David Cameron's speech on the future of the UK's relationship with the EU was meant to be delivered on 22 January, a highly significant day in the history of European politics with it being the anniversary of the Elysee treaty. Needless to say this has been moved, so that the relationship between the UK and the continent was not made even more awkward than it already is. He may be caught between the 'rock' of his conservative progressivism and the 'hard place' of the bevy of Eurosceptic back-benchers, but Cameron's message should be clear; we stay inside the EU.
Firstly, the UK's economic footing is by no means secure enough for us to even hint at an exit from the EU let alone actually go ahead with it. While our debt/GDP levels are relatively good by EU standards, factoring in the amount of household debt elevates this level to one of the worst globally. The Chancellor's plan to retool the UK economy via "a march of the makers" has failed spectacularly despite the support of a central bank that has been in the business of weakening its currency for the best part of four years.
The argument that the UK will come under further rule from a 'United States of Europe' is also fear-mongering of a childish level. Monetary policy unity enforced by the ECB can survive if the pace of the fiscal reconciliation within in each member state also continues. The political will to keep the status quo and not mutualise debt in Europe seems to be at a high point, and, alongside improving financial conditions for the region's banks, this allows the foundations for future prosperity to be settled as they are, without a centralised office in Frankfurt sending down befehl from on high.
That is not to say that the EU is by any means perfect. A union of countries that was set up to help the weakest has instead acted as a feeding pond for the strongest. Germany benefits from its industrial prowess and has been stealing productivity from other eurozone economies for years. A more equal, not a smaller, Europe is what is needed.
This can be solved by deepening investment within peripheral Europe in digital services, renewable energy, and improved agriculture. Greece cannot fight Germany on cars and high-tooled machine parts so why bother trying?
The speech comes at a difficult time for the PM. The UK is likely to lose its AAA rating following a poor Q4 GDP release next week, while the current deficit reduction plan looks to be no longer be fit for purpose. These issues would not be a problem had they not been exclusively tied to each other as an indicator of progress. In doing so, the political pressure will be more crushing than the economic or market reaction.
This is not an argument calling for complete integration. The clans of 'In or Out' spasming with each cough of anti-EU bile are part of an old squabble. 'Opt-outs', which fell by the wayside in the early days of the Labour government that came to power in 1997, provide the UK with its own back pocket veto. Anything else reduces our bargaining position.
As much as the Europhiles like to applaud the impact of the EU on trade, the old reasons of containing the march of political extremism are no longer valid and a new EU will evolve from the current crisis. We may not like them, and they certainly don't like us at the moment, but isn't that what international relations are about anyway?
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