guardian.co.uk,
Nicholas Watt, chief political correspondent, in Brussels, Friday 9 December
2011
 |
| David Cameron vetoed revisions to the Lisbon treaty because they did not meet his demands to protect the UK's financial services industry. Photograph: Michel Euler/AP |
Britain is
facing isolation in Europe after David Cameron vetoed a revision of the Lisbon
treaty, prompting a majority of EU members to agree to draw up their own deal
outside the architecture of the union.
In one of
the most significant developments in Britain's 38-year membership of the EU,
the British prime minister said early on Friday morning he could not allow a
"treaty within a treaty" that would undermine the UK's position in
the single market.
The move
marked a victory for Nicolas Sarkozy, who had been pressing for an
inter-governmental agreement among the 17 members of the eurozone to underpin
tough new fiscal rules for the single currency. "We could not accept
this," he said of Cameron's demands.
The French
president, who has been pressing for the formalisation of a "two-speed
Europe", was pleased on Friday when the number of EU member states
indicating their support for a separate treaty reached 23. Britain was joined
by Sweden, which rejected euro membership in a referendum, the Czech Republic
and Hungary.
Angela Merkel, the German chancellor, who had hoped to agree a revision of the Lisbon
treaty, said she believed the accord would stabilise the euro. "I have
always said, the 17 states of the eurogroup have to regain credibility,"
she said. "And I believe with today's decisions this can and will be
achieved."
Cameron
wielded the British veto in the early hours of the morning after France
succeeded in blocking a series of safeguards demanded by Britain to protect the
City of London. Cameron had demanded that:
• Any
transfer of power from a national regulator to an EU regulator on financial
services would be subject to a veto.
• Banks
should face a higher capital requirement.
• The
European Banking Authority should remain in London. There were suggestions that
it might be consolidated in the European Security and Markets Authority in
Paris.
• The
European Central Bank be rebuffed in its attempts to rule that euro-denominated
transactions take place within the eurozone.
Sarkozy,
who had faced criticisms on Thursday evening that he was isolated after
claiming that Britain was pushing for a complete opt-out from financial
regulations, rejected the demands out of hand.
Cameron
defended his decision to wield the British veto on the grounds that eurozone
members could have used the institutions of the EU to undermine Britain's
interests in the single market without his safeguards. Speaking at 6.19am local
time, he said: "I said before I came to Brussels that if I couldn't get
adequate safeguards for Britain in a new European treaty then I wouldn't agree
to it. What is on offer isn't in Britain's interests so I didn't agree to it.
"Of
course we want the eurozone countries to come together and to solve their
problems. But we should only allow that to happen inside the European Union
treaties if there are proper protections for the single market and for other
key British interests. Without those safeguards it is better not to have a
treaty within a treaty but to have those countries make their arrangements
separately."
Cameron
acknowledged there were risks in striking out alone. But he said Britain would
protect its position by insisting that the institutions of the EU could not be
used to enforce the new fiscal rules.
"While
there were always dangers of agreeing a treaty within a treaty, there are also
risks with others going off and forming a separate treaty. So we will insist
that the EU institutions – the court, the commission – that they work for all
27 nations of the EU. Indeed those institutions are established by the treaty
and that treaty is still protected."
Cameron
indicated that Britain may go further and block the use of EU institutions if
eurozone countries club together to shape financial regulations and labour
laws.
The
decision by Cameron will transform Britain's relations within the EU. Other
projects, such as the euro and the creation of the passport-free Schengen
travel area, have gone ahead without British involvement. But it is the first
time since Britain joined in 1973 that a treaty that strikes at the heart of
the workings of the EU will be agreed without a British signature. Britain
signed the 1991 Maastricht treaty after winning an opt-out on the single
currency and the social chapter.
Cameron
will be able to tell eurosceptic backbenchers he refused to sign a treaty that
would have undermined British interests. But some eurosceptics may say the new
treaty marks a major change in the EU and that the British people should be
consulted in a referendum.
Sources in
Brussels say Cameron is playing a "dangerous game" because financial
service regulations are decided by the system of qualified majority voting in
which Britain does not have a veto. Britain can form a "blocking
minority" at the moment to stop harmful legislation. But this will shrink
as more countries join the euro.
Nick Clegg
may face questions from pro-European Liberal Democrats about Britain's new
four-strong alliance in the EU. Some of the countries that have indicated they
cannot support the new treaty may change their minds.
The summit
also agreed that:
• Eurozone
countries will provide up to €200bn in extra resources to the International
Monetary Fund to help countries in difficulty.
• The
eurozone's two bailout funds, the European Stability Mechanism (ESM) and the
European Financial Stability Facility (EFSF), will be managed by the European
Central Bank.
Related Articles:
 |
EU leaders
pose for a family photo after Croatia signed an
accession treaty with the
European Union, at a summit in
Brussels December 9, 2011. (Credit:
Reuters/Thierry Roge)
|
Related Articles:
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.