Cameron: EU directives 'attack' the City

Not exactly a new concept, we'll grant you - but this is an impressive show of solidarity. Which is more than can be said for the eurozone...

by Emma Haslett
Last Updated: 06 Nov 2012
Well, businesses can’t complain that their leader isn’t on their side: Prime Minister David Cameron told a Commonwealth Heads of Government summit in Perth this morning that the City of London is under ‘constant attack’ from EU directives. Not the best way of ingratiating himself with other EU leaders, from whom he’s had his fair share of criticism over the past few days. But Cameron insisted this morning that the City is a ‘key national interest’ that needs to be ‘defended’ from those pesky bureaucrats in the EU. Wonder what Merkozy will make of it…

Cameron’s point seemed to be that the eurozone is beginning to look more and more like a series of schoolyard-style cliques. ‘There are a lot of things the eurozone is doing together,’ he said. ‘Having more meetings alone, establishing machinery – it raises the question of could there be caucusing?’

Now, apart from the fact that the speech had the dejected air of a child not invited to their friend’s birthday party, Cameron might have a point. Yes, he was told to ‘shut up’ by Nicholas Sarkozy, who said he was ‘fed up’ with Cameron’s ‘interfering’. But you can see why Cameron wanted to get involved: after all, it’s not just eurozone members that depend on its success. The UK is just as embroiled. Although George Osborne’s assertion that the UK won’t be coughing up for the eurozone bailout probably hasn’t done much for our cause.

Meanwhile, drama in the eurozone continues apace. Sarkozy’s diplomatic streak was again in evidence during a TV interview last night, in which he said that allowing the Greeks into the euro was a ‘mistake’ and that the country probably faked economic figures in order to be allowed in. Hmm. Happily, though, France’s diminutive president added that he’s ‘confident’ the country will emerge from the crisis. Of course, how much of it will be left is another question entirely…

To prevent that, though, eurozone leaders are going to have to set the wheels of Thursday’s ‘three-pronged’ agreement in motion pretty sharpish. The only problem, of course, is that China is still um-ing and ah-ing over whether or not it wants to get involved. Part of the deal was premised on the idea of cash-rich developing nations, like China or Brazil, buying up European Financial Stability Facility (the jazzy name given to the European bailout fund) bonds, in order to increase its liquidity. The expectation is that China will inject about €70bn (£62bn) into the fund.

But speculation is rife over whether that’ll actually happen. What eurozone leaders didn’t count on was China asking what’s in it for them. As Li Daokui, a member of China’s equivalent of the MPC, told the FT: ‘It is in China’s long term and intrinsic interest to help Europe… but the chief concern of the Chinese government is how to explain this decision to our own people. The last thing China wants is to throw away the country’s wealth and be seen as just a source of dumb money.’ Well, quite. Or, as World Bank president Robert Zoellick told the Beeb, ‘I don’t think that China will just come in as a white knight to try to provide money just to bail out the Europeans.’ So Thursday’s deal still hangs in the balance. Looks like Merkozy et al won’t be getting much sleep for the foreseeable future.

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