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I apologise for banging on about a referendum. But the subject simply won't go away.

By Paul Goodman
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Last week's summit didn't save the Euro

“Right now, there is not much more than a blank sheet of paper", Petr Necas is quoted as saying in the Financial Times (£) this morning.  The words of the Czech Republic's Prime Minister are a reminder that British Euro-sceptics are not isolated - to use a current word - in pointing out that last week's summit produced nothing of substance.  It was intended to save the Euro.  There are plans devised to do so.  These do not propose fiscal union - a logical though not sensible solution to the currency's problems.  They are the Maastricht criteria revisited: measures that France and Germany themselves flouted first time round, and that if implemented are most unlikely to save it second time round.

The PIIGS are like a sick man who is being asked to compete in a race.  The summit's prescription is a strict diet (austerity) without vitamin pills (fiscal transfers - in other words, hard-working German family businessmen paying higher taxes to subsidise moonlighting Greek civil servants).  The doctor in charge will no longer be directly accountable to the patient: the budgets of national governments are to be vetted by the EU institutions.  This plan must now be forced through the parliaments of Europe.  The result will be protest and riot - and, potentially, the overthrow of governments and perhaps democracies: after all, the technocrats are already in charge of Greece and Italy. 

The tide of events is thus sweeping the Government...

But even if these measures pass, there is no mechanism to enforce them.  There would be if the plans were agreed by the 27.  But they are not: they have been agreed by 23 (The Czech Republic, Hungary, and Sweden have not endorsed them, so in this sense Britain is not out on its own, in so far as this matters.)  They cannot be enforced by the EU institutions without Britain's consent - or at least not without political and legal dispute, if our own Government so wills.  The verdict on the plan will be delivered not by politicians but by the markets.  It has neither disinvented the credit rating agencies or rescued the debt-ridden banks.  Sooner or later a country's ratings will be downgraded or a bank will go bust.

The Prime Minister believes that "banging on about Europe" could destroy the Conservative Party.  Who can blame him for this, given its story during the past 25 years?  But whether he is right or wrong is irrelevant: the simple fact is that there is now nothing else to bang on about - nothing, in any event, that will so command media coverage, given the depression that now threatens Europe and the crisis that now convulses the EU.  The prospects for a referendum are being transformed.  Six months or so ago, the only practicable scheme for one was an in/out poll - a device supported by a small proportion of MPs.  There was no plan on the table for the repatriation of powers.  The prospect of a referendum on one was therefore remote.

...Nearer to conceding a referendum

There is still no such proposal.  But a referendum on one - or on in/out - does not look nearly so distant now.  If Greece or other PIIGS leave the Euro, the EU in its present form will end.  And whether they do or not, Cameron cannot now turn back from the course upon which his own veto has set him (at least, not without losing control of the Parliamentary Party and destroying his reputation for leadership).  I explained in October why the Prime Minister might eventually be left with no alternative but to concede a referendum.  Almost half of Conservative backbenchers have already voted for one.  The Times (£) reports this morning that some are plotting another vote soon.  If Ireland has a referendum, pressure on Downing Street will rise.

Oakeshott believed that the task of government was not to steer the ship but to keep it afloat.  This view is controversial.  But part of the art of politics for Ministers is undoubtedly for them to look as though they're steering it - to seem to be in charge.  They neither are at present - how could they, given the pace of events? - nor appear to be.  Anyone who cares to can feel the pulse of the water and surge of the tide beneath the boat.  It is carrying Cameron and Nick Clegg where they would rather not go.  It is drawing Britain far closer to a referendum than it was six months ago.  But I am no longer quite so sure that in the event of an in-out poll the Prime Minister would campaign to stay in.  After all, we don't know what will remain for us to stay part of.


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