As each new Euro crisis breaks, it's becoming harder for Cameron to claim business as usual

by Paul Goodman

In a rational world, there'd be a international financial rescue for Europe's stricken nations.  Portugal, Greece, Ireland and Spain would leave the Euro, and parts of their debt would be written off.  However, as Peter Oborne indicates in his Daily Telegraph column today, we don't live in a rational world.  He quotes Nicolas Sarkozy's remarks about his and Angela Merkel's view on the Euro - that they will “never, never… turn our backs on the euro… We will never let the euro go or be destroyed.”

Britain is about to pay part of the price of prizing ideology above sense.  Open Europe estimates that the taxpayer may stump up over four billion euros - all at a time when family budgets are being squeezed and spending increases on public services are being scaled back.  Oborne suggests that there's no alternative, writing that Britain "will be legally obliged to make a very significant financial contribution when the Portuguese bailout comes" (but that we should take steps to reduce our exposure to European debt).

The Daily Mail agrees.  However, Daniel Hannan says that "we should simply refuse to join in any bail-out and dare the European courts to challenge us".  Bill Cash wrote yesterday on this site that "Now that the whole issue is under review, the Government should insist on the repeal of the existing mechanism and if not the new mechanism, which requires a Treaty change, should now be subjected to a referendum."  John Redwood agrees that the Government should carve lines in the sand at the coming EU summit.

David Cameron's view is easy to guess.  The pain of the public spending scaleback will start to be felt in earnest next month.  Britain's armed forces are in action in Libya, the Yemen and Syria are seething, and no-one knows what will happen next in the middle east.  Above all - in narrow political terms - the AV referendum date of May 5 is hurling down the tracks.  He'll see the prospect of a EU-related row as a grinding distraction from all this - not to mention the Coalition's public service reform programme.

This has always been his take on Europe.  True, there were renegotiation proposals in the Party's manifesto, and Downing Street's dismayed by the malign impact of EU regulation on its reform programme.  But the Prime Minister and George Osborne were both special advisers during John Major's "beef war".  They remember it as all-consuming - draining the energies and purpose of a Conservative Government to the bewilderment of voters.  Furthermore, they'll see a Portugese bailout as a done deal.

To date, they've been able to contain Conservative rebellions on the EU.  But Tory backbenchers will remember the Chancellor indicating that Ireland was a special case.  Some of them are asking probing questions about the Libyan venture.  The outcome of the AV referendum is uncertain.  And - to strike a bathetic but telling note - it's too early to say whether the IPSA reform package will satisfy them.  As each new Euro crisis breaks, it will become harder for the Prime Minister to claim it's simply business as usual.