The FT had some harsh words for David Cameron.
"Mr Cameron’s coalition is now in a lose-lose position. If the eurozone fails in the effort to rescue the single currency, Britain will be caught in the ensuing economic tsunami. If the euro is eventually saved by the creation of a fiscal union, Britain will find itself marginalised in European Union decision-making in areas pivotal to its own prosperity."
Is that really an accurate description of Britain's current predicament?
True, if the Euro fails, Britain will be caught in the "economic tsunami." But that observation is rather superficial. In or out of a fiscal union, there is nothing that Britain can do to save the Euro. Economically, Britain isn't big enough to alter the fate of the single currency. It could perhaps contribute some cash to bail out Southern Europe. That generosity would weaken our finances to bankroll the fiscal irresponsibility of others. Moreover, it would be a big ask, especially as other Eurozone countries - notably Germany - aren't ready to offer any substantive fiscal transfers.
Nevertheless, we aren't helpless victims waiting to be drowned as waves crash onshore. We have an independent currency. This puts us in a far better position to mitigate the consequences of a Eurozone collapse. To maintain our monetary independence, we had to isolate ourselves from the rest of Europe. We had to stay out of the single currency. Sometimes, isolation is preferable to collegiality.
Then we come to this old canard about influence. What is the true value of influence within the EU? Over the last fifteen years, our partners have conjured up a profoundly unstable single currency, which now threatens to destroy every economy from the North Atlantic to the Black Sea. European economies are over-indebted and over-regulated. Economic growth is anaemic; European banks are on the verge of collapse, and everyone thinks they should retire at 50. Did any British government ever persuade our continental partners to stop screwing things up?
By staying out of the European Fiscal Union, we maintain the right to influence our own fiscal policies. We could, for example, cut corporate income tax, and make our economy the most attractive in Europe for foreign investment. We could also decide to go on a borrowing binge and pile up a public debt stock that would embarrass Italy and Greece. Whatever we decide, the choice is ours.