We predicted that David Cameron’s principled stand against the swollen €1 trillion seven year EU budget would find supporters when the showdown actually happened, and it looks like we were right. The EU summit broke up yesterday in deadlock, with the UK standing firm alongside the Netherlands, Sweden, and most importantly Germany.
Cameron radiated satisfaction with the deadlock, but he was helped enormously and surprisingly by Merkel who blocked all attempts to isolate the veto-wielding prime minister and so prevent a much worse bust-up.British and other senior officials said that Merkel, who saw her role as the central mediator in balancing the conflicting interests and crafting a compromise, came down strongly on Cameron’s side in pushing for greater spending cuts, and supported awarding him a symbolic victory by cutting the costs of EU administration and civil service.The Merkel backing for Cameron brought French complaints of the surprise emergence of a “Berlin-London” axis. But if this appeared to have some foundation, the alliance was directed not against Paris but at Brussels.
This is a big win for David Cameron. The UK comes out of this much less isolated, and a leaner EU budget is all but certain. The fight between the richer and poorer EU countries is far from over, however: these negotiations will resume again in the New Year. And Angela Merkel was acting tactically at least as much as on principle. Did she in turn extract promises of support from Mr. Cameron for policies she favors and which he has traditionally opposed, such as the strengthening of the ECB’s role as the EU’s banking supervisor?Much of this will become clearer in the coming month.