Fight Racism! Fight Imperialism! 231 February/March 2013

European Union and Britain

Cameron fuels ruling class divisions on Europe

Prime Minister David Cameron finally gave his much delayed speech on Britain’s relationship to the European Union (EU) early morning on 23 January at the City of London office of Bloomberg, the business and financial news corporation. He had planned to make his speech in continental Europe, following the tradition of past Tory leaders who had wanted to demonstrate that their views on Europe could command a serious hearing outside Britain. However, the already lengthy delay in his widely anticipated speech, the incompetence of his officials and the hostage crisis in Algeria all conspired to make this impossible. DAVID YAFFE reports.

Cameron has driven himself into a corner. He says that he is opposed to Britain’s exit from the EU, yet he is seriously damaging his relationship with other EU members in his fight to protect what he regards as the special interests of Britain. At the same time he must placate the growing eurosceptic wing of his own party, which sees those special interests best preserved outside the EU. With a deteriorating economy on course for triple-dip recession, underlined by a 0.3% fall in the growth rate in the last three months of 2012, and an economic strategy that is clearly failing, Cameron has attempted to unite his party, outflank UKIP’s anti-EU stance and put forward a populist standpoint which he believes will improve his prospects for winning the next general election. This situation has now forced him into announcing, somewhat prematurely, an in/out referendum on Britain’s membership of the EU by the end of 2017. How did this come about?

Last summer during an EU Summit on 28-29 June in Brussels, Cameron made it clear that Britain’s place was inside the EU and that he rejected out of hand an in/out referendum on Britain’s membership. This put him into immediate conflict with the eurosceptic wing of his party. Without delay he took steps to appease them in an article he wrote for the Sunday Telegraph (1 July 2012), in which he said that for him ‘the two words “Europe” and “referendum” can go together’. He indicated that he would consider a referendum on Britain’s future relationship with the EU. This only raised expectations and demands for further clarification. Cameron was not ready to offer this and attempted to delay a speech on these issues for as long as possible. Pressures built up and he announced a speech for 22 January in Germany. A strong objection was made by Angela Merkel, the German Chancellor, as this date clashed with the commemoration of the 50th anniversary of the Elysee Treaty that sealed the post-war reconciliation of France and Germany and laid the foundation for European integration. Cameron’s officials admitted they had no idea of the significance of the event (Financial Times 17 January 2013). The date had to be rushed forward to 18 January in the Netherlands. This, in turn, was cancelled due to the hostage crisis in Algeria and eventually a slot was found for it at Bloomberg in London on 23 January.

The speech had little in it that was not already known. Cameron said that if he won the 2015 general election he would renegotiate the terms of Britain’s membership of the EU, but he did not set out specific negotiating objectives, other than to say that ‘nothing was off the table’. He made it clear that he wanted a more flexible (neo-liberal) Europe with repeal of the current working hours directive, and a clawing back of EU powers on the environment, social affairs, and crime. He wanted protection of Britain’s rights in the single market as the eurozone bloc is developed and strengthened and although he did not mention the City of London in his speech – this has to be intentional – he has shown on many occasions his determination to protect the parasitic and speculative activities of the City of London from European oversight and regulation. Any new settlement based on these negotiations would be put before British voters in an in/out referendum on EU membership before 2017. He would campaign for Britain to stay in the EU. He refused to say whether he would campaign for Britain to leave the EU if the negotiations were a failure.

British imperialism and the European Union

After the Second World War the US was fully behind some form of European union, something that would ease its plans for dominating and developing a Europe complementary to US economic interests. It wanted Britain to be fully involved, firstly, as part of the process of easing the replacement of Britain as the world’s leading imperialist power, and secondly to ensure Anglo-US interests played a prominent role in developing the future European economy. Britain was in favour of European cooperation but only to the degree that it would not interfere with British plans to retain its status as a major imperialist power and the City of London as one of the world’s leading financial centres. Britain, therefore, would not accept that it should submerge its sovereignty in Europe. Neither did it want to see any kind of continental unity which would inevitably mean the domination of Europe by a single great power – such as a revitalised Germany. There have been various important developments since that period. Germany was unified after the collapse of the Soviet Union and is now, indeed, the dominant European power. 27 countries are at present members of what is now called the European Union. However the British attitude to Europe has not fundamentally changed.

In 1946 Winston Churchill made a speech in the University of Zurich calling for France and Germany to reconcile their differences and ‘build a kind of United States of Europe’. Britain, however, while giving support to such a development would not be part of it. Churchill’s view was best expressed in a Cabinet note of 29 November 1951.

‘I am not opposed to a European Federation including (eventually) the countries behind the Iron Curtain… But I never thought that Britain or the British Commonwealths should, either individually or collectively, become an integral part of a European Federation… We should not, however, obstruct but rather favour the movement to closer European unity and try to get the United States to support this work’.1

As European integration progressed, in January 1973 Britain eventually joined what was then the European Economic Community (EEC). Two previous applications to join were vetoed in 1963 and 1967 by the then French President, Charles de Gaulle, who regarded Britain as a Trojan horse for US influence.

In September 1988 Margaret Thatcher made her watershed speech in Bruges, Belgium, attacking certain developments in the EEC and calling for substantial reforms. However, while making clear her strong opposition to any European ‘super-state’, she nevertheless went on to say: ‘And let me be quite clear. Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community.’ John Major, as Tory Prime Minister, was harangued mercilessly by the eurosceptics in his Cabinet (he famously called them ‘bastards’) and party for what were regarded as his pro-European views. In a speech at Leiden University, the Netherlands, in September 1994 he made the case for a more flexible multi-speed Europe, and went on to give the British perspective on the then 12-member European Union. ‘It is quite simply that Britain is irrevocably part of Europe. We are hard-headed about it but perfectly clear. The British people know that their future rests with being part of the European Union.’ This reassurance is what Cameron offered in telephone calls to various European leaders in the days leading up to his Bloomberg speech.

A dangerous gamble

The contents of Cameron’s Bloomberg speech had been clearly signposted. Criticism came in thick and fast during the weeks before he gave the speech as well as afterwards. His political opponents accused him of putting the interests of his party before that of the country. Labour said that it is damaging to British economic interests to put a five-year question mark over membership of the single market. His coalition partners were even more scathing. LibDem MP Vince Cable, the Business Secretary in the Coalition government, said it was a ‘terrible time’ to raise the threat of Britain leaving the EU and a ‘dangerous gamble’ to renegotiate powers from Brussels. In a speech given in Oxfordshire on 17 January he said: ‘It will be difficult enough to safeguard UK national interests in the single market in an environment where the UK stands aside from closer economic and political integration in the eurozone. It could become next to impossible if the UK is simultaneously seeking to disengage from substantial existing commitments, especially if we are perceived to be blocking closer integration in projects we are not part of.’

The Obama administration waded in and took the unusual step of publicly briefing British journalists more than a week before the speech was given. Philip Gordon, the Assistant Secretary for European Affairs, said that there would be consequences for Britain if it left the EU or played a lesser role in it. ‘We have a growing relationship with the EU as an increasing voice in the world, and we want to see a strong British voice in that EU. That is in America’s interests. We welcome an outward-looking EU with Britain in it’ (Financial Times 10 January 2013).

Warnings to Cameron came before and after the speech from leading European politicians. Germany’s foreign minister, Guido Westerwelle, warned against Britain insisting on its national interests without an attempt to compromise: ‘a policy of cherry-picking is not an option’. Germany wanted ‘ambitious reforms’ of economic and monetary union to ensure the future of the euro but that meant ‘we don’t need less but more integration’. Angela Merkel’s reception of the speech was diplomatic. She welcomed Cameron’s stress on European competitiveness. But she warned that: ‘If the aim is to impose specific interests, every member of the EU has its own interests.’ She reminded Cameron that ‘Europe is a joint venture’. The French were uncompromising. Laurent Fabius, the foreign minister, pointedly said that he would roll out the red carpet to UK businesses if Britain left the EU (Financial Times 24 January 2013).

The large multinational corporations and businesses in Britain are generally pro-European and critical of Cameron’s policy, whereas small and medium size businesses on the whole give him support. Business leaders such as Richard Branson from the Virgin Group, Chris Gibson Smith from the London Stock Exchange, executives from Rio Tinto, BT and WPP warn Cameron that he risks damaging the economy by inadvertently taking Britain out of the EU if he seeks renegotiation of membership. The large car manufacturers, Honda, Ford, BMW and Toyoto are all agreed that Britain might lose out on investment if it had a marginal place in the EU and that discussing leaving a trading partner where 50% of your exports go makes no sense.

Perhaps the most telling point came from Anders Borg, Sweden’s foreign minister, and an ally of Chancellor George Osborne, who said ‘it would be very difficult to see London remain a financial centre’ if a referendum resulted in the UK’s exit from the eurozone. The City of London is highly integrated with European financial markets. It accounts for 74% of foreign exchange trading in Europe, 84% of Europe’s hedge fund assets and 74% of trade in OTC derivatives (Financial Times 18 January 2013).

Six years ago we said: ‘How long the British economy can sustain itself outside Europe, with Britain becoming more and more dependent on the parasitic dealings of the City of London, remains to be seen. The British ruling class knows that sooner or later it will have to make a choice between Europe and the United States. Whatever choice is forced on the ruling class, it is certain that any independent role of the City of London will be severely curtailed.’2 Cameron’s gamble is bringing this choice ever closer.

1 ‘United Europe’: Cabinet note by Mr Churchill, CAB129/48, C(51)32.

2 See David Yaffe ‘Britain: parasitic and decaying capitalism’ FRFI 194 December 2006/January 2007 on our website at