Cameron the Clueless, Merkel the Merciless

Speaking at the Lord Mayor’s banquet in London, Mr Cameron’s fiery rhetoric on Europe appeared to be in contrast to the concrete policies being hammered out at Ms Merkel’s party conference in Germany.

Mr Cameron complained: “How out of touch the EU has become, when its institutions are demanding budget increases, while Europe’s citizens tighten their belts.” Mr Cameron was complaining about the cost of the capital transfers that pay for roads and bridges in Eastern Europe, building their productivity and sustaining their economies during these difficult times. If he thinks that the political trend in the EU is to have less government and less intervention, then he should listen to the Germans and think again.

On the same day, Ms Merkel told her party, “The task of our generation now, is to complete the economic and currency union in Europe and, step by step, create a political union. It’s time for a breakthrough to a new Europe”.

Meanwhile in the UK, Mr Cameron seemed to be applying the complaints he has about the British economy, to the EU: a so far failed belief that an attack on red tape will act as a stimulus for economic growth. “It’s the pointless interference, rules and regulations that stifle growth not unleash it.”

Ms Merkel told her conference: “Through the crisis, Europe is growing closer together, and Europeans are discovering that decisions taken in one country can have enormous impact on the rest of Europe”. It didn’t look like they were “growing closer together” in friendship, when she was shouting at them. I think “growing closer together” must mean the rest of the Euro area knowing their place.

Mr Cameron seemed more interested in flowery rhetoric than substantial policy. As the leader of a country that has seen its economy take a dive since his party’s election, and regardless of the UK having substantially lower growth than the Eurozone states, regardless of our devaluation, and regardless of not being a Euro member, he still managed to lecture that, “Unless we all get a grip on growth, the European Union will remain an organisation in peril, representing a continent in trouble.” In the circumstances, that quote must be regarded as meaningless.

It now seems that the Germans were always ready to bail out other Euro members, but only on the condition that they would put in place policies that fix the structural weaknesses of their economies. Having forced out the leaders of Italy and Greece, they now seem ready to talk about their plans for a fully-fledged European monetary fund, along the lines of the IMF. Finance Minister, Wolfgang Schäuble, said: “We now need to build the political union we never managed to build in the ’90s.”

Mr Cameron almost seems to be speaking about himself when he speaks of “an abstract end in itself”. He told the Lord Mayors dinner, “The EU is somehow an abstract end in itself, immune from developments in the real world, rather than a means of helping to deliver better living standards for the people of its nations”.

Has Cameron followed what was going on during the recent crisis meetings and at the G20?

It is now apparent that Germany’s refusal to bail out the offending countries is a far more carefully laid plan to get reform out of them. We should have a much better insight into this business, but our man, Cameron, who was there in the room, doesn’t seem to be aware of the thoughts of the main actor.

In the same meeting when Sarkozy shouted at Cameron to “Shut up”, Merkel looked to our Prime Minister and said that she believed that the EU did need reform, as if she was throwing him a bone. The problem is that she never included him in her strategy. In their private meetings, one has to wonder if she didn’t just nod politely as he spoke his woolly words of wisdom. Did he even ask her of her intentions, or did his arrogance get the better of him, preferring to give her a lecture, without any idea that she was already streets ahead?

It’s not just that he wasn’t important enough to be confided in; it’s that he doesn’t seem to have the intellectual capacity to read between the lines, even when he is in the room where the world is being reformed and reorganised around him.

Throughout these events, there has been a lesser sense of crisis in Germany. They have been accused of not taking the matter seriously. The British complain of short-termism, while fearing the day to day markets, but the Germans prefer to ignore the markets and stick to the fundamentals, rightly understanding that the long term is what matters. Reports that the Germans simply don’t understand the situation are now looking absurd. All along, they’ve been planning a carve-up that puts them firmly in control of a political and economic union. All along, our Prime Minister has been oblivious to what’s happening around him.

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