As David Cameron flies off to Brussels, promising to bring back powers from the EU (whatever that means) in return for his support for the Euro rescue, he will hopefully keep in mind just what is at stake here.
The EU may look horrendously complex but Britain’s long-term options are quite simple.
There are five ways the Britain’s relationship with the EU could develop:
- Britain joins the Euro.
- Britain stays in the EU but out of the more integrated Eurozone; part of a dwindling group of tier 2 countries and possibly, over time, losing some of its influence.
- Britain leaves the EU and joins the EFTA countries, still paying into the EU and still subject to many EU laws but with no vote.
- Britain leaves the European Economic Area altogether, its status in relation to the EU becoming no different from that of the USA, China or India.
- Britain vetoes Eurozone reforms and the Euro collapses. Britain becomes an international pariah, blamed for bringing about the second banking crisis.
None of these options looks particularly attractive but, right now, number 2 looks the best of a bad bunch. Which, once the posturing stops and grim reality sets in, is probably where we will end up.
Update: Anyone who thinks Option 3 looks attractive should read this piece from Nosemonkey.