Cameron's Euro triumph

British Prime Minister David Cameron's refusal to endorse the fiscal straitjacket proposed by the EU to resolve the Euro crisis may seem to be at odds with the Tory insistence on fiscal austerity, but it is intelligible in the context of his party's higher allegiance to London's financial markets.

Jeremy Seabrook

PRIME Minister David Cameron's refusal to sign up to the European Union's fiscal stability pact in Brussels in December was viewed by a majority of people in Britain as a 'triumph.' Sixty-two percent thought he had indeed stood up for Britain and shown that 'bulldog spirit' which his backbenchers had urged him to exhibit. The popular press treated him like a public school playground hero confronting 'the bullies of Europe.' 'One Brave Man Faces Down 26 Deluded Nations' was the headline of the Mail on Sunday.

After the initial euphoria, recriminations soon set in. How could he have exercised a 'veto' over a fiscal compact which will go ahead anyway, whether supported by 26 or 27 of the countries in the EU? Deputy premier Nick Clegg, until now the ever-compliant arachnid of the ruling coalition, spinning clich‚s for every occasion, at first declared Cameron's 'red lines' at the Euro-summit modest and reasonable. The fury of his Liberal Democrat Party soon caused him to modify this reaction, and he swiftly adopted a pose of sorrow, saying he was 'bitterly disappointed' with Cameron's impetuosity.

Just below the surface in Britain still flows the toxic sludge of an imperialist, xenophobic past, always ready to surface where the ideological crust is thinnest. Before his visit to Brussels, the rhetoric of 'appeasement' was aired once more, and Cameron was warned by the Tory Right not to come back waving a piece of paper. Munich and Vichy were invoked. The spectre of German control of Europe, talk of the Fourth Reich, was followed by the story of Cameron standing alone, as Britain had done in the Blitz, showing we can take it. The elasticity of the memory of World War Two knows no limits: it can be evoked even after 70 years to inform contemporary debate, fresh as ever, a precious garment preserved in tissue paper in the wardrobe of history, to be put on by the remote descendants of its original wearer.

Cameron, despite his presentational skills and his extensive experience in public relations (his only job prior to his political career), has something of an older Tory dilettantism in the hands-off style of his premiership. He has not taken the trouble to establish personal relationships with the leaders of Europe. His frequent U-turns on policy suggest a temperament ill-suited to mature deliberation and reflection. Some sympathisers described the outcome of the meeting in Brussels as somehow 'accidental.'

Protecting the City

It is significant and highly symbolic that the ostensible sticking point was the 'safeguards' Cameron demanded for the City of London, the financial services industry, which is now said to earn for Britain between 8% and 10% of GDP, almost as much as manufacturing, towards which Cameron and Clegg had declared a determination to 're-balance' the economy in what they called 'the march of the makers.' That the City and the financial services sector were at the heart of the crisis which started four years ago, has not dented the Conservatives' love of Big Money, and their readiness, despite the much-advertised 'reforms' recommended by the Independent Commission on Banking (themselves more stringent, according to Treasury Secretary, the Liberal Democrat Danny Alexander, than anything threatened by Europe), to appease, not the ghost of Hitler which the popular press sees in the steely Angela Merkel, but the financial markets, whose higher jurisdiction is now the ultimate global court of appeal for all human  affairs.

Cameron's refusal was all the more puzzling since the fiscal straitjacket proposed by the EU mirrors UK government policy. This ought to have caused the Conservative Party to rejoice; so why did he reject it in order to 'protect' London's financial services sector? His real fear was the 'financial transaction tax' to which Europe is committed (sometimes called the Robin Hood tax, or Tobin tax, after its originator), which would in reality have affected only a handful of hedge funds and overseas investment desks of banks, and amounts to a small fraction of such deals (0.1% in stock and bond trades, 0.01% on derivatives).

If such a modest contribution to the wellbeing of the states in which they operate is enough to drive financial services to jurisdictions in which such taxes do not apply, these should be permitted to retreat to those distant havens, together with their personnel, who will surely not repine for the derisory amenities of a forsaken London. The argument of the British government that it would agree to such a tax only if the rest of the world also accepts it, echoes older controversies over child labour or the slave trade, when it was believed that if we were to take a moral stand, everybody else would take advantage of our idealistic folly.

Deference to finance

Popular discontent with the bankers is widespread in Britain, but it is a largely symbolic and ritual anger, a passive, grumbling cynicism. There is good reason for this. The contemporary version of the politics of deference is no longer to birth or station, but to money. No one, in the words of the euphemistic phrase, wants to kill the goose that lays the golden eggs; this suggests that if you want the wealth, you shouldn't look too closely at how it is made.

The awe in which finance is held is real: the common wisdom is now that without the wealth creators nothing that we value in the world - not health services, education, the arts, the humanities, charity and philanthropy - can exist. Our very survival depends upon the manipulators of the arcane world of exotic 'financial products' and instruments. 'You can't do anything without money'; it is as though humanity had been laid under an enchantment, a paralysis, a sleep, from which awakening is possible only by the animating kiss of wealth. This is why the global Occupy movement, although numerically small, poses such a threat to the cumbersome apparatus of globalism: it hints that the real wealth of the world lies as much in the energies of the people and their capacity to make and do things for themselves and each other, in the free gifts and acts of charity of daily life, as in opaque mysteries of financial transactions in the impenetrable fortresses of steel and glass. 

Distrust of Europe, fear of Germany, an emulous contempt for France - these historical antecedents can always be mobilised in Britain. They remove the focus from the villainies of bankers, they obscure the curious transformation of the private debt of banking institutions into public liabilities, for which the people - especially the poor - will have to pay for the foreseeable future. This displacement of blame by ruling elites is a fine art in Western political, financial and social affairs. The disgracing of politicians over the MPs expenses scandal in 2009 was another example. Their truancies were small compared with the epic gambling and malversation of bankers, but it was more acceptable to rock the foundations of democracy rather than those of the financial system. It was more convenient too - MPs are exposed to public wrath, while bankers live in an exalted empyrean into which few ordinary people stray, and are therefore untouchable in their remote hideaway.

That Cameron chose to conciliate the Tory Right - at the risk of terminal damage to the coalition - shows that this was indeed a political preference. It was not forced upon him. In any case, the whole summit, advertised as 'the last chance to save the euro', was hyperbole. The agreement of 26 countries to proceed without Britain on their quixotic rescue mission, contributes nothing towards the actually existing problem. The fiscal compact is designed to make sure that 'never again' (those fateful words) will such a crisis arise. It is for the future; a prophylactic against the next time, and a hope that the decisions taken will calm the bond markets, assuage the turmoil, satisfy the unbiddable appetites and caprices of money. In any case, it destines the economies of the European Union to a long period of deflation and possible recession. It would be an irony if the next few years show that Cameron has, despite himself and his instincts, had a narrow political and economic escape.

The drama in Brussels was essentially a piece of theatre to convince the markets that European financial governance is sound, that the supranational currency is intact and the eurozone a functioning entity. So important is this task that even democracy - the great prize which the West offers as the surest guarantor of peace and prosperity to the whole world - can be suspended in the appointment of 'technocratic' governments in Greece and Italy, technocrats usually being 'non-political' appointees, retirees from the very banks and financial institutions which caused the crisis in the first place.

Business as usual must be restored; this involves honouring the most dishonourable debts, a return to economic growth, austerity stretching into an indefinite future for the majority and the conservation of wealth where this is already concentrated. As long as the City is protected, like some feudal citadel or sanctuary, standing against the wreckers of Europe, behind the glittering and unfordable moat of money which financiers and bankers award themselves in their heroic resistance against a ghost army that would assault the stronghold and expose Britain to a real world obscured for so long by the fantasies of a defunct imperialism.

It has been suggested by Eurosceptics that a Britain outside of the European Union, with its flourishing financial sector, might become 'like Switzerland'; a country described by French writer Andre Gide as 'a hardy rose-bush without either thorns or flowers'. Perhaps a more fitting parallel would be Britain as another Norway, but with neither oil nor midnight sun.                            

Jeremy Seabrook is a freelance journalist based in the UK.

*Third World Resurgence No. 255/256, November/December 2011, pp 12-13