Jim McConalogue: The people must decide on our European future

Britain has been marginalised throughout much of this historic

partnership, despite false assurances from government ministers

assuring the British people that our economy, democratic rights and sovereignty are protected or even bolstered, while being faced with a request for European "economic government".

Given that prior to the EU summit at the end of March, German

Chancellor Angela Merkel and French President Nicolas Sarkozy, called for "economic government" by the European Union, while setting out proposals on how to protect Greece from default on its loans, it is

clear that now it is time for the Government to set out how they intend to deal with British economic policy being firmly directed by European economic government.

It must finally agree to give the British people a referendum on this crucial European issue, which ultimately decides how the British people are to be governed.

Such a step towards official European economic government is not a matter for a closed-doors cabinet in Brussels but a historic move towards a fundamental different form of governance within the United Kingdom and on which the British people must be allowed to have their say.

The disaster is as much about the destruction of national sovereignty as it is about the handing over of the reins of economic government to the European Union. The European rules governing the dreadful state of

Europe's public finances fell to pieces during the economic recession, most notably through the suspension of the bizarrely-named Stability and Growth Pact.

Europe's own template for boosting growth, enterprise and jobs (the so-called Lisbon strategy) has been a historical failure.

We already face massive European regulation of the City of London and the role of the Bank of England and financial services, and the fact that the EU costs 2,000 for each man, woman and child, according to the TaxPayers' Alliance – which far outweighs the benefits. Meanwhile, the Labour Government has doubled the UK contribution to the EU in two years from 3bn in 2008-09 to 6.6bn in 2010-11. The proposal from the recent paper by German Chancellor Angela Merkel and French President Nicolas Sarkozy that "the European Council (summits) should become the economic government of the European Union" – coupled with implied amendments or through a further European Treaty – is a dramatic development and one that needs decisive action. Britain must lead

Europe out of this complex situation by re-affirming that the electorate is entitled to a referendum which had been previously denied on Lisbon.

The opportunity for a referendum will provide a proper basis for the long overdue renegotiation of Britain's relationship with Europe. A decisive "No" vote from the British people would then lead to a new Europe based on an association of nation states.

This new development indicates that Britain has been out-manoeuvred and has been grossly sidelined under the developed Franco-German

partnership, with the aid of recently acquired powers under the Lisbon Treaty. Make no mistake it is a stitch-up.

Britain must be clearly opposed to economic government, which

represents an obvious drive towards ever closer political union. The EU acquired new powers through the provisions in the Lisbon Treaty in December 2009 and the Franco-German partnership has been keen to enforce a stronger and harmonised European economic policy, over which Britain has little to no control.

The new paper by the leaders of France and Germany further states that "we commit to promote a strong co-ordination of economic policies in Europe" and "We propose to increase (EU summits') role in economic surveillance" – the prospect of which would drastically change our economic landscape and which must be decided by the British people in a referendum.

Any future response by British politicians stating that this

development concerns only eurozone members would be false and

misleading since the paper's objectives for European economic

government are clearly bound up with Britain's own political and economic government.

A large part of the Merkel-Sarkozy paper details proposals for eurozone states and the International Monetary Fund on Greece's emergency loans, and those also raise serious issues on which the Britain people must have their say. It would create a further crisis in public confidence if the British Government's contributions towards a Greek economic bail-out came before its own obligations to resolve the troubled fate of its own indebted taxpayers or act over the nation's own failed industries during the economic recession.

Jim McConalogue is spokesman for The European Foundation.