EN / He got it wrong

Over the weekend, the debate was dominated by the British PM's Thursday night decision in Brussels. Rightly so.

Britain decided not to engage with new EU financial measures. Sadly for the country, by "national interests" the Prime Minister understands the interests of EC3, EC4 and a few others neighbouring City of London postcodes. By rejecting taking on some of the European fiscal risk, Britain has altogether given up the chance to steer the ship cruising around the continent. Whether it sinks or not, it is out of British hands now. Either way it goes, it will surely affect London as severely as every member of the eurozone.

As the Economist's column Bagehot correctly pointed out, David Cameron did not veto anything, unlike the media may report it:

"In my version of the English language, when one member of a club uses his veto, he blocks something from happening. Mr Cameron did not stop France, Germany and the other 15 members of the euro zone from going ahead with what they are proposing. He asked for safeguards for financial services and—as had been well trailed in advance—France and Germany said no. That's not wielding a veto, that's called losing.

Despite what you may read everywhere, it is not austerity but reality that Europe has to face these days. It is not about a hardship and tough recovery measures. It is about getting back to the basics. At least in theory and wishy-washy statements, I can agree with Chancellor George Osborne.

Importantly, no-one should forget that the blame game easily backfires. Consumerism and consumption that led Southern Europe to keep borrowing to an unsustainable level are not naturally rooted in Mediterranean societies of Spain, Italy or Greece. Go to their quiet countryside and all that you can see is a modest and peaceful lifestyle. Unless, of course, you end up in tourist resorts packed with foreigners.

The drive to live cool and trendy, but with some lazy and reckless habits, was exported from no other place but the Western front-runners - the UK and the US. They should take a part of the blame.

How did that happen? Spreading entertainment, music pop bands, licensed TV shows and dramas, top-level sport with the football Premier League as its major product, fashion and high-life, Europe's South was encouraged and motivated to catch-up and live that way - "spend more than you earn" by effectively borrowing heavily. As controversial as it sounds, there is a clear impact of the former on the latter.

Even if Cameron is determined to punish those who took the risk and lived beyond their means in Southern Europe, and arguable a few would share some of his views, why isn't he consistent and does not also punish banks and financial institutions that allowed the whole debt spin to start in the first place? Instead, British PM rewards them by providing safety nets against a new European legislation emerging from the Brussels Agreement. Double standards?

Surprisingly, not many commentators recognise a possibility of Cameron's ill-judged decision leading to an unintentional downfall of his own government. It is now down to the Lib Dems to assess whether they stand for their values - probably the most pro-European amongst all major political parties in the UK - or the opportunity to govern, as they already showed with the vote on raising the university fees.

Yet, Cameron may still have an ace up his sleeve - a bargaining chip that his government could play with in order to gain what he lost in Europe. It is Asia and emerging markets there. It is a scenario that I have not come across yet in comments and reports in the aftermath of Cameron's new policy on Brussels. Otherwise, I have no option but to agree with Will Hutton that the Thursday decision was "an act of crass stupidity". Prove me wrong.

Reading recommendations:
Bagehot: "Britain, not leaving but falling out of the EU";
Will Hutton: "David Cameron's act of crass stupidity on Europe";
And, for the sake of balanced views, something from one of my favourite academics, Niall Ferguson: "Great Britain Saves Itself by Rejecting the EU".