Wednesday, May 19, 2010

Same old, same old

It appears that the colleagues in Brussels are all breathing a collective sigh of relief because the new Conservative (well, ConLib) Prime Minister, Foreign Secretary and Chancellor of the Exchequer have turned out to be not so eurosceptic after all. In fact, they are all bending over backwards engaging constructively with the European project (of which this country is part).

Take the Chancellor of the Exchequer, Georgy-Porgy Osborne (well, OK, I'll take him). He has been engaging constructively with the Ecofin by obsequiously going early to the meeting and launching a charm offensive. Those of us with slightly longer than average memories (i.e. beyond last week's media coverage) can recall the charm offensive launched by John Major after the eurosceptic horrors of the Thatcher government and the even bigger charm offensive launched by Tony Blair after the eurosceptic horrors of the Major government. I shall be grateful to any reader who can furnish me with examples of achievements by those charm offensives.

The immediate outcome of Mr Osborne's charm offensive, apart from all those sighs of relief from the colleagues, has been Ecofin's agreement, in the teeth of British opposition to new rules for hedge funds.
Instead the chancellor was praised by EU colleagues for taking a constructive approach, which ended up with finance ministers agreeing to "note the concerns expressed" by the UK, which hosts 80 per cent of Europe's hedge funds.
Well, as long as they noted the concern shown by the country that hosts 80 per cent of Europe's hedge funds, everything is all right. Apparently, the FT sees nothing wrong with the fact that the country with 80 per cent of those hedge funds not only cannot control the regulatory structure but cannot even make its views heard properly among all the other countries, who are all contributing to the control though not to the hosting of the funds. As this blog said over and over again: the real government is in Brussels, regardless of who might win the election.

So, what have we got in return for the charm offensive: ah yes, those concerns have been taken note of and Mr Osborne tells us that there is still much to play for. This, if memory serves (and it does), was the constant refrain of various governments in the past as they surrendered one power after another.

Mr Osborne is clearly going to be spending a great deal of time in Brussels, which is right and proper in the circumstances.
He may be back in Brussels on Friday fighting on another front, this time opposing a suggestion by the European Commission that national budgets be submitted for prior scrutiny by other EU member states. "National parliaments must be paramount," he said. "I'm perfectly happy to discuss details of the Budget with the Commission but only after it has been discussed in parliament."
National parliaments are hardly paramount now. If they were rules passed in Brussels about hedge funds would not matter. Still, it will be interesting to see whether Mr Osborne's charm offensive continues with the same success.

Then there will be other occasions for that constructive engagement:
Rather than fighting a last-ditch battle over hedge funds, Mr Osborne wants to keep his powder dry for a much bigger debate next month over plans to create an EU-wide regulatory system for financial services.

A review of the next seven-year EU budget will begin later in the year, putting Britain and France on course for their regular battles over farm subsidies and the UK's budget rebate.
Oddly enough I do not recall any mention of these battles and opportunities for the charm offensive mentioned during the election campaign or those much-touted TV debates. UKIP, whose leader did talk about the creeping control of the City, was sidelined during the last two weeks of the campaign by the media as it concentrated on the three main parties.

There is, however, one group of people on whom Mr Osborne's charm offensive was wasted: the hedge fund managers. Well, what do they matter? Only the people who bring business and income to this country.


  1. has an idea...

  2. Sigh. That is not an idea. Why do we need any constitution for Europe? Once you have a constitution you acknowledge that it is one political entity, which is what it ought not to be. I have said this before so it seems pointless to keep posting that link.