17 May 2012

Cameron speech – going down like cold moussaka

President Barosso has just told the UN in New York: “I bring you a message of confidence.” Well that’s all ok then.

Talking to various sources here and on the continent you get a powerful sense of Greece on the precipice. If there’s a bank run in Greece it may not reach the second election. One source said “the next week is very dangerous.” You could have a state of emergency called, elections suspended and another caretaker, technocratic government formed to serve until who knows when.

European sources might, as with the replacement of George Papandreou by a technocratic government at the end of last year, try to lend a hand to government formation. Who knows how that would end? One phenomenon that alarms Brussels is that liquidity the ECB has been passing on to keep Greek banks going seems to be held up by negotiations between the Greek government and their banks.

EU future hangs in the balance

If Greece gets to the elections, there are various possibilities. If Greece backs parties that are against the terms of the EU’s second programme of austerity, it’s not clear how much time there would be before the process of ejection from the eurozone came into effect.

Some see it being a hasty and very rocky exit. Others think it could be more protracted, managed and not chaotic. But you could get a coalition formed after the election which wants to stay in the Euro but wants to negotiate the terms. That could split the EU with France, Spain, perhaps Italy, supporting a relaxation of the fiscal straight-jacket for all; Germany, the Netherlands and allies saying no.

An informal gathering of EU leaders over dinner in Brussels next week was originally dreamt up as a “getting to know you, Francois” session for all the EU leaders who’d refused to meet Francois Hollande when he was running against Nicolas Sarkozy. Then it became thought of as a Spain crisis meeting.

Now people think they might just be in the middle of a Greek crisis as well as pondering a Spanish one. One thing we can be pretty clear on. David Cameron will not be thanked for his interventions yesterday (in the Commons) and today (in a speech in Manchester).

UK seen as ‘wishing eurozone ill’

The PM’s “make up or break up” lecture to his EU partners appears to have gone down like a bucket of cold moussaka. Some across the channel see it as combative, patronising and arrogant. No 10 aides talk of it being a rational intervention in the debate – if EU leaders like Chancellor Merkel have lifted their own omerta on talking about a possible Greek exit why shouldn’t David Cameron join in?

One Brussels watcher says David Cameron can’t refuse to join in bail out efforts (non-Euro members Poland and Sweden do) and then screech from the sidelines. One German source said the UK is sometimes seen as “wishing the eurozone ill” and speeches like today’s add to that impression.

Another veteran European Union watcher said the Cameron speech showed a complete ignorance of how you build up “soft power” – “this is not how you build up alliances and get favours … I wonder if anyone in the foreign office is speaking up or whether he’s just not listening.”

A government source says all this tetchy over-sensitivity from the continent is, well,  just that. No 10 believes that they do have a voice which can be heard in Europe – particularly if it is combined with the US and other voices. The timing of David Cameron’s appeal, they say, just ahead of the G8 gathering in Camp David, is no accident. He wants to recreate the pressure that the UK, the US together with China and others brought to bear on the Eurozone countries ahead of the Cannes G20 summit last autumn.

Tweets by @garygibbonblog

9 reader comments

  1. Citizen Smith says:

    The foreign office is not speaking up and even if they were he would not listening.

    Cameron is a loner if you look at what he does, a one man band, racing round the country meeting company directots and workers geeing then up….. dont see many of his colleagues with him do you…. except the occasional glimpse of his faithful deputy dog.

  2. les says:

    “One Brussels watcher” “Another veteran European Union watcher”

    Your sources are impeccable as usual!!

  3. John Jones says:

    Cameron is in a lose-lose position, precisely because he’s the British PM.

    We stayed out of the insane single currency project, thank God. Our Eurosceptics were completely correct about its inherent flaws, while the Eurofanatics here and across the Continent, who vilified people like William Hague for quite correctly pointing out the dangers of creating a single currency for such diverse economies and without any central fiscal control, have been proven catastrophically deluded.

    And that, perfectly understandably, irritates the hell out of them. After all, who likes being humiliated by events about which you were publicly warned years ago by people whom you arrogantly reviled at the time? Frankly, most of them don’t much like Britain anyway because of our traditional hostility towards the building of the European superstate. But every time our PM opens his mouth (in this case merely echoing this week’s comments on the likely Greek departure from various German politicians) what our Continental neighbours hear is an English voice saying “We told you so! We were right all along!”. Even if that isn’t actually what he’s saying, and it clearly isn’t, they’ll resent his…

  4. sue_m says:

    So across the channel they see him as combative, patronising and arrogant. Turns out the rest of Europe is just like us then.

  5. S Wight says:

    Would Gordon Brown be able to help sort it out?

  6. Saltaire Sam says:

    Cameron must be one of the most illogical prime ministers for years, though Blair runs him close.

    According to Dave, the financial mess he inherited was all down to the labour party, nothing to do with 2008 world financial meltdown.

    In contrast, the fact that the policies he said would produce growth have sent us back into recession is down to the weather, a one-day strike, the jubilee and especially, of course, the euro crisis.

    But if the euro is so important to us, why are we just standing at the side lobbing petrol bombs on to the fire? Why aren’t we helping to sort the mess that is likely to cause even more grief to our citizens?

    It’s nothing to do with us, we are not in the euro zone comes the reply.

    Yet, we were not in Libya and not threatened by the situation in Libya, but we still spent millions getting involved.

    I just wish for once the man would think through what he says and does instead of just reacting to please back benchers, lib dems, Daily Mail, Rebekah Brooks, banker pals etc etc

  7. John Jones says:

    Don’t worry. I just thought I’d make my first comment on a C4 blog. It’ll be my last. “Pending moderation” for hours then it completely disappeared. And since there was no bad language or offensive sentiment in there, other than voicing a Eurosceptic viewpoint that is clearly not widely favoured over at C4, I’m forced to assume that, as with the BBC for the same reasons, it’s censorship rather than simple incompetence.

  8. Marianne says:

    The states of Europe, including Spain, Italy and Greece, have existed for centuries without falling into bankruptcy. Until the last year or so, the common currency was working well, and the euro was strong against the pound and dollar at the height of the US and UK economic crises. The euro should be no handicap if the individual nations have sufficient economic and industrial liberty to pursue their own economic policies, drawing upon the strengths and particular demographic, geographical and cultural characteristics of their countries. Home-grown politicians should know what these strengths are. Why are ‘the markets’ being allowed to dictate the financial and economic health and prospects of nations? It is clear that most economists and financial ‘experts’ have little grasp of how companies and manufacturers develop their products, services and markets over the long term ‘The markets’ base their judgements on day-to-day changes in share prices, and their negative assessments then create a situation whereby share holders ‘jump ship’ for purely self-interested, as opposed to national, interests. ‘The markets’ are now ‘Big Brother’ – with myopia and too much…

  9. Marianne says:


    On the above subject, I would recommend Laurent Gounelle’s excellent novel, “The Gods Always Travel Incognito” and the Film “The Shock Doctrine” based upon Naomi Klein’s book of the same title. The first discusses the problem of ‘short-termism’ in companies, based upon an obsession with maintaining share prices at the expense of ethics and intelligent strategy, and the second explores the abominable consequences of globalisation directed by unscrupulous and completely unrestrained free-market vultures.

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