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The other day, David Cameron and Nick Clegg presented their 34 page detailed document to outline the details of the Coalition agreement. The general consensus was that the Conservatives had given more ground than the LibDems on their Election Manifestos. An interesting observation but not one I suspect will stand the test of time.

The one thing I’ve always liked about Cameron and despite the odd stumble since he became Tory Leader and had to ‘learn on the job’, is it became clear that he was a pragmatist not a dogmatist and one suspects, as others have commented, he has used the coalition as an excuse to ‘off-load’ a number of Tory Policies that frankly wouldn’t play well in these straightened times.

It is Always “Events”…

I have always been of the view that we should always “Make Plans” because if you don’t, Life tends to make them for you and you end up where you don’t want to be. In any partnership, perhaps the most important first thing is to draw up a “Partnership Agreement” that defines the responsibilities of all parties to that Agreement and in a sense, this is what has happened between Cameron and Clegg.

However, whilst making up a solid plan and from that, the various courses of action to make it happen, you need to keep an open mind because whilst your original ‘plan’ may be very good, it was only good for those set of circumstances that applied at that time, things can change, ‘events’ may overtake you and sometimes quite rapidly. This all came to mind over these past few days as David Cameron visited first President Sarkozy and then Angela Merkel.

The Greatest Divide…

When it comes to specific policy matters, the greatest single divide indeed, a veritable chasm between the Conservatives and the Liberal Democrats must be over Europe. Nick Clegg is a totally besotted Europhile having formerly been an MEP and his Party is of the same ilk. The Conservatives are on the other hand, pretty anti-Brussels although and as all big parties are coalitions in themselves, the mood changes from a bulk ‘anti’, through ‘agnostic’ to ‘pro’ as expressed by people like Ken Clarke.

Europe has the potential to not just split the Conservative Party apart but also the Con/Lib Coalition as well. However, the reality is that many of the aims expressed in this “Government Programme for the Next 5 Years”, may well turn out to be little better than pious hopes as reducing the Budget Deficit and trying to get the UK Economy moving again, will be the all consuming priorities and herein lies an interesting conundrum, in fact, two of them.

Push me Pull me…

The problem with reducing the Deficit which means reducing Public Spending is that it is a fine balancing act between cutting too quickly or cutting too slowly so, not too easy to gauge.

Of course, there is another factor within that, having a floating currency means that as Sterling has lost a lot of value, our exports are cheaper but as 50% of those go to EU countries and the Eurozone is rapidly turning into a disaster zone, we cannot ignore either Greece or the plight of the Euro itself however, it might just set in train a whole series of major changes within both the EU and British policy towards it.

Perhaps at Last…

The Coalition has already agreed that the UK will neither prepare for or, enter the Euro during the next 5 years. But there is something else too: Quite sensibly once the Lisbon Treaty was finally ratified, David Cameron said that he would no longer promise a Referendum as PM on it because it would be a pointless exercise but he would on any further changes to any EU Treaty.

The Euro was always a bit of political nonsense that made no practical contribution to strengthening the EU. How on earth can you compare the German Economy with the Greek one ? As I said at the time, it was rather like taking the top performing 7 companies on the Stock Exchange and 7 self employed Plumbers, Carpenters, Bricklayers, Hairdressers and Beach Bums, putting them together and saying that they were economically equal which was a load of old cobblers so, the current Euro Crisis can surely hardly be a surprise.

The hard fact is that without political union, a currency union just cannot work and it is not just the British public that would oppose a “United States of Europe”, France and German would oppose it as strongly. But that said it is France and Germany who have put their ‘prestige’ behind the Euro so… Germany is already looking for a typical EU ‘fudge’ but I wonder if it is possible and I suspect that in the end the choice will come down to saving the EU by dumping the Euro which rather like Gordon Brown and New Labour spending, could only happen in boom times.

But Merkel has said that the Euro must be fixed either by a new Treaty or an Amendment to the Lisbon Treaty which will immediately trigger a British Referendum…Interesting Times indeed.