David Cameron's decision to veto EU treaty changes aimed at tackling the Eurozone Crisis have provoked concern and criticism from many at home and abroad. It is true that his actions could well lead to Britain being even more isolated from the rest of Europe than it already is. If the new-look treaty proves to be a success, and the Euro goes from strength to strength, this could have disastrous consequences. Yet the chances of that being the case look slim, as the changes fails to address any of the real issues behind the crisis.
In proposing budgetary control, and increased regulation and taxation on the financial sector, the amendments seem to be very much a case of shutting the joint chequebook after Greece has spent all the money. They provide solutions that may have been useful in preventing the crisis from occurring in the first place, but offer very little in the way of solving the problems that the EU is facing now. It is all well and good proposing hefty penalties for those who break deficit restrictions, but in the current climate, it's difficult to see how any penalty handed out to the struggling economies could possibly improve the situation in which they find themselves. Moreover, there is no attempt to address the underlying problem of the single currency - that it has brought together countries of different economic levels in such a way that the poorer nations are reliant on financial support from their wealthier neighbours, and those neighbours, in turn, are reliant on the survival of their economically weaker allies. It is already well-documented that the EU simply cannot allow Greece to default on its loans, and thus must continue to fork out billions of Euros to keep it afloat. This is not an issue that will simply disappear with time, but is a fundamental flaw in the system. Most worryingly, with Italy and Spain remaining alarmingly close to the edge of the financial abyss, the outlook is bleak should another nation require the kind of assistance that has been handed out to Greece, Portugal or Ireland.
It is true that David Cameron has taken a big gamble, and that, either way, he cannot really win. If, in the best-case scenario, the treaty changes are a success and the Euro goes from strength to strength, Britain will surely be left isolated in the shadow of the resulting European economic superpower. And if, in the worst case, the Euro does fail (which, at this point, looks considerably more likely), his veto will no doubt be blamed for contributing to its demise, and Britain will still face another financial crisis. But that crisis will not be as bad as the one we would be facing if we had signed up to these changes and the Euro had failed anyway. The revisions to the Treaty, in effect, tie the eurozone closer together, in such a way that if one nation goes down, all will be brought down trying to save it. At the same time, by failing to address the real crux of the problems facing the single currency, the amendments have not made this outcome any less likely. By remaining on the outside, Britain is at least safeguarding itself from being dragged down along with them, though whether it would be strong enough to withstand the after-effects is another matter entirely. Thus, faced with a very difficult decision, and under considerable pressure from his European counterparts, it would appear that the Prime Minister has stuck to his promise not to sign up to anything that would not be in Britain's interest. For that, at least, he should be commended.
No comments:
Post a Comment