‘No’ used to be the French prerogative in matters of European integration. Charles de Gaulle made a late career out of it. But perhaps the title is passing to Britain. David Cameron indicated yesterday that he would veto any EU banking treaty that did not safeguard the City, as James said he would.
Meanwhile, George Osborne joined Cameron in recognising that a European banking union, under design by ECB president Mario Draghi, is necessary if the euro is to survive. Angela Merkel agreed, saying that the answer to the present crisis was more Europe everywhere, only at a pace that suits weary German taxpayers.
This sedate approach is becoming unsustainable. Yesterday evening, ratings agency Fitch downgraded Spain by 3 notches on the grounds that European leaders, led by Mrs Merkel, lacked a ‘credible vision’. (Spain is poised to ask for an EU bailout.) The rating agency’s view is shared by the Chinese, who have said that they will buy no more European debt in the current circumstances. In Germany, Der Spiegel went on the attack this week, doubting that the German economy is sufficiently strong to weather the crisis alone. In this sense, the influential paper has joined Cameron and Obama in calling for Merkel to go further and faster now. Germany is increasingly isolated, both inside and outside the Eurozone.
David Cameron sounded a clear note of exasperation yesterday when he described as ‘nonsense’ Merkel’s belief that Europe would one day be united as a single national identity. It’s hard to gauge how far these summit outbursts are spontaneous or stage managed; but it is safe to say that if there is to be a Europe as Merkel envisages, then Britain will not be part of it. Indeed, judging by the reaction to the proposed banking union, Britain already appears to be on the road to second-class EU membership, if that.