UK's Cameron Wants Europe to Choose Growth 

David Cameron is to write to European Union leaders urging them to adopt a British plan for growth, at a time when some officials fear he is in danger of being sidelined in a two-speed Europe.

David Cameron
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David Cameron

Mr Cameron’s pamphlet, “Let’s choose growth”, is an exhortation to the world’s largest trading bloc to “unleash the forces of enterprise”. He says: “We cannot be complacent – the world won’t let us.”

The prime minister’s glossy pamphlet opens with a chart showing the relative decline in the economic standing of EU states, to the extent that it forecasts that France and Italy will drop out of the world’s top 10 by 2050.

Mr Cameron sees the mailshot to his fellow 26 EU leaders – as well as the presidents of the EU institutions in Brussels, business leaders and opinion formers – as a sign of Britain’s constructive engagement in Europe.

He calls for the completion of Europe’s single market – including the liberalization of the market in services and formation of a digital single market – and the acceleration of trade deals with countries like India, Canada and Japan.

Mr Cameron also wants the EU to lift the regulatory burden on business, to form a Europe-wide patents regime and to set up a pan-EU venture capital fund to try to match the innovation record of the US.

But there are some in Britain’s foreign policy establishment who believe Mr Cameron would be more influential had he decided this month to join a new economic inner core of EU members.

Charles Grant, director of the Centre for European Reform, is among those who believe that this month’s EU summit in Brussels might have been a fork in the road. “If you’re not in the room, your influence is diminished,” he said.

On the face of it, Mr Cameron’s decision not to sign up to the “euro-pact plus” was unsurprising, given that Britain is not a member of the single currency and has only an indirect interest in the economic governance of the euro zone.

But the decision was not so straightforward. On the Eurostar to Brussels, the prime minister was presented with a contrary view – held by some in the Foreign Office – that Britain’s liberal voice needed to be heard in this forum.

Mr Grant worries that once 23 leaders out of 27 start to hold regular meetings, they will inevitably start to “caucus” on issues relating to the EU’s single market, regardless of undertakings to the contrary.

Other EU member states did decide to sign the pact, even though they are not currently members of the 17-member euro zone, including Poland and Denmark. Only Britain, the Czech Republic, Hungary and Sweden stayed out.

The traditional Foreign Office view is that Britain must always try to make its voice heard, even in a forum that – for the time being – is only coordinating policy about issues such as early retirement ages and public sector wages for the euro zone.

But in the end Mr Cameron was persuaded by the equally traditional Treasury view – espoused by George Osborne, chancellor – that Britain will win the argument if it has the right policies.

David Lidington, Europe minister, says that Britain will make its voice heard by “active engagement” and that global competitive pressures will persuade the EU to follow a British economic path. “The euro zone countries have enough of a challenge sorting out their problems without turning it into a plot to undermine UK interests in Europe,” Mr Lidington said.