Edward McMillan-Scott: Forget the Tory sceptics and focus on real euro issue

THE Conservative high command is clearly involved in a concerted damage limitation process over the growing Euroscepticism displayed at the party conference in Manchester.

This disguises a potentially momentous shift in which the UK would slip into an EU hinterland while the core countries develop a deeper relationship around a strengthened euro.

This “let them get on with it” policy was hinted at by David Cameron during yesterday’s interview on the Today programme.

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However he does not want to express the new approach too clearly because the party that took Britain into Europe, and believed in leading in Europe for so long, now wants in its heart to leave Europe.

Both David Cameron and William Hague have been united in flattening talk of a referendum on Europe this week.

What I am sure of, having attended many conference strategy meetings, is that Cameron will develop this new Eurosceptic angle about a two-tier Europe during today’s closing speech. Sadly, it will get the biggest cheer,

In assorted media activities, Cameron has focussed on what is a real dilemma for himself and George Osborne: the eurozone crisis. The euro dilemma – wanting it to succeed yet not wanting to be part of a successful single currency – has the spinners in a spin. And Cameron knows that there is a growing enthusiasm in Brussels for a tougher treaty to govern the euro, and which would be based on “discipline and integration”. It would embrace the 17 eurozone members, plus the six “euro-plus pact” leaving only Hungary, the Czech republic, Sweden and the UK in the outer tier.

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Cameron has been at pains to play this down, tautologically saying “prospect for future treaty change is not an immediate prospect” when he knows that the opposite is true. His problem is that he let the Eurosceptics have their head with the EU Act, which now commits him to holding a referendum on any proposal which “transferred competence”to the EU.

Imagine how long Ed Llewellyn, Cameron’s chief of staff (and a long-term Europhile) must have spent on the PM’s speech in Canada last month: “Eurozone countries must act swiftly to resolve the crisis. They must implement what they have agreed. They must demonstrate they have the political will to do what is necessary to ensure the stability of the system.

“One way or another, they have to find a fundamental and lasting solution to the heart of the problem – the high level of indebtedness in many Euro countries.”

Not a word about the EU-level processes here; all the blame goes (not unjustly) on the sovereign debt crisis, but Cameron must soon deal with the “one way or another” – the need not just for eurozone economic governance, but for economic government itself.

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Cameron knows that the talk in Brussels is of a European Monetary Fund, a European “finance minister” drawn from the Commissioners, Euro-bonds and single representation of the Euro area in international financial institutions. He knows that the “Merkozy Pact” in which the Franco-German directoire has attempted – but failed – to stitch up the euro is running out of road.

As George Osborne said, there are just weeks to save the euro (recalling Hague’s ill-fated 2001 slogan “three weeks to save the pound”) but the euro cannot be credibly saved by another dose of inter-governmentalism.

Before I quit over Cameron’s controversial EU alliance with the “bunch of nutters, homophobes, anti-Semites and climate-change deniers” as Nick Clegg (now my party leader) so pithily described it, I was one of the diminishing wing of pro-Europeans in the party prepared to speak out.

I recall a lengthy call to my mobile from Hague – I was at Brussels Airport waiting for a plane – in which he demanded that I sign up to a “Never to the euro” pledge. He had persuaded the leaders of the other Parliamentary groups, Scottish, Welsh, Lords etc to do so and he insisted that I – then leader of the Tory MEPs – now sign. I refused, objecting that to rule out membership in principle was absurd, even if I was not then in favour.

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Hague’s positioning towards the 120 or so Eurosceptic Tory backbenchers who last week inaugurated their campaign for “localism”’ (that is, repatriation of powers from the EU) was to say that membership was not “career suicide”: hardly helpful to Cameron, who dreads his Right-wing.

The group’s leader, George Eustice, was once a Ukip election candidate. How long before Cameron faces reality over the euro and faces down his Ukip tendency, who are full of passionate intensity for a referendum? And what is the deal he now offers them? Second class membership of the EU for Britain. That is not in the national interest.

• Edward McMillan-Scott (Yorkshire & Humber, Lib Dem) is a vice-president of the European Parliament.