Will Britain Pay to Save the Euro?
David Cameron also has a referendum problem. Britain’s current government uneasily combines euro-skeptics and euro-enthusiasts. Two weeks ago, 81 Conservative backbenchers broke with party leaders to vote in favor of a new referendum on Britain’s EU membership.
Cameron had promised such a referendum when he was in opposition, but he has abandoned that commitment in his coalition with the euro-enthusiast Liberal Democrats.
The Prime Minister was able to beat back the back-bench challenge with Liberal and Labour votes. Yet he still faces trouble ahead.
Cameron’s recent statement that any increase in Union capabilities be coupled to a clawback of exclusive British authority over employment and social policy did not represent the government’s position, just the Tories’ views.
This puts Cameron in a very moderated place as to the debt crisis, as it is very likely that some additional Union-wide capabilities will be proposed. His Chancellor, George Osborne, both by Britain’s position as a Union member state with its own currency and his recent statements that Britain will not help directly with the bailout, has relegated the Cabinet to cheerleader status for Greece to take the proposed bailout deal. If Cameron is exhorted again to shut up about the euro by President Sarkozy, he may find it politically convenient to oblige.
Thus, what Cameron says he will insist upon may not be what his coalition can agree to, and a choice between causing heartburn in his party or bringing down his government over Britain’s status in the Union is in the offing.
At home, expect the Liberal Democrats to use the on-off Greek referendum fiasco to demonstrate that popular referendums are trivial and unnecessary. And elsewhere, expect the eurozone states to exploit the growing fissure in the government to get more British contributions for the Greek bailout despite Osborne’s current stance and acquiescence in deeper Union financial controls without either a British referendum or any “clawback” of existing powers. Cameron fails if he succumbs to either attempt.
