Wriggle-clauses will be used by Brussels to ban UK from help after FiskalUnion

Draft pact leaves UK open to major pressure

Update 14.30 GMT: some potential errors of understanding have been removed, and further confirmations added from the original piece @ 11.28 am today

The Slog received information from Brussels late last night GMT commenting on fiscal relations between Ezone and non-Ezone States after FiskalUnion is completed via the new ‘pact’.  The informant stated that draft words currently configured as ‘structural challenges’ in relation to countries opting to stay outside the eurozone will be used as a ‘wriggle-clause’ to claim that most if not all economic problems are not ‘structural’.

Although there may have been some confusion earlier about ESM bailouts vs EU programmes of help (the EU is an endless stream of initials)  it now seems clear that any contributions to economic health after FiskalUnion are likely to be a one-way street going from Britain to elsewhere. Contacted by The Slog this lunchtime, Vincenzo Scarpetta at eurosceptic site Open Europe conceded that the UK’s right to economic help after FiskalUnion was “unpredictable”, and confirmed that as a non-eurozone State Britain “has no right to help under the ESM”. However, The Slog’s Brussels source is quite clear about the fact that he was referring to any help at all as an EU member beyond the ESM as set out in the Fourth Draft of the Pact.

Without wishing to state the obvious here, if my source is correct this really does make membership of the EU outside the eurozone completely pointless. We will be paying into Union funds and contributing to membership, to some of which – no matter what Cameron suggests – we are legally committed if they are EU programmes, not eurozone bailout funds. But the Sprouts will make it difficult to get at those very same programme funds.

Also, with Christine Lagarde – architect of the French fiscal farce – back on board her gravy train again, shunting from one capital to another in search of $500 billion of further bailout money – we may yet contribute the circa £14bn which would be our share, and that will inevitably go straight into eurozone bailouts….whatever she says. (This is certainly what Washington thinks, which is why they’re very unlikely to partake).

This is really heads they win once, tails we lose twice over. Perhaps above all, when the fiscal effects of the banking/ClubMed loans hit us, we may well get nothing beyond some legalese politely asking that we go forth and multiply.

And there is also a further consideration. It seems to me that, if this is a level-playing field, as an EU member we should look to obtain compensation for the obvious and direct damage already done to the UK economy by the frozen economic situation in the ezone….all of which is the fault of those who constructed the zone, because they failed to control the fiscal jiggerypokery of banks and borrowers in the southern eurozone. There also remains today’s news that some 370,000 migrants have arrived in the UK and are claiming welfare benefits: perhaps we should know what percentage of these are EU citizens? (If Whitehall knows, quite frankly I would be astonished).

Ultimately, whether the UK or other ‘peripherals’ could argue the case for help or not, what’s clear is that the spirit of willingness simply isn’t there in Brussels: it would turn into a long-running legal wrangle, meaning we wouldn’t get the funds when we need them. But equally disturbing is what my source suggests is being stored up down the road.He told me today:

“You’ve seen what’s happened with Hungary. Any deviation is followed by threats, and then gentle blackmail – ‘you join our club and obey the rules, we help you’. It’s a glorified protection racket really. It’s not that difficult to envisage a situation along the way where economic stagnation and bank failures leave us heavily exposed. Should that happen after EU fiscal union, we’ll be in the same poker game as Greece is today – ‘we drip you the money so long as you behave….course, give up Sterling, and we’ll make things easier for you.’ The intent is obvious to anyone who knows the history.”

Hungarian leaders are bending a little, but not much. Viktor Orban yesterday observed that “We support the initiative of Chancellor Angela Merkel on the fiscal union. But we strictly reject a Europe-wide harmonised tax system. Hungary’s low tax rate is for us a competitive advantage that we cannot do without.” As I posted earlier in the week, Hungary represents a potentially excellent test-case for everyone resisting the EU madness.

I’d love to think that the FCO is on this case. But that would be a triumph of optimism over experience. I do, however, think that the Tory Right should be asking some serious questions of Dave re this one.

Footnote: I had another communication this morning suggesting that – using a structure bearing some resemblance to yesterday’s leak here – they are down to the short strokes in the steam-rooms of Athens, if that doesn’t sound too lurid. I think my source means that the lawyers late last night went away to write it all up. There should be something for everyone to look at on Saturday, whinge about on Sunday, and then sign on Monday. About three seconds afterwards, the Troika will then start another head-banging session about releasing the next tranche of walking-around money….dependent (allegedly) on reform progress by the Government. It is a pointless exercise, but the tragedy must unfold: She who must be Obeyed at All Times has decreed it so.