“An inept negotiating strategy placed in the hands of an inexperienced prime minister” – behind the scenes of Cameron’s ‘veto’

by Stephen Tall on December 13, 2011

“An avoidable disaster”: that is the verdict of the Financial Times’s Philip Stephens in a must-read article examining what went on behind the scenes of the Coalition’s strategy for approaching last week’s failed European summit. And his verdict on the Prime Minister and his advisers could scarcely be more scathing:

There was no great plan for a rupture. What some Tories now see as Mr Cameron’s Churchillian moment was rather the result of an inept negotiating strategy placed in the hands of an inexperienced prime minister.

So what did happen? On last night’s Newsnight former Lib Dem leader Lord Ashdown set out a summary of events… The Lib Dems and Conservatives agreed a joint negotiating position ahead of the summit, with Nick Clegg extensively involved in the preparations and reaching out to potential British allies in Europe. However, the responsibility for undertaking the negotiations themselves lay with Mr Cameron and his team of advisers, and their inability to make a deal stick led to the agreed Coalition position unravelling.

Mr Stephens’ account takes us further into the detail:

Sir Jon Cunliffe, Mr Cameron’s Treasury adviser, is being blamed. He decreed that the Foreign Office be locked out of summit preparations. This precluded any serious diplomatic groundwork in other European capitals. Sir Jon insisted that the eurozone could be “bounced” at the 11th hour into accepting a British protocol to protect the City. This was a negotiating tactic he picked up while working for Gordon Brown. The possibility that the other leaders might simply say No was discounted. The Treasury, as one of its own once memorably remarked, has never really understood “foreigners”.

As things turned out, Mr Cameron had misread Angela Merkel’s intentions following a meeting in Berlin; and Nicolas Sarkozy had a score to settle after George Osborne recently compared France’s predicament with that of Greece.

Mr Clegg was as surprised as everyone else in Downing Street with the outcome. He had been assured that the Treasury paper was an opening gambit, but in the event it was presented as an ultimatum; and presented at an hour when European leaders wanted only to retire to their hotel beds. There was no plan B. All in all, as negotiating fiascos go, this one was at the top of the A-list.

Such an account explains much, including Nick Clegg’s initially neutral public response.

If you re-read what Nick Clegg said on Friday in the wake of the Prime Minister’s veto of a European treaty what is clear is that the position he defended is the agreed Coalition negotiating position: “The demands Britain made for safeguards, on which the coalition government was united, were modest and reasonable. They were safeguards for the single market, not just the UK. There were no demands of repatriation of powers from the EU to Britain and no demands for a unilateral carve-out of UK financial services. What we sought to ensure was to maintain a level playing field in financial services and the single market as a whole. This would have retained the UK’s ability to take tougher, not looser, regulatory action to sort out our banking system.” Every word of that statement relates to the agreed Coalition position; Nick does not once touch on the conduct of the negotiations.

What Nick Clegg may not have known (probably could not have known) on Friday morning was how the Prime Minister had played the hand they had jointly agreed. When he did — and realised that Cameron’s position was the result of poor negotiating rather than deliberate strategy — he was not afraid to make clear his dismay at the outcome for the UK.

Almost always in politics when the choice comes to believing cock-up or conspiracy, I’ll opt to believe the cock-up theory. That appears to be the truth of what really happened behind the scenes of Mr Cameron’s decision to use the UK’s veto.

However, there is one (suspicious) part of me that wonders about the involvement of the Treasury, and in particular George Osborne and his tactics-first, ultra-euroscepticism: might he have been secretly pleased that the Prime Minister’s failed attempts at brinkmanship have resulted in driving a wedge between the UK and the rest of the Europe?

In the short-term at least Mr Cameron’s failure is an undoubted success, with polls showing majority backing for his hardline stance, and right-wing papers that just a week ago portrayed the Prime Minister as a vacillating John Major Mark II figure now hailing him as Churchillian. But political success can have a remarkably short shelf-life (as the last political leader to be compared to Churchill must sometimes reflect), and Mr Stephens points out the longer-term reality of the Prime Minister’s strategy:

Mr Cameron’s coalition is now in a lose-lose position. If the eurozone fails in the effort to rescue the single currency, Britain will be caught in the ensuing economic tsunami. If the euro is eventually saved by the creation of a fiscal union, Britain will find itself marginalised in European Union decision-making in areas pivotal to its own prosperity.