Counterparties: David Cameron’s perplexing ploy

By Ben Walsh
January 23, 2013

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David Cameron is definitely up to something. The weird thing is that no one, himself included, seems to know exactly what.

The UK Prime Minister promised, today, to give Britons a referendum on their EU membership by 2017 — if his Conservative party gets re-elected. It’s a perplexing ploy for many reasons.

The more the anti-Continental UK press talks about a British exit, or Brexit (yes, this is a thing now), the more the public wants to stay in the EU. 40% now favor the status quo, which was established with 67% approval in 1976. That’s up from 30% in November, 2012. Cameron’s own party isn’t fully on board, never a good sign in a parliamentary system, and particularly in one led by a coalition government. The referendum might not even happen: the Tories have to win the next election first, and at the moment Cameron’s party has an approval rating of just 32%.

Open Europe Blog has a great round-up of reactions from European politicians, who are blasting Cameron with an array of metaphors. French Foreign Minister Laurent Fabius described Cameron as someone who joined a soccer team, only to decide “let’s play rugby.” Less charitably, former EU trade commissioner Peter Mandelson called the speech “schizophrenic.” And France is ready to just call the UK’s bluff and let them leave. In the end, it’s very likely that Britain is simply bluffing, and all it will have to show from doing so is fewer allies.

The announcement of the referendum has also brought economic uncertainty back into British politics. Britain’s EU membership gives it essentially unfettered access to the world’s largest single market — along with an annual GDP boost of almost $40 billion, or about $640 per UK resident per year.

Even more uncertain is how these types of proposals play out once they are announced. As Joshua Tucker writes, the example of the dissolution of Czechoslovakia shows that simply proposing a referendum makes a UK exit from the EU much more likely. Even if Cameron decides to campaign for Britain to remain in the EU, “once these things get out of the box, they can acquire a life of their own.”

Perhaps Cameron, as the UK economy continues to struggle, just wants to score some populist points in a country where, despite inventive verbal invective being something of a national pastime, being called “European” remains an unanswerable insult. — Ben Walsh

On to today’s links:

Apple
The inside story of the surprising rise of Siri at Apple – Bianca Bosker

Tax Arcana
Raising taxes on every American could save the government as we know it – Eduardo Porter

Financial Arcana
The “Robin Hood” financial transaction tax is moving forward in Europe – NYT
The big bank exec at Davos who is actually pushing his bank to shrink – Bloomberg

Earnings
McDonald’s financially satiated by reconstituted pork product, dollar menu – Bloomberg

Terrifying
The NFL has a 225% injury rate – Esquire

Old Normal
“Only 19% of people supported a tax cut” – Bruce Bartlett

Davos
In Russia, corruption worries about you…or something – Bloomberg
The party isn’t over — it’s just being downsized – Felix

Ugh
Donald Trump exploring improbably ways of buying the NYT – NY Mag

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