel comfortable with their membership and countries that are not in the Eurozone to feel that their membership is in their national interest too. That is the key. We need a settlement that recognises while the single currency is not for all, the single market and the European Union as a whole must work for all”

One influential Tory MEP told just a few days ago that this of all the four would be the most decisive and the one in which the most work will be required to secure the kind of deal that Cameron and his government want to sell to the electorate come the referendum day (now likely Autumn next year).

But it hasn’t been plain sailing for this plan in the last seven days. Last Tuesday the Commission floated the idea of using EU funds (from all EU members not just to Eurozone) to pay for “bridging loans” to help with Greece’s bailout, this would have meant using up to £850 million from the UK. Westminster cried-foul with Chancellor Osborne laying-out exactly what he meant by fairness:

“Britain is not in the euro, so the idea that British taxpayers will be on the line for this Greek deal is a complete non-starter. The Eurozone needs to foot its own bill.”

But by Friday he’d backed-down, admitting to the use of the fund. He did claim it was a victory, however, due to an agreement that it wouldn’t happen again in the event of default. This was reminiscent of last October’s refusal to pay the Commission a total of €2.1 billion (£1.7 billion), after which ended-up paying anyway a few weeks later.

Brussels must have felt it was cashing-in on Cameron last week, as on Thursday it was announced that despite having opposed the appointment of Jean-Claude Juncker as Commission President last year, the UK would be contributing €8.5 billion (close to £6 billion) to his brainchild investment fund, making it the biggest single contributor in the whole EU.

“Fairness” is a word which usually resonates well with voters of all shades of opinion in the UK, a ‘go-to’ word to justify policies on just about anything. However it’s a word that often defies translation into many European languages and it seems that as a concept it may prove difficult to yield the right results for the current government ahead of the referendum. Tusk, Juncker, Merkel and others, might need some more lessons.