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Did Gordon Brown Make the Worst EU Mistake of Any British PM?

According to new reports in the Financial Times, Gordon Brown may have unwittingly dealt an irreparable blow to Britain’s financial services industry, and the full effects of this are only beginning to be felt three years later. Brown deserves a lot of credit for holding fast against Tony Blair’s eagerness to join the eurozone, but in 2009, he wrongly focused on ensuring that a Brit, Catherine Ashton, was appointed Europe’s foreign policy chief. While this was going on, he let the job of top EU financial regulator go to Michel Barnier, a Frenchman who has since made a lot of enemies in London, where many feel that he is bent on curbing the City’s advantage as the financial center of Europe. As the FT puts it:

“Failing to secure that post for a Brit was probably the biggest single error in European policy for a decade,” said one UK Treasury insider. . . . British officials privately believe Mr Brown made a major mistake lobbying for the foreign policy portfolio, rather than pushing for a Briton to oversee financial services.

Led by José Barroso, the EU Commission’s president, talks were started last winter to initiate a possible job swap between Barnier and Ashton in order to win David Cameron’s support for the new EU fiscal treaty. Unfortunately for Britain’s Treasury and for the City of London, it does not look like Brit will get the crucial post anytime soon. The plan to swap Barnier for Ashton has fallen by the wayside because of concerns that the EU parliament would vote it down.

For the time being, at least, London will have to live in fear of losing its place as the financial heart of Europe.

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  • WigWag

    Plus there is the fact that Lady Ashton is a moron who isn’t up to the job of being Europe’s foreign policy chief.

  • Jack

    Surely it would be an exaggeration to suggest that the possible decline of London’s financial services sector can be blamed largely on one bureaucratic appointment.

    Some financial commentators have been saying for years that London’s financial services sector is destined for a major purge. Much of what goes on in the City and Canary Wharf nowadays is merely avaricious trading as opposed to principled investment and does not add much real value to the economy.

    In the long run, perhaps a less powerful financial sector would be a good thing as it would encourage Britain to take steps to diversify its economy.

  • Walter Sobchak

    The worst mistake was joining the EU. The rest is details.

  • Eric

    I suspect Mr Brown was not fighting a battle he knew he couldn’t win. Germany and France would never accept an Anglo-Saxon capitalist to an EU financial services portfolio when they consistently deride the Anglo-Saxon capitalist model.

    But their own mistake is to do the same: fight a battle they can’t win. The UK could never accept a Tobin tax which falls 70% on them and which hits their main source of competitiveness. Especially with the Conservative Party in power. Since the Germans and French are intelligent you would have to ask what is the real motive?

  • Brett

    Nah, I think the Brits will back out of the EU before sacrificing the City on the alter of European solidarity. It’s the only part of the private sector that’s generated significant net jobs in the past decade or so.

  • Kris

    WigWag@1: “there is the fact that Lady Ashton is a moron”

    There’s only one thing worse than having a moron as Europe’s foreign policy chief…

  • Jim.

    Why in the world did the British join an organization so damaging to their interests?

  • Eurydice

    Well, it’s not enough to wave a pen and call yourself the financial heart of Europe – you’ve got to keep the customers. And considering how the EU has conducted its economic affairs, I wouldn’t trust them with a penny.

  • Anthony

    In-depth economic and political analysis and reports for companies, organizations and institutions ( hints at your Brussels ), go to CWIIL GROUP:

  • Tom Richards

    Jim – Ideologically driven statement politics lunacy. There has been for some time a bien-pensant consensus to the effect that anyone who opposes European integration is a warmongering xenophobic dinosaur.

  • Andrew P

    As a famous Brit said, “The Euro is a burning building with no exits…” I think decision time for the UK and the EuroZone is at most 5 years away.

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