Tuesday, December 13, 2011

What precisely is David Cameron’s EU strategy?

This is a guest post by Zach Johnstone:

The events of the last few days demonstrate precisely why predictions have no place in politics. As Cameron departed for Brussels on Thursday the script was ostensibly written; despite promising a resolute defence of British interests there was little to suggest that the Prime Minister intended to act any differently to his recent predecessors. Indeed, he had conspicuously refused to even use the word ‘repatriation’ at Prime Minister’s Questions on Wednesday – his focus was instead on the imperative need to tackle the euro-zone crisis and to prevent a collapse that would be profoundly damaging not only to our neighbours but to Britain too. The stage was set for a Chamberlain moment – nothing but submission was expected from a prime minister bound by coalition and up against overwhelming diplomatic pressure. And yet by the time he arrived back in the UK the comparisons were, instead, firmly with Thatcher. In the face of the Franco-German alliance’s refusal to allow the United Kingdom exemption from financial services regulation that would negatively impact the City Cameron did what few leaders have dared in recent decades: he stood up to Brussels.

On the continent the reaction to British defiance was as immediate as it was contemptuous. One French diplomat asserted that Britain’s stance is, mutatis mutandis, like a man who goes to a wife-swapping party without bringing his wife, whilst another said that it was a ‘blessing’ that would enable the other 26 member states to move more quickly with implementing financial reforms. This, of course, reflects the view of Sarkozy, for whom the exclusion of Britain ‘is a famous political victory’. President Nicolas Sarkozy had long favoured the creation of a smaller, ‘core’ euro-zone, ‘without the awkward British...that generally pursue more liberal, market-oriented policies’. Unhindered by the chronic recalcitrance of Britain, France and Germany are free to push ahead with the two-speed Europe they have long sought. For her part, Merkel expressed the opinion that Britain ‘was (n)ever with us at the table’ – 20 years to the day after negotiating an opt-out from monetary union at Maastricht, the British were once again seeking special treatment rather than moving forward with other member states towards ‘ever closer union’. There was initially talk of Sweden, Hungary and the Czech Republic joining Britain in rebuffing the proposed amendments to the Lisbon Treaty – and they may still do so after consulting their respective national parliaments. However, for now, the United Kingdom stands alone.

While the European reaction was immediate, it is only now that the domestic fallout from Cameron’s ‘veto’ is beginning to unravel. Having initially enjoyed nearly unanimous support in both the media and Westminster (save for the ubiquitous Miliband who, in typical fashion, offered plenty of disapproval but no credible alternative) opinion has become fractured, and nowhere more so than at the heart of the Coalition. Nick Clegg’s initial praise for the Prime Minister’s ‘modest and reasonable’ demands has long since been cast aside: the Deputy Prime Minister has instead chosen to placate the dissatisfaction that courses through his own party by vocalising his deep dissatisfaction at the events of the summit. Britain’s refusal to play the diplomatic game, he avers, will harm British interests in the long run by leading to ‘isolation’ and ‘marginalisation’. To some extent Clegg’s change of tune is unsurprising: the latest Populus poll indicates that 51% of Lib Dems are unhappy with Cameron’s decision, while figures such as Cable and Ashdown are incensed at the way in which the Prime Minister handled the summit.

But the LibDems’ discontent should not overly trouble Cameron: for all Cable’s bluster there is little chance of him stepping down as Business Secretary, and with the party struggling to reach double figures in polling, they are acutely aware that an outright Coalition split would be tantamount to political suicide. Despite not even turning up to the Commons for yesterday’s EU statement, later saying that his presence would have caused an unnecessary distraction (something his noticeable absence did quite satisfactorily), Clegg has insisted that the Coalition is ‘here to stay’, a sentiment reiterated by Danny Alexander. The Coalition’s junior partner may bemoan the Conservatives’ European policy and even attempt to thwart it in the coming months, but there is no risk of disintegration. What is far more significant for Cameron is that he has succeeded in uniting his party over what is easily its most divisive issue and won over vast swathes of the mainstream media.

What should worry him, however, is the pressing need to decide where to go next.

Amidst the back-slapping and optimism within the Conservative Party, Cameron’s MPs remain acutely aware that in ‘effectively’ utilising his veto in Brussels, the Prime Minister actually did far less than he had previously promised he would do. In requesting immunity from the proposed financial services tax and other fiscal measures Cameron sought only to maintain the status quo: there was no talk of repatriation and no spectre of renegotiation, two issues that punctuated Cameron’s rhetoric throughout the run-up to the general election last year. That the Prime Minister’s ‘effective veto’ is such big news owes not to his fulfilment of any manifesto pledge or ‘cast-iron guarantee’ but to the fact that previous prime ministers did not dare to stand up to the EU in such a forthright manner. Cameron’s decision was, for this reason, rather gutsy – in the face of overwhelming diplomatic pressure he placed integrity before complicity in a way that few heads of nation states have previously dared – but it was not analogous to Britain setting out its desire to renegotiate its terms of membership.

The frustration at Cameron’s unwillingness to hold a referendum and his refusal to back up talk of repatriation with substantive action may have been assuaged for now, but failure to maintain momentum will cause the same dissatisfaction exhibited at the recent Commons referendum motion debate to percolate through once more. Cameron made it clear in yesterday’s House of Commons statement that he wishes to see Britain remain ‘a full, committed and influential member of the EU’. But with referendum calls from Iain Duncan Smith and Boris Johnson, in addition to a sizeable minority of backbenchers, it will not be long before the Prime Minister is forced to articulate his precise vision and the extent of this commitment. For, at present, so much is still uncertain – will there be a referendum? A renegotiation? Will the Prime Minister maintain his opposition to the Euro-26 making use of the EU’s institutions to impose their new fiscal measures?

A prosaic and indistinct commitment to returning powers at some point in the future will not satisfy those who view last week’s actions as representing, at best, the start of something seismic, and at worst an ample opportunity for Britain to at least begin to renegotiate its relationship with the EU.


Blogger Manfarang said...

Now where did I see inaction against a looming financial crisis before?
Yes that is right Thailand 1997!
And it spread to other countries in Asia.

13 December 2011 at 09:39  
Blogger bluedog said...

Cameron's implied veto at Brussels is looking more and more like a one off knee-jerk. Perhaps Dave was merely reacting to the realisation that he had been royally shafted by Sarkozy. Recall that Dave flew to Paris on 1st December to discuss the scheduled meeting in Brussels at a private session with the Dwarf. We now know that Dave did the 'honourable thing' and told Sarkozy his exact game plan. Sarkozy characteristically betrayed Dave's confidence and prepared to stitch him up. Dave needs to understand that France has now declared itself to be the diplomatic enemy of the United Kingdom. This is a very serious development and there is no need to be polite to the French, or to show them any mercy.

Sadly, Dave now seems completely paralysed and unable to exploit the opportunity he has created by mistake. Some suggestions:

1) Domestically, call the Lib-Dems to order and demand that Clegg cease his attacks forthwith. The threat - dissolve the Coalition and go for a snap election. Probably needs to be done anyway.

2) Externally, develop a strategy to assist struggling eurozone countries with a default.

3) Canvas the weaker members of the compliant 26 and try to get them to defect from the treaty group.

The UK no longer has a vested interest in the survival of the EMU and it is incorrect to pretend that it does. The Franco-German alliance seeks to destroy British power in the EU, and the correct response is to financially cripple them by way of riposte.

Wield the sword, Dave, you will only get one chance. Seize the initiative and do something effective for once.

The aim: to create a European free trade area based on free market principles with the UK as its leader.

13 December 2011 at 10:28  
Blogger Hereward said...

Renegotiation with the EU is pointless. Whatever France and Germany want the rest lamely go along with. The EU is not prepared to make any accommodation for free market principles, deregulation, reasonable safeguards or national opt outs. They are an intransigent bloc dominated by an East German mindset that only understands state control, a state planned economy, tax harmonisation, and piles of rules and regulations. The whole raft of socialist economic dogma that will ultimately strangle competitiveness and lead to the same fate as the Soviets. We either give in or get out. There is no realistic middle way.

Just look at the reaction in the European Parliament today. Toys are flying out of prams in all directions. Refusing to speak English. Demanding a cut in our rebate. This speaks volumes about their attitude. Compulsion and retribution. Comply or else.

Renegotiate, frankly I wouldn't bother. Leave them on the Euro Titanic. Its future is assured. We were sensible enough not to board in the first place and how they hate us for being right about the folly of their single currency.

13 December 2011 at 11:21  
Blogger Preacher said...

IMO Mr Cameron should ditch the deadwood Lib Dems. Build upon the stand he has made, give the people a referendum & act on it.
He has delivered a slap in the face to the Franco German alliance. Now he must follow it up with a knockout punch, unlike a well known British Boxer whose showboating snatched defeat from the jaws of victory recently.
If Dave calls an election to finish off the wobbly Lib-Dems & doesn't get a majority, turn to Farage & UKIP for a coalition.

13 December 2011 at 12:01  
Blogger Manfarang said...

"The aim: to create a European free trade area based on free market principles with the UK as its leader."
Britain already did.It's called EFTA.

13 December 2011 at 14:11  
Blogger Manfarang said...

Cameron said the UK was going to stay in the EU (and he going to sign the accession treaty for Croatia to become a member)so why would he hold a referendum? He is only bound to by statute if a treaty gives the EU more powers.

13 December 2011 at 14:27  
Blogger Berserker said...

I agree with Wary old Hereward and the Preacher that we should shish kebab the LibDem crew. Isn't it strange that ex MEP and German loving Clegg suddenly changed his spots from being quite accommodating - did his Senorita use her powers of persuasion? Or was it old Bessotted with Europe, Paddy?

Now Bully boy Barroso is having a go at us but of course covering his tracks by saying that still need the UK in Europe. You bet your life they do at £50 billion a day. If we ever do get to repatriate some of our powers (a forlorn hope really) then can we cut down our contribution?
Europe offers us nothing. The Euro cannot survive.

Call an election Mr PM and see those silly Libs consigned to the scrap heap and ask genuine people like Frank Field and the not so genuine but effective Farrage to join the Conservatives.

13 December 2011 at 14:55  
Blogger Manfarang said...

The DUP are using one of their days to call a debate on Europe in the Commons. Maybe you should ask them to join with the Conservatives.

WV undempud

13 December 2011 at 15:26  
Blogger Mr Integrity said...

Your Grace,
I wonder what Nigel Farage might have to say about Lord Britain’s comment on radio four yesterday that "no serious politician considers coming out of Europe a real option"

13 December 2011 at 16:06  
Blogger UKIP said...

The great escape!

'Influence' in the EU - What do we get in return?


13 December 2011 at 16:51  
Blogger Oswin said...

Clegg is dummy-spitting and creating even greater uncertainty. His disingenuous bleatings harm our country.

It's time to stand firm, keep our powder dry, and await whatever is yet to come...and only God knows what that will be. We sure do live in interesting times.

13 December 2011 at 16:52  
Blogger Andy JS said...


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Win £200 of free Ladbrokes bets by correctly predicting the result:


13 December 2011 at 16:59  
Blogger Roy said...

I suspect that David Cameron does not have a long-term strategy. He is probably just making up policy as he goes along - in other words just reacting to events.

The EU, from its very inception, has appeared to be a Franco-German conspiracy. I know that sounds paranoid but look at the way the Common Market introduced its common fishery policy, giving the existing members access to our much richer fishing grounds, just before Ted Heath signed on the dotted line.

The EU has given us access to continental markets, which we could have had anyway just like Norway and Switzerland, and in return we have had to loosen our ties with Commonwealth countries that came to our aid in both world wars, subsidise French agriculture, and implement a lot of bureaucratic measures one of which puts lives at stake; newly qualified hospital doctors have much less practical experience than they would have had if it were not for the working time directive.

The EU has for years turned a blind eye to corruption on a huge scale, as its auditors keep pointing out but are Sarkozy and Merkel worried? Is the Guardian and the BBC worried? Is David Cameron worried?

13 December 2011 at 17:55  
Blogger Office of Inspector General said...

Zach. The Inspector doubts that Cameron has a strategy, and as Roy says, is thinking on his feet and reacting as required. Poor show, that prime minister…

Now for a REAL strategy. Call a snap election AND a referendum at the same time and for the same day ! Cameron will go down in history as one shrewd operator…

Imagine the outcome – an outright conservative victory for sure, and a people’s mandate to do what ever it takes. Plus the libdem pinkies kicked off the playing field.

Couldn’t really ask for better – what !

13 December 2011 at 18:15  
Blogger Albert said...

What precisely is David Cameron’s EU strategy?

He hasn't got one, because it never occurred to anyone that France and Germany would be so mean as to refuse his perfectly reasonable requests (hence no-one in this country seems to think he should have signed). After all, France would veto a treaty that did not protect her agricultural interests, and Europe as a whole is being made poorer because Germany is effectively vetoing any serious financial response to the debt crisis. So who are they to complain?

But if reason and real generosity were governing this situation, we wouldn't be starting from here. There wouldn't be a Euro crisis because there wouldn't be a Euro.

13 December 2011 at 19:07  
Blogger Corrigan1 said...

Can I just remind everyone that it was unregulated market freedom which brought about the present crisis? And that a continuation of unregulated market freedom is what Cameron is defending here? And that this does not appear to matter to the English (I won't say "British" - it's not the same) so long as he appears to be sticking it to Johnny Foreigner? You guys are actually prepared to take it up the tailpipe a second time so long as you get to sing "Rule Britannia" while it happens. I'm starting to understand this English fascination with dominatrices.

13 December 2011 at 19:54  
Blogger bluedog said...

Mr Manfarang 14.11, I remember EFTA well, hence my choice of words. The UK left to join the EU. It's now time to rejoin EFTA in addition to 'membership' of the EU.

At this stage it is in the UK interest to remain notionally inside the EU in order to have greater influence in the destruction of the EMU and the EU.

The Eurocrats are running scared of Britain, they can sense that their gravy train is about to be derailed. Oh for a political leader who will confirm their fears.

Boris, where are you?

13 December 2011 at 20:00  
Blogger Albert said...


Can I just remind everyone that it was unregulated market freedom which brought about the present crisis? And that a continuation of unregulated market freedom is what Cameron is defending here?

Hardly an area of expertise for me, but I understand that the UK is wanting regulation - it's just that the EU regulation is the wrong regulation.

This crisis could have been dealt with much better without the Euro, and it wouldn't have cost so much democratic capital either.

13 December 2011 at 20:04  
Blogger bluedog said...

Mr Corrigan @ 19.54, you have drawn a Marxist conclusion about the current economic difficulties. The problem is in fact too much government interence in the workings of the free market.

There is an interesting comparison to be made between two historical figures, both of whom were profoundly influenced by the events of 1848. Karl Marx is well known and you appear to have absorbed his thinking. Less well known is the French economist and philosopher Frederic Bastiat, who was profoundly influenced by the repeal of the Corn Laws in the UK at the instigation of Richard Cobden and others.

It is somehow ironic that dirigiste France could produce a fine liberal thinker but thanks to 1848 it happened.


Your insult du jour for this insight?

13 December 2011 at 20:17  
Blogger Martin C said...

Before the summit, Cameron and Clegg had agreed a set of requirements that were so minor - merely seeking to restate the status quo and in no way affecting any rescue package the for the eurozone - that Cameron honestly didn't believe it would be rejected.
But it was; and to Cameron's credit he used his veto which was the honourable thing to do.
However, if he now agrees to allow the 27 to use EU institutions to enact their resolutions - then he has gained precisely nothing, and it will be proven that in fact our veto was meaningless.
We must abide the eu institutions and if they are allowed to enact their financial regulation and transaction tax using them then we must obey irrespective of veto. (Or leave the eu, which Camerlegg wont do).
So that is the next battle. The use of full EU institutions to enact eurozone-only treaties will sink us.

13 December 2011 at 20:47  
Blogger Martin C said...

Corrigan: Can I just remind everyone that it was unregulated market freedom which brought about the present crisis? And that a continuation of unregulated market freedom is what Cameron is defending here?

Sorry, no. Completely wrong. I cant let that pass.
The problem is high-spending european governments living well beyond their means, borrowing the money to do so, for many years, so amassing colossal national debts.

And this is badly exacerbated in the eurozone because they are in lockstep with a very powerful economy that did NOT do that: Germany. So they cannot take the usual exit, devaluation.

And as european politicians never blame themselves for their own incompetence, so they seek a scapegoat. "It's all the financial market's fault and it started in the Anglo-Saxon countries." Which is arrant nonsense, but goes down well to the home crowd in France.

Fact is, France's national debt is big enough to endanger the French economy. Pure and simple. They are desperate for money and dont care where it comes from.

The unedifing sight of an EU delegation going to seek loans from China should tell you something. Countries where the per-capita income is 30k euros seeking loans from a country where per-capita income is 5k. Yeah.

13 December 2011 at 21:05  
Blogger Corrigan1 said...

Sorry, Martin C, but just remind me: who was it that owned the banks that that every taxpayer in Europe is now bailing out? Was that the 'high-spending European governments' or was that their shareholders? And just to clarify, who was it that was running these banks? Would that be the 'European politicians who never blame themselves' or would it be the masters of the universe currently resident in such places as the City of London? You know, the guys who've just helped Cameron find his inner bulldog.

13 December 2011 at 21:42  
Blogger Berserker said...

Sarkozy could lose in the first round of French elections.
He could be replaced by socialist Francoise Hollande an even more miserable prospec for the UK or as the natives might say: ca va de mal en pis! So out of the frying pan... then there's old de Villepin putting his elegant boot into his hated rival.
Then there's Marine as well.
No wonder Bling bling is looking frayed.

13 December 2011 at 21:45  
Blogger john gibson said...

There was no treaty for him to veto.
John Gibson

13 December 2011 at 23:28  
Blogger Martin C said...

@ Corrigan1
Not every taxpayer in Europe is bailing out their banks; we have and the Irish did back in 2007 (to the tune of much French schadenfreude at the time) but France has not even acknowledged her own problems yet; French banks are still holding Greek debt at face value may the lord help them.
Most importantly we did not need to “bail out” our banks to anything like the extent that we did. Under a truly capitalist system, Northern Rock, RBS, HBOS etc. would have gone bankrupt. The government could have stepped in and guaranteed the depositors, and no more. It really galls me to see Fred the Shred get his 18m pension, and his cronies still in positions of power at RBS and still receiving pay and bonuses as though it were a successful concern, on the back of the taxpayer, the British working people. But the debt was nationalised; what should have happened is the bondholders, speculators, shareholders and professional counterparties taking a severe haircut.
Unfortunately at the time we were being run by a stupid and incompetent government, who spent so hard they ran a 40bn pa deficit throughout seven fat, boomtime years, believing that they had banished boom and bust, and who could see no other solution to any problem extant other than to firehose taxpayers money at it. We are now paying the horrid price for all this.
The Eurozone problem is one of sovereign debt. Governments have spent too much. Markets no longer believe they can pay it all back. Markets don’t want to lose all their money, so they are charging a risk premium which they will use to hedge against default.
They now have two options: 1) Wealth transfer from those who have been prudent to those have not; 2) decoupling currency and economy to allow those who have not been prudent to price themselves back in through default and devaluation. And they really had better get on with it.
Additional regulation as proposed to the city of London will not save them (although it will probably put me on the dole). It is not even relevant to saving them; their options are as stated above. No, the proposed regulation is simply a power grab (never let a good crisis go to waste).

13 December 2011 at 23:34  
Blogger Manfarang said...

Andy JS
The country is going to the dogs.

The remaining EFTA countries have a "membership" of the EU either through the EEA or in the case of Switzerland,bilateral treaties.
Iceland is applying for EU membership.

14 December 2011 at 00:00  
Blogger English Pensioner said...

Today papers are reporting that Sweden, Holland, Denmark, Finland and the Czech Republic all have problems with the propose treaty. So we will never know if one of them might have used their veto had we not been first, and we are clearly far from isolated, merely the first to "put our head above the parapet".

14 December 2011 at 09:00  
Blogger G. Tingey said...

Camoron MAY have realised, finally, that the way to do business inside the EU is to do what De Gaulle did, and every French President since - say "Non" once or twice, until you get your way.
See also CAP reform (not) and Spanish hoovering of fish.
Being stroppy and obstinate can work.
About time.

The real problem with the EU is the commission.
Unelected (like bishops, I might add!) unaccountable, financially hopeless (no unqualified accounts since WHEN?) etc, etc ....

14 December 2011 at 09:13  
Blogger Jon said...

Corrigan1 - you're confusing the credit crunch (which was the match to the fuse) with the pile of gunpowder that was insolvent EU governments and structurally inefficient EU economies. They are different but linked by events.

Probably the only country which was screwed completely by their banks (so far) was Ireland - a model of a deregulated economy which is doing its best to battle back. Of course, Irish banks weren't really free market at all - they were all in bed with developers and politicians. Their folding would have been to the detriment of larger banks in other EU countries who bullied the Irish government into underwriting the debts.

I appreciate that this is a great opportunity for you to re-inforce your belief in the evils of the market, but it's not a story that tallies with the facts in the EU. It doesn't even really work in the US - where the state- backed Fanny and Freddie and the Greenspan policy of avoiding recession at all costs (even if that meant huge bubbles) encouraged the massive over-leveraging of mortgage assets.

You see evil markets, I see market participants. They're just trying to make money - each acting in their own interests without a perfect vision of what will happen in the future.

14 December 2011 at 10:38  
Blogger Corrigan1 said...

I see. So the free marketeer response to market incompetence is 'nothing to do with us, Guv. The politicians are to blame for not regulating us'. Ok, got that. So, now they ARE trying to regulate, that's still wrong because...?

Help me out here guys, because from where I'm standing, Cameron has stuck a key up your English backsides, wound you right up and protected his crooked pals in the City, all of which is fine with you because he's slaggling off Johnny Foreigner while he's doing it. That IS what's happening, isn't it?

14 December 2011 at 12:32  
Blogger Jon said...

No - the free marketeer response to market incompetence is to let the people who have been incompetent fail - others will step in and learn from their mistakes.

The free market in 2007 would also have allowed RBS, Bank of Scotland, and Scotland itself to go bankrupt, be broken into their constituent parts and the bits which were worth anything sold off to the highest bidders to make of them what they can, the rest would be scrapped. But of course, our Scottish PM at the time could never have allowed that - so it was a corporatist, not a free- market bailout.

English backsides - what on earth are you on about, you loon?! And how on earth did he "slag off jonny foreigner"? He went there, said what he wanted for our position, didn't get it and so walked out.

You should have a look at what a regional FTT would actually achieve before you say that not instituting it is solely about protecting his "crooked pals" in the city.

I'm a leftie and you give people like me a bad name!

14 December 2011 at 13:59  
Blogger IanCad said...


Didn't I see this on another thread? If so, would you be kind enough to share how you deleted it.
BTW. I do concur with your first two paragraphs.

14 December 2011 at 18:22  
Blogger William said...


For a "leftie" you seem to have a pretty sound understanding of the benefits of free markets. Is this a case of "know your enemy"?

15 December 2011 at 09:14  
Blogger Jon said...


I haven't deleted any previous threads, I think only Cranmer can do that (and I suspect he wouldn't).

But you may well have come across my scraps with Corrigan before. He seems like a good chap whose heart is in the right place, but, to my mind, has the wrong solutions. Sorry if that's less helpful than you hoped.


I consider myself a leftie on balance, because I think that, whilst the market does a good job of encouraging efficient allocation of most resources, it isn't universally effective and tends not to do the best job for the poorest and weakest in society. Here government needs to step in to create the right incentives and regulatory environment, or society is the poorer.

My experience growing up is that the Tories under Thatcher paid lip services to this, but they were prepared to sacrifice the poor and elderly on the altar of wealth for the few. Maybe they've changed. I suspect over the next few years, we'll find out as the numbers of poor swell!

What may confuse you is that I don't think that the rich getting richer is evil, as long as the poor get richer too. This (and many other issues!) sets me apart from Ed Milliband.

For me, the enduring message of the riots is that both carrot and stick are necessary to encourage the dispossessed to continue to see a point in abiding by our collective rule set. Additionally, I am repulsed by the current Labour leadership's lazy adherence to the orthodoxy that unions are proxies for the poor and dispossessed, when this is plainly not true a lot of the time.

Labour has abandoned the non- union working classes to the BNP and we're all poorer for that.

15 December 2011 at 17:34  
Blogger DanJ0 said...

This comment has been removed by the author.

19 December 2011 at 19:51  
Blogger DanJ0 said...

IanCad: "If so, would you be kind enough to share how you deleted it."

You can delete your own posts by clicking the little dustbin icon under them. They will still have been sent out by email to people though if they have checked the Email followup box when they post themselves. That's a note to anyone inclined to pretend they said something they didn't. Which has happened in the past. *cough* :)

19 December 2011 at 20:52  

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