David Cameron Barked Up the Wrong Euro Tree

David Cameron Barked Up the Wrong Euro Tree

Could one do the right thing for the wrong reasons? Yes. Does it matter that it is for the wrong reasons? It does, if it shows a mindset from which other actions may follow that are wrong, uninformed and damaging. David Cameron sought, but did not get, a "legally-binding protocol to protect the City of London from more EU financial regulation". Consequently he vetoed the EU- wide treaty change to save the Euro. Accepting the change would have involved Britain "signing up for a deal conferring intrusive rights on European institutions to enforce budgetary policy in countries breaking the Euro's debt and deficit rules, as well as quasi-automatic penalties for delinquents". The democratic deficit implied in this is clear and I am glad he rejected the deal.

What I find puzzling is that Mr Cameron appeared content to cede sovereignty on tax, spend and borrowing policies provided the "City of London" was exempted from further EU regulations. He used the veto to protect the moneyed and powerful financial sector (the City of London) from regulations, and from the Tobin tax that is supported by 66% of the British public. It is the "light touch" regulation that brought the world economy to the edge of the abyss, and reforms are essential to prevent another collapse down the line. I suspect this is the reason for his isolation, and had he made the "straightjacket" of the Euro proposed by Germany as his core objection, he might have had more support in the discussions.

The government fixation with the city and financial services shows a delusional tendency in believing that financial services will forever be the main contributor to the British economy. The realisation has not yet dawned on politicians, and particularly those on the right of politics, that the era of financial engineering is over and the future belongs to real engineering: the application of science to the manufacturing of efficient quality products. To compete internationally they must be engineered to require the minimum amount of energy in their production, and must use the minimum amount of energy in performing the task they do. The enormous value added to hi-tech manufactured goods is the only sure way for Britain to employ its people, giving them a reasonable standard of living.

Larry Elliott in the Guardian compares the state of manufacturing in the UK with that of Germany:

"Germany's manufacturing output rose strongly in October and has recovered all the ground lost during the deep recession of 2008-09. Britain's factory production is still 7% below where it was at its peak in 2007, despite the benefit of a 25% drop in the value of sterling, which makes exports more competitive on world markets and increases the cost of goods and services imported into the UK. What's more, the recent weak performance is part of a longer trend. Traditionally, manufacturing has prospered in times of economic growth, but the five-year period of robust expansion leading up to the financial crisis of 2007 saw factory output flatline. There has been no growth at all in production since the late 1980s. British industry has been hollowed out."

Energy resources and their usage are likely to be among the greatest challenges that face humanity in the future. Fossil fuels are depleting, their use is environmentally harmful. Nuclear energy? Forget it; the Japanese tsunami saw to that. Harnessing green, safe, and sustainable energy, clearly, will assume greater importance in future world developments. British politicians would do well to exploit the expertise developed in the UK in this area. Spending money to bring systems from research into production would be a wise investment by the taxpayer in Great Britain plc. In rural Africa and Asia, micro power generation is the only feasible way of providing electricity for large numbers of people. Britain could be at the forefront of such development.

Now that, combined with manufacturing excellence, is a vision worth striving for whether Britain is in or out of the EU. Relying on the financial services sector will not cut it.

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