One of the great doyens of nineteenth century British foreign policy Lord Salisbury could turn a phrase or two. Speaking of Britain in the 1870s he may well of been speaking of Europe (and the British bit of it) today when he said “…the commonest error in politics lies in sticking to the carcases of dead politics…we cling to the shreds of an old policy after it has been torn to pieces, and to the shadow of a shred after the rag itself has been torn away”.
The Banquoesque ghost of Lord Salisbury stalked Chancellor Merkel and Prime Minister Cameron in their 18 November Berlin talks. They talked of “decisive action” and of “working together”. Far from the making of strategy the talks were in reality about the mutual covering of domestic political rear-ends. My sources tell me a deal was done by which Cameron would accept some change to the Lisbon Treaty in Germany’s favour in return for a relaxation for Britain of what is known as the Working Time Directive. Berlin has thus provided London with a political fig-leaf to cover yet another British retreat. Berlin was thus non-business as usual, Euro-inertia at its very worst. More toy bazooka than big bazooka. Indeed, given the scale and nature of the struggle with the Dark Lords of the Market Universe, the meeting was little more than the strategic equivalent of re-arranging deckchairs on the Titanic. Britain out, Germany up, Europe nowhere.
On Friday night I attended the annual dinner of the Oxford and Cambridge Society of the Netherlands and I saw yet again the strategy-free malaise at the heart of the Euro-Aristocracy. The speaker was a senior British-born judge at the European Court of Justice. After making the usual sad ‘it’s all Britain’s fault’ apologia to impress his Continental friends he suggested that had Britain joined the Euro a) the project would have been strengthened (perhaps); and b) that Club Med would have found it far harder to have broken the rules (no way). My Continental colleagues of course gratefully accepted his offer of British guilt; pass the buck is one of Europe’s less endearing qualities. The white flag of surrender had been raised for the price of a free dinner.
However, his remarks did for me raise two fundamental questions. How do we break out of the Euro-inertia and dead politics that are killing effective crisis management? What would it take to get all EU member-states working together towards something like a credible solution? Now, I am neither an economist nor a politician, which is probably just as well given the mess that has been created by the marriage of dismal science and dismal appliance. What I am is an historian and strategist; I understand failure and thus the need for a change of plan. Put simply, we need to shift the centre of gravity of this crisis from the Euro to the single market and how to make it work better.
Plan B for Europe would have three basic elements: First, a new crisis leadership group is needed to foster fiscal discipline, political unity of purpose and leadership legitimacy. Chancellor Merkel should have insisted that in this existential crisis confronting all twenty-seven EU members it is vital London joins Berlin and Paris. It would be leadership overseen by a new Special EU Council of Ministers to replace the proposed Eurozone organiscramble that came out of the 26 October summit. For too many years France and Germany have actively excluded Britain from their EU leadership tryst. For too long the British have pretended that what happens on the Continent has ‘nuffing to do with us, guv’.
Second, the creation of a bad sovereign debt bank would buy time for the debt recovery and thus give all-important growth a chance. 50% of all Club Med debt would be placed in this off-shoot of the European Central Bank to be guaranteed by the northern and western European taxpayer and overseen by the new Special Council of Ministers. The International Monetary Fund (IMF) would also guarantee this bad debt bank. The new bank would probably also have to include some Belgian, Irish and dare I say French and British debt and must thus be seen as a long-term structural change to the Union, requiring an amendment to the Treaty on European Union to which London should agree.
Third, strict new rules for all Euro members are needed allied to a mechanism for the suspension of any member-state that breaks them from either the Euro and/or the single market. The creation of technocratic governments in Greece and Italy whilst expedient must be seen as mere stepping stones to a democratic future committed to sound financial governance. Technocracy is an alluring danger in Europe. What matters is that democratic governments better adhere to rules and thus avoid a repetition of this disaster. That means meaningful and credible compliance across all twenty-seven EU members.
As an Englishman who pays his taxes to the Dutch state I am willing to make the necessary sacrifice for the common good. However, before I do so I need to be convinced that my money will be used to work a sound plan of action and not simply despatched down yet another profligate black rhetorical void beloved of the self-serving Euro-Aristocracy. Critically, Plan B could see Britain stay in the EU. The alternative is that London permanently accepts second-class status within the EU, even as it remains the second highest net contributor. Neither the French nor Germans would ever countenance such injustice. Millions of my fellow Britons would bring down a British government rather than accept that…and I would be amongst their fold.
Cameron and Merkel missed a trick in Berlin. What is needed is real, radical and concerted action. What we got is more dead politics.
Julian Lindley-French is Eisenhower Professor of Defence Strategy at the Netherlands Defence Academy, Fellow of Respublica in London, Associate Fellow of the Austrian Institute for European and Security Studies and a member of the Strategic Advisory Group of the Atlantic Council. He is also a member of the Academic Advisory Board of the NATO Defence College in Rome. This essay first appeared on his personal blog, Lindley-French’s Blog Blast.