Voice

Will U.S. pressure on Britain over EU membership backfire?

Earlier this week, U.S. assistant secretary of state Philip Gordon took it upon himself to counsel the British on their relationship with the European Union. Gordon joined other notables, including European Council president Herman Van Rompuy, billionaire Richard Branson, and top German officials, in expressing concern about movement toward a referendum on EU membership. Via yesterday's New York Times:

In London, Mr. Gordon indicated that any British withdrawal from the union would be unwelcome and said that referendums held by other nations on European Union agreements “have sometimes turned countries inward.”

“We have a growing relationship with the E.U. as an institution, which has an increasing voice in the world, and we want to see a strong British voice in that E.U.,” he told British reporters, according to a transcript released by the United States Embassy in London. “That is in the American interest. We welcome an outward-looking E.U. with Britain in it.” He added: “Britain is such a special partner of the United States — that shares our values, shares our interests, has significant resources to bring to the table. More than most others, its voice within the European Union is essential and critical for the United States.”

Launching such a public intervention was a curious choice for the Obama administration. The British relationship with the EU is a sensitive matter that touches on deep questions of national identity, and Euroskeptic British politicans have reacted to the American intervention with predictable annoyance:

Tory MP Bernard Jenkin said today that the US had not "got a clue".

"The Americans don't understand Europe. They have a default position that sometimes the United States of Europe is going to be the same as the United States of America. They haven't got a clue," he told BBC Radio Five Live.

Another eurosceptic Tory MP, Peter Bone, said Mr Gordon should "butt out" and that it was "nothing to do with the Americans".

He added: "It's like us trying to tell Germany or France how to run their affairs. It's quite ridiculous and it's not what you'd expect from a member of the senior executive in the USA, and I hope that the president will slap him down very quickly."

It's at least possible that the intense external pressure could make it harder for prime minister David Cameron to back down on the referendum question. If he does shelve the idea, he'll now appear to have knuckled under to both Brussels and Washington. Some Tory lawmakers are already pointing out that whether British EU membership serves U.S. interests is of questionable relevance:

Eurosceptics delivered a fierce rebuke to America today after the Obama administration publicly voiced concerns about David Cameron’s plans for an EU referendum.

Conservatives urged Washington to mind its own business and said the Prime Minister should stand firm. Tory MP for Esher, Dominic Raab, hit back: “I think Britain should do what’s in its interest, not what’s convenient for the Americans.”

The Multilateralist

Can the BRICS build a bank?

India's Business Standard reports on scheduled meetings of BRICS officials to discuss their  plan for a joint development bank:

Officials of BRICS countries are scheduled to meet in Pretoria, South Africa on January 10-11 to look at the viability and feasibility of setting up the bank. In February, finance ministers from these nations will meet to finalise the structure and thereafter, the leaders will approve it in March at the Durban summit.

Officials in India said all the countries are committed to creating the development bank for the region and the chances of a consensus are very high.

“It may start with small paid-up capital from BRICS countries and work on the World Bank’s model. The bank will have to raise funds from the market at a concessional rate and lend further to the BRICS countries at a low rate,” said a finance ministry official.

By some accounts, negotiations about the bank are endangered by competing visions of its role. Last week, the Wall Street Journal reported that China's notion of a bank devoted to its own members and focused on large infrastructure projects is not accepted by other BRICS members:

South Africa wants the funding to be available for other developing nations. India, which proposed the development bank, likes the idea of infrastructure financing but fears that China wants to run the bank mainly to make yuan loans and further the international use of China's currency, "One country wants to dominate due to its financial standing, which would not be acceptable to the others," said Brahma Chellaney, an analyst with the Centre for Policy Research, a New Delhi think tank.

Where to locate the development bank has become another battle. Mr. Liu says India wants the bank headquartered there, while China would "very much appreciate it" if the bank is located in Beijing, Shanghai or Chongqing. China is expected to chip in the largest share of the financing and "money talks," he said.