Follow Us

Follow us on Twitter  Follow us on LinkedIn
 

16 December 2011

FT: False assumptions underpinned British strategy


Default: Change to:


Following numerous interviews with participants, this FT analysis gives an account of the full story behind Britain's 'veto' of the EU Treaty.


Safeguards and secret preparations 
In the early hours of Friday December 9, Mr Cameron defiantly vetoed proposed EU treaty changes because they did not contain his required “safeguards” for the City of London. Conservative eurosceptics and most UK voters were delighted. Ms Merkel “jumped late”, as the British predicted. But she sided with the French. As dawn broke over Brussels, Britain stood alone, as 26 Member States peeled off to form a pact outside the EU treaties.

To some, the UK miscalculation came in pushing on treaty change for the City of London – a protocol allowing the City to snatch back power for national regulators – and failing to sell this to its allies. When Ms Merkel offered help, she was largely in the dark about what Mr Cameron wanted. For most of Britain’s allies, and even its own most senior diplomats, the secrecy would remain until the eve of the summit.

Some unnamed Whitehall figures have blamed Sir Jon Cunliffe, Mr Cameron’s summit “sherpa” and soon-to-be ambassador to the EU, for failing to prepare the ground. But in reality it was Mr Cameron and William Hague, the UK foreign secretary, who decided on tactics. They wanted the bid to be kept secret from two potential adversaries. The first was Mr Cameron’s hardline eurosceptics, who want an EU referendum and repatriation of powers. The second was France, for fear that as the demands were circulated, Paris would seize on them and use them to discredit Britain’s position, claiming Mr Cameron was trying to protect the villains of the financial crisis at the expense of the eurozone.

Shopping lists, existential issues 
Mr Cameron opted to trim his demands. Looser EU labour laws and an “emergency brake” on all financial regulation were scratched off the shopping list – evidence that he was not set on a wrecking strategy. But crucially, he would insist his concessions were written into the treaty. It is unclear whether Mr Cameron was aware of the warning lights flashing in the Whitehall machine. From Paris, too, came warnings that Mr Sarkozy was intent on a weaker, intergovernmental pact. Others in Whitehall said a breakaway pact would quickly snowball to cover most EU members. José Manuel Barroso, the anglophile president of the European Commission, its executive arm, pleaded with Mr Cameron to “keep it reasonable” or risk fragmenting the union.

Berlin, meanwhile, was warning London not to overdo it in pushing Germany. Nikolaus Meyer-Landrut, Ms Merkel’s Europe adviser, was given early sight of the City protocol and said it went too far. After a flurry of Franco-German diplomacy, a common position took shape: if the British did not temper their demands, a deal would be done without them. Days before the summit, German officials said their “pessimism was more pronounced” – words intended as a clear signal to London.

When did Ms Merkel give up on Mr Cameron? The exact point is unclear. Senior European and British officials believe it was at the European People’s party summit – a gathering of all the main centre-right leaders in Europe – in Marseilles on the morning of December 8, just hours before the EU summit began in Brussels. Ms Merkel’s shift was evident behind closed doors. She said an intergovernmental treaty remained her Plan B, but it now appeared the most likely outcome.

At 7.30 that evening, the British, French and German leaders crammed into a small French delegation room overlooking a giant air vent on the roof of the Brussels Council building. The British had no reliable intelligence from the Marseilles meeting and nobody from Paris or Berlin had tipped off Downing Street about what was going on; Mr Cameron was in effect ambushed. Flanked by Mr Hague, the prime minister watched stony-faced as the German chancellor said: “This is terrible – this is an existential issue for us. We can’t go your way”. She told him an exemption for the industry that caused the financial crisis was politically impossible.

It was 2am before Mr Cameron finally made his pitch to the summit. By then, the leaders had discussed details of the fiscal pact for five hours; most of them were already tired. Mr Cameron cast his safeguards as minor tweaks. Mr Sarkozy was characteristically blunt. “David, we will not pay you to save the euro”, he said, according to one account. He went on to rebuke Helle Thorning-Schmidt, the freshly elected Danish prime minister, for the temerity to speak up for a deal at 27. “You’re an out, a small out, and you’re new. We don’t want to hear from you”, Mr Sarkozy said.

At this crucial point, Mr Cameron stopped using the BlackBerry with which he had been communicating with advisers. His team outside was cut off. An offer was made, initiated by Mr Barroso, to insert treaty language to protect the EU single market. Mr Cameron would not budge, readying for tough negotiation.

After little more than 20 minutes, a veto declaration came, not from Mr Cameron but from Herman Van Rompuy, the Belgian who as president of the European Council chaired the session. There was no vote. With little warning, Mr Van Rompuy closed the discussion of treaty change at 27, saying the UK could not be accommodated. Following a short break, Mr Cameron played his final card: refusing to let EU institutions support an intergovernmental treaty. His bargaining position relied on Hubert Legal, the aptly named head of the Council legal service. At a summit preparatory meeting, Mr Legal’s advice stressed the constraints on a pact outside the EU treaties. But his advice to the summit had a different emphasis. Two ambassadors in Brussels insist Mr Legal’s views were not contradictory, merely nuanced. A senior EU official at both meetings says Mr Legal “did not [change his] mind at all”. But British officials are unconvinced.

Mr Sarkozy was adamant the deal had to be settled before markets opened. There was a scramble to agree a communiqué – detailing potentially fundamental changes to fiscal sovereignty – in the middle of the night under absurd time pressure.

Downing Street insiders admit British interests in Brussels have been damaged – as Mr Clegg has warned. But they say that Mr Cameron ran a bigger risk – and faced a bigger clash with Europe – if he came back from Brussels with a deal that was later wrecked in the House of Commons.

Even committed europhiles in the government admit the outcome may not be as bleak as they feared. Diplomats are still scrambling to pin down basic details of the pact, ranging from what the pact covers to whom it applies to. Several countries face political problems over ratification. Old allies are expressing second thoughts about leaving Britain in the lurch. Points of leverage remain – particularly over the role of EU institutions in enforcing any treaty – and Britain could still be part of a deal to “integrate” the pact into existing treaties.

Full article (FT subscription required)



© Financial Times


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment