[D66] UK Liberal Democrats pledge support for coalition over EU summit crisis

[Antid Oto]

UK Liberal Democrats pledge support for coalition over EU summit crisis
By Julie Hyland
15 December 2011

A key worry for British commentators following Prime Minister David Cameron’s
vetoing of treaty changes at the European Union summit was the impact on his
coalition with the pro-EU Liberal Democrats.

The fear was that, in addition to Britain being reduced to a minority of one at
the summit, the government itself could fall.

When Deputy Prime Minister and Liberal Democrat leader Nick Clegg chose not to
attend parliament Monday while Cameron defended his use of the veto as necessary
to protect the City of London, such concerns appeared well-founded. His
non-appearance came after Paddy Ashdown, former Liberal Democrat leader, and
several other party figures attacked Cameron for leaving the UK isolated in Europe.

Matters were not helped by the fact that the sizeable Eurosceptic wing of the
Conservative Party was hailing Cameron as a conquering hero. Despite reportedly
being warned not to overdo the “triumphalism” out of respect for their coalition
partner, several could not contain themselves. Senior Tory Sir Peter Tapsell
summed up their mood in parliament, declaring his “admiration and full hearted
support” for Cameron’s actions at the EU, while querying smugly whether the
summit had “achieved anything of strategic value to protect the threatened
European banking system? Without the long delayed and still unpromised massive
support of the European Central Bank and the Bundesbank the euro is doomed and,
as chancellor Merkel has said, the EU with it.”

Eurosceptic backing for Cameron is, however, a double-edged sword. Encouraged by
his veto, and by the on-going crisis in the eurozone, they are stepping up
pressure for a referendum to be held on Britain’s relations with the EU. This is
something the prime minister is desperate to avoid for several reasons.

In the short-term at least, Britain’s ruling elite do want to “save” the
eurozone out of the same “national interest” that Cameron defended at the
summit. Britain’s banks are heavily exposed to European sovereign debt, which is
why the UK—along with Washington—has been pressing for the European Central Bank
(read Germany’s Bundesbank) to act as the “lender of last resort”.

They are also the most vociferous backers of the policy agreed at the EU summit
to turn the whole of Europe into a giant austerity zone, as the bourgeoisie seek
to utilise the crisis to destroy jobs, wages and social provision across the
continent.

Britain’s coalition government was the first to deliberately pioneer such a
strategy in Europe—unveiling, as soon as it took office last May, the most
severe spending cuts since the 1930s. A referendum, which could expect majority
support for withdrawal from the EU, would collapse the government and
potentially disrupt the austerity drive “at home”.

That is why the Financial Times editorialised that “it would be a huge setback
for Britain if the coalition collapsed. The achievement of this government has
been to keep a steady financial ship in the middle of a market storm. A break-up
could throw that to the winds and sink a UK economy that is already listing.”

As it is, Clegg’s non-appearance had the character of political theatre, aimed
at placating discontent within his party’s ranks. The Liberal Democrat leader
said he felt it was best that he didn’t attend parliament, so as not to cause a
“distraction”.

Clegg has no intention of collapsing the coalition. In the first instance, this
would be an act of political suicide. For years the party had postured as a
“left” alternative to Labour—opposing the Iraq war, denouncing university
tuition fees and championing so-called “Social Europe”. In coalition, however,
it has supported the imperialist intervention into Libya, tripled tuition fees,
and defended austerity, with the result that its electoral support has collapsed.

The Liberal Democrat’s former defence of the EU is just another “red line” the
party is more than ready to cross.

Not merely rank political opportunism is involved. The Liberal Democrats support
the punitive “fiscal discipline” measures now to be meted out against workers
across Europe. But they are just as opposed to proposals by Germany and France
to restrict trade in euro-denominated financial transactions to the euro zone,
which directly threatens the pre-eminence of the City of London, and which led
to Cameron’s veto.

That is why Clegg agreed to Cameron’s strategy at the EU summit when he was
telephoned in the early hours of Friday morning and told there would be no
protections for the City in any treaty changes.

Former chief secretary to the Treasury, David Laws, said the differences between
his party and the Tories were “tactical”, regarding the “consequence of not
having other allies in the European Union who we can rely upon”.

This was also a concern for Britain’s banks and corporations, Laws said, who now
faced the risk of “having the rules… set by other EU nations without our
participation.”

Liberal Democrat Deputy Leader Simon Hughes was explicit: “There is no risk to
the coalition”, he said. “We came to an agreement in the national interest...
because we knew the country needed us to sort out the economy. That’s why we did
so.”

While Labour leader Ed Miliband complained that Cameron had produced a “bad deal
for Britain”, it was again solely on the grounds that the prime minister’s veto
had failed to prevent EU plans and had left the City of London exposed.

As Cameron pointed out in response, for all the Labour leader’s “sound and
fury”, he had failed to say if he would have signed the treaty being proposed.

With all the main bourgeois parties essentially on the same page, Britain’s
ruling elite is concentrating on building alliances within the EU to stymie any
changes that threaten its interests.

It is banking on the fact that the inter-governmental treaty agreed at the
summit has failed to come up with the necessary funds to satisfy the
international financial markets. As the euro continues to come under pressure,
with the threatened default, and possible exit, of a number of countries—most
particularly Greece—the British bourgeoisie hopes it will find new allies. In
addition, it is still far from certain that Denmark, Finland and the Czech
Republic will ratify the new treaty, and it is possible that Ireland will be
forced to hold a referendum that will almost certainly be lost.

EU officials have described Cameron’s actions in the most scathing terms. EC
Vice President Olli Rehn has warned that if the prime minister’s veto was
“intended to prevent bankers and financial corporations in the [City of London]
from being regulated, that is not going to happen.”

The UK government had supported “tightening fiscal and economic surveillance,”
Rehn said. As such, “The UK’s excessive deficit and debt will be the subject of
surveillance like other member states, even if the enforcement mechanism mostly
applies to the euro area member states.”

The deterioration in relations between Britain and France is especially noteworthy.

For days, politicians from all parties, supported by the media, have claimed
that Cameron was the victim of a “set-up” by French President Nicolas Sarkozy at
the summit. The French president had made clear that he wanted agreement on
treaty changes to be taken by the 17 members of the eurozone, with the UK
excluded. Sarkozy’s rush to convene an early hours press conference in Brussels
to attack British intransigence was seen as further proof that Cameron had been
outmanoeuvred.

Much is at stake for Sarkozy, who faces elections, and the French bourgeoisie as
a whole. While rating agencies are threatening to downgrade France’s credit
ratings, Sarkozy has so far been unable to persuade Germany to agree to allow
the ECB to act as Europe’s guarantor, and thus shore up French banks.

Subsequently, Sarkozy provocatively announced that the summit marked the birth
of a “New Europe”. “There are now clearly two Europes,” he said. “One that wants
more solidarity between its member states and more regulation. The other which
is interested only in the logic of the internal market.”

Sarkozy’s claims are bogus. The only “solidarity” involved in the
inter-governmental treaty is the pact between Germany and France to impose the
diktats of their banks and corporations against the European working class.

But at the European Parliament, Joseph Daul, a member of Sarkozy’s Union for a
Popular Movement, argued that the UK should be stripped of its EU rebate in
retaliation for Cameron’s breach in “solidarity”. When challenged, Daul laughed,
“Don’t worry, we’re not coming with tanks and Kalashnikovs [to Britain] before
Christmas.”

The deterioration in relations between Britain and France speaks to the powerful
centrifugal pressures now building up in Europe, with far-reaching implications.
It is only a matter of months since the two countries were allies in the
imperialist intervention into Libya and signed a defence co-operation agreement
to share military resources.

http://wsws.org/articles/2011/dec2011/coal-d15.shtml