Can the Merkozy partnership save the Euro and the European Union long-term
Yes they can but, and it is a big but, only if they genuinely create a United States of Europe out of the European Union with one treasury, one fiscal policy and yes this is full monetary union which can only lead to full political union and that is the rub. The treaty as it is relies on the consenting countries sticking to the rules to avoid penalties but countries like Greece, Italy, Spain have totally different attitudes to debt than Germany and France, Greece is institutionally corrupt and Italy has basically been run for the past decade+ by someone who in the UK would be regarded as little more than a gangster so the omens are not good.
If you add to this the austerity measures which will be imposed on these countries which make major civil unrest a near certainty and the issue of total loss of sovereignty which is bubbling to the surface in all countries including France and all this is all being done in spite of the people, not with a mandate from the people, in fact the way measures have already been imposed on Ireland, Greece and Spain does not resemble democracy and that will be the source of serious unrest the like of which we have not seen since before the WWII. Further reading
The treaty as it stands, if we see a swifter than predicted return to growth, then the Merkozy partnership may stand a chance of avoiding further euro problems until the next down turn but unless they totally integrate it will only delay the inevitable, if they do integrate they will create a top table of real influence within the European Union but to join it countries will have to give up virtually all sovereignty and I think it will be a much smaller top table than it is currently!
The world will watch to see how the European Union deals with the social unrest and violence, which will happen and I am worried that this voyage of the Euro-Zone could just like the maiden voyage of the HMS Titanic, a real accident waiting to happen.
Where do we stand now that David Cameron has vetoed the treaty changes
The treaty changes will obviously still go forward but outside the full 27, have we lost influence, of course we have because we are not in the Euro or part of the new treaty but David Cameron had no choice but to veto it because signing up would have dragged the UK deeper and deeper into the undemocratic quicksand which is the European Union and we can’t expect to have great influence over a club of which we are not a member but does it matter?
Does our loss of influence within the European Union matter, all loss of influence matters but we can’t stay outside the mainstream and retain insider influence and the UK needs to decide how we move forward and I am struggling to find a reason to stay inside the European Union other than as an associate with a trading agreement.
David Cameron needs to put together a task force, preferably chaired by David Davis, to look at how we extract ourselves from all the European Union beaurocracy, write our own Bill of Human Rights and just prepare the ground for when we eventually pull out of the European Union and as further preparation George Osborne needs to: