Banging on some more about Europe
Oh yes, the banks. The City of London is very important, and the EU has some bad ideas for regulating it. But I find it hard to cheer the idea that Mr Cameron took an extraordinarily big decision last night about our relations with Europe because he was so convinced he could not win arguments in Brussels about those regulations.
And what was Cameron trying to do? What was it that Cameron went to the mattresses over? Bagehot again, but quoting the Financial Times:
Mr Cameron insisted that any agreement to tighten fiscal discipline in the 17-member eurozone should not distort the single market covering all 27 member states. He also wants a separate protocol to protect the City of London from excessive EU regulation, including an agreement to let Britain enforce bank capital requirements that are higher than the proposed European maximum.
Other demands include an agreement that the new European Banking Authority should remain in London and protection from EU regulation of London-based US financial institutions that do not trade with the rest of Europe.
Mr Cameron also wants a written guarantee – making explicit what is already the case – that unanimity should apply to any proposed “user charges” for financial groups, including any variant of the controversial European financial transactions tax.
As seen above, Bagehot thinks this was a pretty weak bit of positioning from Cameron. Who on earth has he been listening to? Well here's a thing. When I read up on what actually happened at Brussels it fired a neuron. 'I remember writing about this before, ages ago' I thought. Tory policy on Europe has always been muddled by an inability to work out what our actual bottom line is - what points of principle cannot be negotiated away. In the aftermath (or anticipation, I think) of the final ratification of the Lisbon Treaty various bloggers were casting around for something to pin a solid Tory European policy on. Someone had a pretty good idea:
The tough fight is on financial regulation. In their dreams, half our EU partners would like to impose martial law on the City of London, under some French general in a képi. In theory, lots of EU financial regulations could be decided by qualified majority vote. Sane countries like Sweden say they cannot imagine imposing regulations on the UK against our will, because the impact on us is too big. Get that in writing: a political pledge from the other leaders that Britain has a veto on financial regulation affecting the City.
Good advice that, and it's pretty much exactly what Cameron did in Brussels. Whose advice? Well, the thing is that it was Bagehot's, back in the days when Bagehot was Charlemagne. I wonder what changed?