What did Cameron veto?

Some people are saying that Cameron vetoed a NEW treaty – he did not.

The meeting on 9 December was to discuss the Merkozy proposal to reopen the Lisbon Treaty (Merkel’s preference, not Sarkozy’s) so as to reinforce the existing growth and stability pact mechanisms (as originally laid down in the Maastricht Treaty but routinely ignored by all members of the euro area – despite the EU Commission criticising most of them at various points).

Reopening a treaty requires the assent of all 27 signatories. That is what Cameron vetoed.

Cameron vetoed the proposal because he could not get the reassurances he sought. He did not walk out – or leave an empty chair as some people have claimed. Sarkozy rejected his request outright (i.e. he refused to negotiate on any of the points) and then proposed France’s preferred alternative – an intergovernmental treaty (outside the structures and strictures of the EU).

Cameron asked (inter alia) for reassurances that reopening the Lisbon Treaty would not distort the balance of the single market – he also asked for confirmation that a Financial Transfer Tax (which as a tax would need unanimous agreement) would not instead be imposed by QMV simply by calling it a financial surcharge.

Some people are saying that the reassurances were not needed because there was not threat of these things happening. However, if that were the case there would be no problem giving the assurances. The fact that the 26 could not – and would not give such assurances is a clear indication that the threat was in fact very real. DC was therefore right to ask for them – not to have done so would have been a dereliction of duty.

(The argument put forward by France that these reassurances would mean rewriting the terms of the single market seems hypocritical since they initially proposed re-writing sections of the Lisbon Treaty).

As for the idea that the 26 have now agreed the terms of a fiscal compact (stability union) – well that is still to be seen. No deal was done on Friday – other than the 26 agreeing to try to work out how to do such a deal without an EU treaty but with EU authority to enforce it – and by March 2012. For that, they may yet need the UK’s help.

The idea DC wants out of the EU is nonsense – he may be sceptical about the euro and the idea of ever closer political union but he remains, like many sceptics, a fan of the single market (which is what most people in the UK thought they were joining in 1975). He is also desperate for the euro to survive – though the proposal put forward on 9 December does little, if nothing to increase the chance of that happening.

Furthermore, the idea that the FTT is a ‘tax on bankers’ and will help close our deficit is doubly nonsense – since the FTT won’t affect bankers’ pay one iota and won’t be spent in the UK. FTT is a tax on transactions – the cost therefore falls on the investor (including many pension funds) either as an additional charge or by way of reduced performance. Furthermore, all proceeds would go to the EU to be spent on EU projects, not on UK schools and hospitals as some seem to think. So not only would the FTT make pensioners poorer (however marginally), it would also mean money leaving our economy and deepening our current account deficit. Now that can’t be a good thing.

Finally – hysterical ranting and name calling is no substitute for reasoned analysis of the facts.

Kind regards

Huw Sayer
@Huw Sayer

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