The UK has no need to fear Germany. The UK has no need to be impolite to Germany. The UK should resist the temptation to lecture Germany on how to lead the Euro zone.
There are unwelcome signs that the UK/EU relationship is becoming strained. The Coalition government seems nervous about the impact of faltering economies on the continent, and concerned about recent policy moves. Germany and the EU seem annoyed at the UK government’s “grandstanding ” from outside the Euro, and insistence it should be in the room. The UK wants to play but does not want to pay.
It is easy for the UK to correct its part in the faltering relationship. UK Ministers could and should answer all enquiries on the state of the Euro, Euro bond markets and the like with the tedious but safe formula “We have no wish to provide a running commentary on the Euro”. They should not wish to undermine it. Nor should they be in the business of trying to buttress it. They should avoid comments that disagree with Germany on it, and comments which avoid disagreeing with France. As France and Germany disagree, that means keeping quiet.
What the UK government needs to do is to articulate strongly and clearly the UK’s wishes. This has to be in the form of a flexible approach depending on how the Euro area evolves. It is safe to assume that any fix for the zone entails much more detailed centralised control by the EU over Euro member states. No UK government could join it. We need to explain that we require a different relationship with the increasingly integrated zone.
The immediate threats to the UK are fourfold. The first is the attempt to establish extra territorial jurisidiction over UK financial markets, to exclude us from Euro business. This needs forceful rejection by political and legal means. The second is the rapid push to complete regulatory control of all financial activities in London by the EU. This too needs firm rejection by legal and political means. The third is the impact of EU energy measures on UK energy prices, which is becoming a major obstacle to retaining and growing industrial activity in the UK. Now the UK Chancellor has identified the issue, the government needs to take a remedy to Brussels for discussion. The fourth is the general burden of cost and complexity pushed onto the UK by the EU budget and regulations. The UK needs to seek powers and money back.
Just getting a vague promise of movement on Working Time is no longer sufficient. UK growth and prospects now depend on moving some of the roadblocks to growth imposed by Brussels. The UK government has to say it needs a renegotiation and it needs it now. It will put the results to the people in a referendum. That should get Germany’s attention. It is then up to them whether the UK votes on a package the people are likely to accept, or on the current deal. Polling shows 80% of the British people do not think the current deal is satisfactory.