Since the eurozone crisis began, in late 2009, eurosceptics have been raising their profile, within the Tory party as well as to the right of the party, from UKIP to far-right groups. So much so, that within the Tory party itself, the in-fighting caused by the mushrooming of eurosceptic think-tanks and pressure groups is now quite reminiscent of the last year of John Major's Tory government, before Labour's return to power, in 1997.

Just as in John Major's days, there is an obvious element of politicking in the growing restlessness of Tory backbenchers, who are afraid of losing their seats due to UKIP's rising electoral fortunes. Just as in John Major's days as well, this restlessness is being whipped up by some senior party figures who are beginning to position themselves for a possible leadership contest to replace Cameron, at some point in the future - as former Defence Secretary Liam Fox did, on July 2nd, with a high-profile speech advocating an overhaul of Britain's relationship with the European Union and a referendum on this issue.

What makes today's situation significantly different from that in John Major's days, however, is obviously the on-going crisis in the weaker eurozone countries, which is extensively used by Eurosceptic Tories to build on the fears caused by the crisis, in order to whip up xenophobic prejudices to their advantage. It is in this light than the recent campaign for a referendum over Britain's membership of the EU, backed up by a collective letter signed by 100 Tory backbenchers, should be seen.

Cameron's narrow path

Ironically, this situation is confronting Cameron with a problem. For someone who has always been rather quick to adopt eurosceptic postures in the past, Cameron now has to tread a narrow path between the pressure of his own party's right-wingers and the challenge posed by UKIP in the ballot box - and the demands of the City.

So Cameron keeps repeating to all and sundry that the EU in general, and the eurozone in particular, are vital trading partners for British bosses, both for goods and services.

In this respect, it is worth noting that during the first quarter of this year, and despite the eurozone crisis, the drop in British exports to non-EU countries has been significantly larger than the drop in British exports to EU countries.

Financial services, Britain's main "exports" to the rest of the world, are particularly dependent on Europe. The City had been making huge profits, first out of the real estate speculative bubbles which developed in countries like Spain, Greece, Ireland and Holland, among others, in the run-up to the crisis. Then, after these bubbles imploded, the City managed to make yet more profits, by providing expensive loans to over-indebted eurozone banks and governments.

But, in the longer term, such profiteering may prove to come at high cost. According to a Financial Services Authority report at the end of June, "UK banks have aggregate gross exposures to Ireland, Italy, Portugal and Spain equivalent to 90% of their core tier 1 capital" - and these are all countries whose banking systems are now in a very dire state. Around the same time, a financial analyst quoted by BBC economics editor Robert Peston, was describing the exposure of British banks to Spain (for which an international banking bailout was being negotiated) as follows: "Amongst the UK banks, we note again that Barclays has £27bn of Spanish exposures, including £14.3bn of gross residential mortgages with only £77m in provisions; RBS has £17bn of exposures, including £6.1bn of lending; and Lloyds has £6.5bn of exposures." Peston noted that, in addition, "British banks have collectively lent just under £100bn to French banks, which in turn have lent just under £450bn into the eurozone's weaker economies".

With these very big numbers in mind, and given what they may represent for the big City banks, it is not hard to understand why Cameron has suddenly become so determined to resist his backbenchers' calls for a referendum over EU membership and so keen to see a very large banking bailout being organised in the eurozone. Even to the point of championing a rather unlikely position, for a Tory prime minister - namely the setting up of a eurozone banking union, in which the two euro heavyweights, Germany and France, would police the eurozone's financial system, while taking responsibility for organising the bailing out of any eurozone bank or government threatened with bankruptcy.

Of course, Cameron is always very careful to hedge his positions by adding some tough-sounding formulations designed to be music to eurosceptic ears. So he keeps insisting that since Britain is not part of the eurozone, British taxpayers will not pay a penny towards the bailout of its embattled members - even though British banks like Barclays, HSBC and RBS, have never turned down any opportunity to take the billions of pounds worth of cheap loans offered by the European Central Bank. Likewise, while insisting that today is not the time to hold a referendum over Britain's membership of the EU, Cameron vocally champions the idea that the present turmoil in the eurozone should be an opportunity for Britain to renegotiate its relationship with the EU - especially if the eurozone does indeed form the banking union that he, himself, advocates. In particular Cameron points out that this would be the right time for Britain to opt out of EU social legislation - which is rather ironical given that Britain has already opted out, in one form or another, of most European directives concerning workers' rights!

Sounds contradictory? It certainly does. But then, British capital wants to have its cake and eat it. It wants the benefits of the EU, plus stability in the eurozone, so that the City can resume its profitable role as Europe's offshore financial centre and as the main channel for the flows of non-European capital in and out of Europe - while insisting on keeping its contribution to a minimum level. And Cameron just does what he's told!

The euro bogeyman

Ironically, there is one idea at least, or rather one prejudice, that all British politicians seem to like to whip up, whether Tory, Lib-Dem or Labour, eurosceptic or not - that the primary cause of all ills in the British economy is the eurozone crisis.

Never mind that the present crisis started in the US and that the first European countries to be hit were, in that order, Britain (with Northern Rock, the first and so far, the only bank run in Europe), Iceland and Latvia - none of which were part of the eurozone!

Listening to these politicians, it would seem that the eurozone crisis is some kind of devilish phenomenon, which wouldn't have happened without the existence of the single currency. As if the turmoil in the eurozone wasn't the local expression of a world crisis which has devastated, and is still devastating, the whole planet!

Of course, the size of the eurozone economy means that its destabilisation by the world crisis can only have vastly more damaging consequences than the destabilisation of the British economy, which is just over 10 times smaller. But that is stating the obvious and has nothing to do with the single currency per se.

What does have to do with the single currency - but this is the kind of criticism that eurosceptics would never raise - is the fact that despite its adoption, the eurozone has remained a collection of heterogeneous independent countries, each with its own laws, its own states and its own capitalist classes, who use these states to defend their specific interests against their competitors, including within the eurozone itself.

In other words, the weakness of the eurozone isn't the lack of "sovereignty" of its constituent countries, due to the introduction of the euro - as most British politicians would argue - but rather the lack of integration of these countries into a single economic, social and political entity, which would be freed once and for all from its antiquated internal borders.

Those who argue that if the weaker eurozone countries had their own currencies, they would have been able to devalue and avoid some of the pain they have suffered, conveniently choose to forget three important points. First, that the cost of a devaluation would be at least as bad, if not worse, for the majority of the population, in terms of inflation and reduced standards of living. Second, the fact that the main cause of the predicament in which countries like Greece, Ireland, Spain and Portugal find themselves, is the extortionate borrowing costs imposed on them by the "market" - in other words by the big international banks which rule over this market and are making a killing out of their difficulties. And third, that it is precisely the fact that the eurozone countries retain too much "sovereignty" which allows their governments to have their own bonds, thereby making it possible for speculators to bet on the weakness of a particular eurozone member state, when they would probably never dare to bet on the weakness of the eurozone as a whole.

Finally, if the euro, in and of itself, was playing such a decisive role in this crisis, then the EU countries which are outside the eurozone should be somewhat better off. But are they? As we discuss in another article in this issue of our journal, Britain, for one, still has to drip-feed its banking system on public funds - which is certainly not a sign of economic health - whereas in comparable eurozone countries like Germany, France or Holland, the banking system seems to remain afloat without any similar massive state aid, at least for the time being. Another comparative measure is provided by the unemployment rates compiled by Eurostat. They show that in March this year, the jobless rate was 10.8% across the 17 countries of the eurozone. But it was 9.1% in the remaining 10 EU countries outside the eurozone - which is hardly much better!

Farcical but dangerous

The anti-euro and/or anti-EU prejudices peddled by the eurosceptics of all stripe, if taken at face value, may often seem just farcical and not even worth noticing.

But they are more pernicious and potentially dangerous than that. How many times have we heard the "profligacy" of the Greek population being blamed for the economic catastrophe which affects the country?

Even today, when large sections of the population are barely surviving, when public sector wages and pensions have been cut by 50%, the minimum wage by 22%, hospital funding by 40% while malaria is reappearing, and when bread queues have become part of day-to-day life, there are so-called economic "experts" of eurosceptic stock who dare to say that in order for the country to extricate itself from its bankruptcy, the Greek population will have to learn to consume less!

Just as here, in Britain, the jobless, the disabled and more generally, the poor, are blamed for their poverty, this amounts to blaming the working population of the weaker European countries for having fallen into the trap laid for them by the world crisis first, and then by the banks, which are racketeering indebted countries.

And in the same way as here, where someone like Cameron parades in front of his electorate making inflammatory speeches in which he barely stops short of accusing all benefit claimants of some kind of fraud, the people of Europe's poorer countries, and even more so those of the Third World, are treated as petty criminals who should be kept safely at arms length, outside Britain's borders.

And this is unfortunately not only true of right-wing Tory backbenchers. On July 2nd, as Cameron was reporting to the Commons on the EU summit of the previous week, Keith Vaz, Labour MP for Leicester East and chairman of the Home Affairs select committee, stood up to ask Cameron to reassure him that the government was taking every possible step to help the Greek government to stop the "flood of illegal immigrants" crossing over into Greece from Turkey. Obviously, for Keith Vaz, these refugees were far more dangerous to the economic stability of Greece than the banks whose speculation is forcing the country to pay over 20% interest on its debt!

The next day, the same Keith Vaz issued a statement asking the government what measures had been taken in order to stop Britain from being flooded by Greek refugees in case Greece left the eurozone! How far can such xenophobic idiocy go?

Quite far, in fact, especially in period of serious hardship in which the demoralisation and disorientation of a significant section of the population can become a fertile breeding ground for such xenophobic ideas and turn them into a lethal threat for the working class.

This is why not an inch should be conceded to the more or less respectable xenophobia concealed under the disguise of euroscepticism. And this is not for the sake of defending the euro, or the eurozone per se - which, after all, will remain nothing but a dysfunctional construction as long as capitalism rules. But because it is out of the noxious seeds of anti-foreign propaganda that the worst enemy of the working class can grow.