by Atul Hatwal
It’s coming. Don’t say you weren’t warned. Peter Watt and Rob Marchant among others have been ringing the bell, but the gaze of Britain’s political class has been elsewhere.
Theresa May’s turn at Tory conference, as Mrs Slocombe, commanded more attention than the looming cataclysm. And now the shadow cabinet reshuffle is occupying Labour thoughts.
But as the eurozone ministers inch towards action, the shaking earth cannot be ignored for much longer.
In all of the furore around this rolling crisis, reams of newsprint have been written on the economics of the impending eurozone crash, but comparatively little on its political consequnces.
Yet it’s the political fall-out of this economic disaster which will utterly change Britain’s future.
Because after the eurozone finance ministers are finally driven to act, and the necessary billions are committed to securing eurozone, there will be a new European settlement.
The cost of Germany and France putting up the funds to save the euro will be pooled economic sovereignty in the eurozone, or more specifically a European bloc of 17 nations, where monetary and fiscal policy is run by the Franco-German alliance.
This will recast Europe and with it Britain’s economic prospects and security in three ways.
First, Britain will be vulnerable to increased eurozone protectionism, second the UK’s position as the preferred location for foreign direct investment in Europe will be threatened and third, Britain’s international defence commitments will likely need to be redrawn.
Protectionist voices have long been a central part of French economic policy.
Two years ago, the Sarkozy government received a formal slap on the wrist from the commission when one of its more hapless trade ministers admitted that Renault had shifted production of a model from Slovenia to France, in return for billions of euros of soft loans.
