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February 3, 2012 / politicsbitesize

The EU U-turn and the IMF

The PM in the House of Commons. Image from the BBC website.

Yet another EU Summit was held in Brussels at the end of January (Monday 30th), only this time it wasn’t heralded as a meeting to ‘save’ the Eurozone; perhaps there have been too many of them recently. This gathering of EU leaders, including David Cameron, was called so that they could try to tackle jobs, growth and financial instability. Unlike the last get-together in December 2011, when Cameron vetoed the fiscal compact treaty, discussions ran smoothly. However, by the time Tuesday morning rolled around the dialogue between the British Prime Minister, his rebel backbenchers and the opposition was rather awkward.

David Cameron has been accused of undoing all his ‘good’ work with the veto by seemingly doing a U-turn on the use of EU institutions. Back in December he opted the UK out of any fiscal pact with the European Union and also pledged to block any of the remaining 26 States* from enforcing the treaty using EU institutions (such as the European Court of Justice). But it was revealed that in a phone call to the President of the European Commission, José Manuel Barosso, David Cameron made it clear that Britain would no longer block the use of the ECJ when enforcing the treaty. It is this U-turn that has peeved his Eurosceptic backbenchers and delighted Labour.

Nadine Dorries, the Conservative MP for Mid Bedfordshire, on Eddie Mair’s Radio 4 programme PM, Tuesday 31st Jan, maintained that she was proud of the Prime Minister when he came back from the summit in December because he:

had stood up for Britain’s interests; he had said no to a financial tax being imposed on the stock market and the city of London and stood aside … and not become involved in the plans of the other 25 countries to impose that tax and have this fiscal pact.

However, now that the PM has performed a U-turn on his veto she, and the other backbenchers who were supporters of David Cameron’s decision, are very ‘disappointed’. The rebellion of 81 MPs, Nadine Dorries included, took their decision with a ‘heavy heart’, but felt that they had been vindicated by the Prime Minister’s use of a veto in Brussels. Now, though, their disappointment is palpable and they are concerned about what will happen going forward. Nadine states:

The Prime Minister has now basically lost the capital, the good capital, that he bought amongst his backbenchers … and I think that when he comes back to the House because the IMF want more British money to provide to the countries, the Southern European countries, which are failing, he is not going to get that. He is not going to get the support from backbenchers to give more British money to Europe.

So it would appear that once again David Cameron is stuck between a rock and a hard place. His Deputy, Nick Clegg, has been charged with building bridges in Europe and it has been suggested that the Prime Minister is now doing as he is told with regard to the EU. Whatever the truth of that, the question hanging over the PM is when the IMF call for more money to help out the Eurozone, will Britain fall short? This question was put to David Cameron in the House on Tuesday 31st January by Bernard Jenkin, the Conservative MP for Harwich and North Essex, to which the response was:

… we are founder members of the IMF and strong supporters of it as an institution, but that the IMF must always lend to countries, not currencies; that we would not be part of an EU bail-out fund; that we would take part only if other countries came forward too; and that that would happen only after eurozone countries and eurozone institutions had done what they needed to do to stand up and support their currency.

This statement is, at best, ambiguous. According to the Prime Minister then, Britain will lend only if other countries lend too but we would not be a part of an EU bailout, although we might if they get their act together! Perhaps, then, there is method in his U-turn on the use of EU institutions to enforce a treaty. If the EU ensures that the treaty is legally binding then it will be seen to be standing up and supporting its currency, which in the long run means the IMF will get the money needed from other countries such as Britain. Bravo, Mr Cameron: it seems you are a master at pleasing the right people all of the time!

*It should be noted that the remaining 26 member states have bypassed the Prime Minister’s veto and voted in favour of a fiscal pact. This point was raised by Mr Bernard Jenkin, the Conservative MP for Harwich and North Essex, in the House of Commons on Tuesday 31st Jan 2012.

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