Strategies: The UK says "non." Bravo

For David Cameron and his team, there is a line in the sand which they will not cross and that line is the fact that successive governments of all colours have, in different ways, systematically destroyed or undermined all the ways in which the UK generates GDP except financial and legal services.

For countries such as Germany which has watched its industrial muscle decline as companies moved production first to Hungary or Poland and then, when those countries joined Europe (or in the case of Germany East Germany joined West Germany) and production costs rose, the factories - and jobs - have gone outside Europe entirely. For Europe, the EEA provided low-cost labour on its doorstep; bring EEA countries into Europe and its costs and regulation and layer upon layer of bureaucracy and law and those costs advantages are eroded with all the signs that there will be, in the medium to long term, no advantage in keeping factories open or investing in new ones. Businesses work on cycles that far exceed the vagaries of a political term of office. it takes longer to plan and build a factory than a government remains in power.

France's economy is shored up by the Common Agricultural policy, which means it is shored up by taxpayers across the EU. France has no grounds for arguing against a bail-out: its farmers have been bailed out annually for more almost half-a century. France is seriously hacked off with the UK because, in the early 1980s, Margaret Thatcher (then the UK's Iron Lady but later a bit of a wimp) negotiated a rebate for the UK taxpayer. As the largest recipient by far of CAP moneys, France bore the largest share of the "rebate."

But "rebate" is a misnomer - it presumes that the moneys paid into the CAP are the EU's as of right. Arguably, as the CAP is one of the fundamental platforms of the original six member states of the (then) Common Market, and as other countries have been signed up to it as part of their accession deals, it is a right. But it is a right that arises only from treaty and agreement and such things should not be regarded as set in stone. The UK wanted the CAP to be totally overhauled. Instead, other EU members insisted that it should remain set as before but that the UK would be entitled to a refund of some of the moneys it paid over. They called this a "rebate" because it established that the UK owed the full amount but would be allowed, as a concession, to take some back.

Both France and Germany covet London's position as the world's largest financial market (depending on which criteria are set). And they do so because, as so many offshore financial centres have found, financial services is low impact but high profit and, done properly, it can grow fast. Despite all the fuss about small island (and mountain) states, the fact is that London is the offshore centre of choice for much of the world. Germany and France want a slice of that. True, Frankfurt has had some success (in part because, historically, it was Germany's financial centre and Germany was an industrial powerhouse) but Paris is a minnow with less financial institutions represented there than in, say Grand Cayman.

The French see the dominance of the market by London as an affront to their national pride - especially as the UK had the cheek to remain outside of the grand dream of Europe, the common currency.

But "The City" has not remained outside the Eurozone: indeed, it dominates Eurozone bonds and other instruments. The French and the Germans don't like this "foreign" interference.

That, ultimately, is what is behind the attacks on London's financial supremacy. It is ironic that the Germans, whose banks overseas insist on following German regulation even where local regulation is more stringent (and have, in some small cases, been disciplined for so doing) are criticising the more stringent regulatory regime in the UK. It is ironic that the French government, which has a history of corruption scandals reaching into both the upper reaches of government over decades and long-term "relationships" with commercial concerns in oil, gas, aerospace et al. produced a report, some years ago, alleging that the UK financial sector was a haven for money laundering (the French sector, it appeared, was free from significant criticism).

Some have suggested that the UK would be better off without membership of Europe, some have said that the UK could not survive.

Both views have some merit.

Again. France jealously defends the CAP - despite the cost to the taxpayer both within and outside FranceGermany jealously defends its labour laws and the lack of competitiveness it creates in a manufacturing sector, demanding other EU states adopt similar measures - and the tax burden to pay for them.The UK jealously guards its primary income generator - the City - which requires no taxpayer support and generates for both the UK and, indirectly, the EU as a whole, considerable revenue.As Germany has watched its manufacturing base shift to Eastern Europe (as it was) and then, as those countries have joined the EU and their manufacturing costs increase and the jobs move outside the enlarged EU, Germany has tried to create Frankfurt in London's image. What it has failed to buy, it persistently tries to undermine.And in briefing against the UK as a viable financial centre in the absence of a deal, their true motives are self-evident. London does not need Europe from the perspective of its financial centre. Indeed, if the UK left Europe and could prevent the plundering of ownership of its infrastructure assets (e.g. airports, water, financial markets) then it would have far greater control over its own destiny. Yes, the UK needs trade with Europe - but it does not need to be part of Europe to do that trade unless Europe adopts extreme protectionist measures.The cost of being in Europe, administratively in both companies and government, is enormous. The UK could (political considerations aside) dump hundreds of thousands of government jobs, millions of square feet of office space, save hundreds of millions of pounds on air and other travel for bureaucrats whose sole function is to liaise with the EU.Yes, in some respects, the UK needs Europe but not as much as Europe needs the UK. And, for the first time since before the Maastricht Treaty signed away chunks of sovereignty, a British Prime Minister has recognised that and told Europe that there are limits to how far into nationhood it should be allowed to go.

Bravo.