We’ve recently been led to believe by critics and advocates alike, that the UK is reaching a point from which it cannot turn back. It must either leave the EU and single market altogether, or it must adopt stricter policies, and give up more control to the Union. Recent developments however, have suggested that this just isn’t the case, and that a third, more moderate path is entirely possible, and entirely likely.
A stubborn performance from UK ministers and the Prime Minister has meant that central control has been further put off. There were plans for 17 of the EU member states to dictate financial legislation for the whole group of 27 countries. This was unacceptable to the UK government, who managed to prevent any further progress. The unified banking union is still in the pipeline however, so it will be interesting to see how British ministers deal with its potential.
Britain accounts for more than a third of Europe’s wholesale financial market, so the ability to have control over its own finances is of course desirable, and some might argue essential. You can expect Britain to continue pushing for less EU control, though this does not mean that they want a complete separation.
The main opposition for the unified banking system is of course that it would mean the UK’s financial rules would be set by countries not using the same currency. There is a fear that there would be a question of priorities.
In October, it was agreed that the European Banking Authority could not discriminate between countries that do and do not use the single currency. There will be separate voting, and both parties must agree before anything can be passed. Again, this is yet another piece of evidence for the fact that the UK will not give any ground to the ECB, but it has no intention of leaving either.
What is very interesting is that the UK certainly recognises the need for the EU to remain strong, and it appears as though David Cameron has some support for the idea that those countries using the euro could, to some extent, form a super-state
Recent strengthening in the Eurozone has meant that those trading currency pairs
which involve the EUR have seen the currency edge upwards, though Greek problems are still restricting progress. This includes the pound dipping slightly against the euro in the past couple of days.
The UK is clearly looking for a more flexible approach to its involvement in Europe. It wants to take part when it is benefited, but remaining separate means that it has better control. There is obvious discontent with the idea from European ministers, but it appears that the UK is currently in the driving seat. It has no desire to either leave or submit to more control, and there is very little anyone else can do about it. Cameron has conceded however, that the decision will ultimately lie with the British public.