Britain | Bagehot

They told you so

The glee of Eurosceptics over the euro crisis is unseemly and dangerous

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AMONG historians who think Mao Zedong was mad as well as bad, it is common to cite his stated belief that proper revolutionaries should not fear nuclear war. The Chinese leader memorably shared this view with a 1957 gathering of world communist bosses in Moscow, alarming even that grisly assembly of toughs and killers. True, between a third and a half of the world's population might be killed in a nuclear conflagration, Mao breezily predicted. But with most survivors living in the socialist block, “imperialism would be razed to the ground”, and the world would belong to the Reds.

A similar fervour grips Britain's right-wing commentariat as they hail what they claim is the imminent collapse of the euro. In the Daily Mail, Daily Telegraph and News of the World, columnists have conceded that the unravelling of the single currency might involve such “messy” events as the bankruptcy of major European banks. But consider the upside, they urged readers. They see David Cameron picking his way through the smouldering rubble of Brussels to dictate to shell-shocked Eurocrats the terms of Britain's future dealings with the European Union. ConservativeHome, an influential website among grassroots Tories, asserted that having warned of the dangers from the beginning, Britain would have “enormous moral authority” in a post-euro Europe, and urged Mr Cameron to plan his demands now.

The mood among Conservative MPs is less shining-eyed and more sullen. Despite what one MP calls “mild panic” among the whips, George Osborne, the chancellor of the exchequer, escaped with a light roasting when he told Parliament on November 22nd that Britain would be contributing billions of pounds to a rescue package for Ireland. He would not say how many, perhaps because—once bilateral loans are added to International Monetary Fund and EU transfers—the Treasury fears that Britain's final liability could end up a couple of billions higher (or, less likely, lower) than the £7 billion ($11 billion) widely reported.

True, Mr Osborne faced anger from senior backbenchers about a temporary €60 billion ($75 billion) mechanism for rescuing countries in the euro zone, conjured up by the European Commission in May, to which the outgoing Labour government, in its dying days, committed Britain. The chancellor insisted Britain will not be part of a much larger, permanent EU bail-out fund for the euro zone being debated, and vowed to seek the winding-down of the temporary mechanism. Only John Redwood, a former cabinet minister and a bit of a lone voice on the right, asked for a pledge that Britain would not make further loans to euro-zone members. The chancellor dodged the question. Yet if the crisis deepens it will be asked again, and not just by Mr Redwood.

Make no mistake, this is the most Eurosceptic Conservative Party ever, says a party elder. In the unlikely event that Tory MPs were given a free vote on British membership of the EU, he says, more than half might choose to leave; the 150-odd Conservative MPs elected at the last election are “very Eurosceptic”, and not just because Euro-enthusiasm is a bar to selection as a Tory candidate. The leadership is Eurosceptic too. Gone are the days when Margaret Thatcher was constrained by pro-European big beasts in the cabinet, whose resignation she could ill afford. Emotionally, it is said, Mr Cameron and Mr Osborne would prefer a looser union based on free trade. They do not pursue such a union only because they believe one is not on offer—and that “banging on” about Europe is electoral poison.

To what extent is the government's freedom of action over the euro crisis restrained by Tory Euroscepticism? Mainstream Conservative MPs are less keen than party activists (or their cheerleaders in the press) to see a nuclear blow-up of the euro. But they do not see the defence of the single currency as a British responsibility. Portugal and Spain are “the euro zone's problem”, says that party elder. Whether those MPs even see the survival of the euro zone itself as in Britain's national interests is untested. Mr Osborne has presented Ireland's debacle as a threat to those interests, describing a “friend in need” whose banks are interwoven with Britain's, which shares a land border and buys more British exports than Brazil, Russia, China and India put together.

Britain was right to shun the euro, Mr Osborne said, but “I told you so” does not “amount to an economic policy”. Several English Tories proved that “I told you so” makes for terrible diplomacy, too—drawling invitations for Ireland to hurry back to currency union with the pound. One chortled about Ireland being “faithful to sterling” rather than the “more flighty euro”.

And dangerous to know

Broadly though, Conservative leaders are lucky that Ireland, a close neighbour, is the country needing help. And coalition with the (more pro-European) Liberal Democrats reduces the power of Tory rebels, who lack a single, charismatic leader. In another piece of luck, the €60 billion EU mechanism involving Britain—the biggest driver of Tory anger—will probably be exhausted by bailing out Ireland and Portugal (whose rescue seems inevitable), before Spain needs saving.

But a Spanish collapse would take the euro zone's ills to a new level. Amid a global meltdown, perhaps Tories would forget their bluster and agree that British interests would not be served by standing aloof and watching Spain's reduction to economic rubble. After all, careful explanations from Mr Osborne convinced most Tories that Ireland's collapse was not in British interests. The real shock is that his party needed help seeing that.

This is the political lesson of the euro drama to date. Tory distrust of Europe has injected zealotry into what was once a pro-business party famed for its pragmatism. This is already pretty bad: let not Europe's spiralling crisis make the Tory party mad.


Economist.com/blogs/bagehot

This article appeared in the Britain section of the print edition under the headline "They told you so"

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