A suicide pact is like Jamestown at the end its road; you drink the poisoned cool-aid willingly, or you're helped to overcome the weakness. Attempts to leave the club at such a time are resented.
Predictably, many European commentators took out their frustration on David Cameroon, after he vetoed changes to EU regulations last week. As I mentioned in an earlier post, the British were seeking unique protections for the financial activities in London, and can be legitimately criticized for that, however, that's not the main issue take up by critics like the German magazine 'Der Spiegel' sugguests that Cameroon's decision would backfire at home and abroad.
Indeed, EU is moving to sideline and even to punish UK for its independence, and in UK there is strong polarization between Euro-philes and Euro-spectics/Euro-phobes. However, a poll taken in UK after the veto shows conservatives have benefited from standing up to EU, despite taking their stance over selfish financial reasons.
The prediction for domestic unpopularity resulting from Cameroon's distancing UK from EU appears to have been wishful thinking on the continent. What about the reality in EU? EU ratified a new union, based on stronger set of rules by 26 nations; everyone besides the UK.
Below: Mercozy (Angela Merkel + Nicolas Sarkozy) were all smiles about their tighter union last week.
'Der Spiegel' hurried to proclaim the formation of a 2-speed Europe, implying no doubt that the new, stronger union would move at a faster speed, and outdistance UK. The rest of the article seems to belie this hope; it admits political costs of the fracture, as well as the fact that additional regulations don't help the immediate problem - dramatic escalation of borrowing costs in the EU. There have already been wealth transfers to Ireland, Portugal and Greece that were never imagined by the Germans and the French when they ratified EU treaties. That's the point - the rules needed to be amended, on the fly. The initial rules, in fact, the union itself, were not very well thought out. Who has the confidence that European leaders came up with a sound resolution under this time pressure, one that will not backfire?
According to the reasoning that I've been laying out on this blog, the European Union is deeply, fundamentally flawed, and should be abandoned. The loss of face for the bureaucrats is one of the reasons preventing that from consideration until all other options are explored, including running the risk of a messy joint bankruptcy.
Leadership of a cult that has lost a member, directs full fury on the traitor, but also tightens the bonds that bind its remaining members. It both ways the response of EU to individualistic, selfish concerns of UK mirrors the attitude found in Jamestown, after several members escaped.
Not only is new regulation not dealing with the immediate underlying financial crisis, it seeks to resolve imbalances in trade between members of EU through the most unlikely method of expecting the Italians and Greeks to produce like the Germans, they present the newly-forged chains that bind the collective more tightly together as evidence of its impending success.
The markets appear to know better, than the delusional EU leaders, and the euro has plunged again today to multi-month lows.