10 december 2011, exit, stage right ?

The real question of the latest "make or break" euro summit is whether it was enough; to which paul krugman's answer is no; while mine is, yes - until the next step is needed. All the news though in the uk is about david cameron's "thatcher moment", although even the iron lady never actually wielded her veto, although she bitterly regretted it after signing the single european act of 1986. Years ago, when I started this website, I wrote that the uk's "sustained ability to punch above its weight, economically and diplomatically, is finally ebbing." This weekend may well turn out to be a step in that direction, as however much we invoke some magical realism about the special relationship with washington, or why asians invest here, or why london is an international banking centre, today that is all directly leveraged from our role as bridge to the heart of europe. It is a remarkable feat of diplomacy that we have maintained that despite not joining the euro, but that stretched elastic may just have snapped. It was foolish of merkozy to ever have imagined a cameron absent from the centre right caucus in marseilles (having pulled out of the european people's party), was ever going to agree to the deal cooked up there; or maybe they didn't. It was equally foolish of cameron to ever think he could successfully blackmail them with a switch on the politically-toxic topic of financial regulation from majority voting to unanimity; or maybe he didn't. None of the trio are foolish, and so the more likely explanation is weariness, above all from a european mainstream that had been prepared to allow a semi-detached britain access all areas, as long it seemed to be bending over backwards to play the game. Cameron needed to avoid at all cost any treaty at all, as despite any legal niceties that could be cooked up, the momentum towards a referendum would have become irresistible. The save our financial markets manoeuvre was just a cause to go down fighting for, but despite the oddity of risking all to save probably the most unpopular group of people and institutions in the land, the battle of britain pose is a domestic political plus. There will though be many more scenes before the epilogue is actually written. Talk of a treaty by march may be the line, but the last treaty took ten years from start to finish. Fiscal rules may sound wonkish, but tax and spend is the heart of government and neither narrow nor technocratic, and so it may be the right thing to do, but it isn't going to get done without a whole lot of debate. A referendum in ireland has never been avoided before, and it's not going to be avoided now; and they'll be twenty other battles too in the long months ahead. All that gives time for the uk to reflect, and perhaps even find a way to help, because ironically nothing is actually being asked of london at all, just to let the others move ahead. If we deny them that, they'll never forgive us - and nor would we deserve it.