Charlie Elphicke MP: David Cameron stands strong on Europe
Charlie Elphicke is the Member of Parliament for Dover and a member of the Public Administration Select Committee.
Ahead of the EU Summit, David Cameron made it clear that his priorities were to support the survival of the Euro and protect the City of London. By sticking to his guns and refusing to give in last night he has shown real strength. Some say we should allow the Euro to fail – maybe even help it along – and that the repatriation of things like the social chapter is a greater priority than our financial services industry.
The Government’s first priority was and is to avoid the Euro falling apart. This is the right thing to do. The bottom line is that about half of our international trade is with the EU. We have more trade with Ireland than with the BRIC countries put together. If the Euro were to fall apart there would be serious economic dislocation. Commentators warn this would lead to a severe recession on the continent. Rather than the stronger economic growth expected at the back end of 2012, the UK would instead likely suffer a recession on a similar scale to 2008/9. A big downturn at a time when we are still economically weakened from the most recent recession is not a gamble any sensible Government would take. The Government is therefore right to do its best to help hold the Euro together. It may not be possible, but the Prime Minister has certainly done all he can.
Even so, many will ask why put the City ahead of the repatriation of things like the social chapter. A supply side reform like getting rid of the social chapter will take 5-10 years to bear fruit to boost our economy. More City regulation and the financial transactions tax would have a more immediate impact. Banks can switch their money flows and trading overnight. The impact would be to lose economic activity very quickly. We should protect our economy from a further downturn right now and we need those taxes to pay for schools, hospitals and help with the costs of bringing up our children. This is why it was right to safeguard the City in the immediate. Moreover given the Eurozone want to go ahead with such regulation on their own, it may turn out that UK financial services receives a boost, winning business from the Eurozone.
Many of us want shot of the whole European project in our hearts. Yet the Government must govern with a cool head. The key priorities at this time of crisis should still be to avoid the collapse of the Euro as this would hurt our economy and our people deeply. It was right to seek to avoid the immediate dent in our economy that the financial transactions tax and more City regulation would cause. Longer term we ought to prioritise increasing trade with the rest of the World so that we become less dependent on the Eurozone. Less economic reliance on Europe will give us a wider choice on the nature of the relationship we will have with the EU.
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