Britain sues the ECB

As the EU debt drama continues unspooling like a perversely watchable soap opera (the FT’s Neil Hume describes it as ‘eurozone crisis porn’), an intriguing sub-plot has emerged: Britain is suing the European Central Bank. The Treasury is unhappy with an ECB move to limit the kind of euro-denominated products that can pass through UK clearing houses, suspecting it’s a bid to shift financial activity from London to Paris/Berlin. So it’s taking legal action, the first of its kind by an EU member state.

This is not the first UK-EU disagreement that has surfaced in recent months, underlining the tensions between Britain and the Continent as financial centres across Europe fight over a (shrinking) business pie. The UK is also deeply opposed to the rather sinister-sounding ‘Tobin tax’ – a broad levy on financial transactions – that is being pushed by Germany and France. And at last weekend’s G7 meeting George Osborne said, sternly, that Britain would fight to keep its economic sovereignty against a eurozone “caucus” seeking to run as a “fiscal union”.

It all adds up to the new wave of euroscepticism sweeping through the UK political class (though polls have suggested that the British public had been sceptical somewhat earlier).

On a wider level, there’s some irony in the fact that the UK and the EU are squabbling over euro-denominated transactions. Who even knows which countries will still be using the euro by the time the year is out? Exactly what kind of euro will be cleared in clearing houses come Christmas?

The EU edifice is now so large that energy is expended on it as a matter of course. But in an increasingly surreal financial world, one can’t help feeling that if battles must be waged, it’d in a sense be more worthwhile to fight over currencies that have shown some mettle in past months – the Swiss franc, the Norwegian krone, the Aussie dollar, the Japanese yen.