Is David Cameron surrendering his veto to Europe?
If he caves in to Brussels, the Prime Minister will miss a huge opportunity.
7:00PM GMT 28 Jan 2012
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Is David Cameron about to water down his famous EU veto?
That is what Tory Eurosceptics fear. Along with many voters, they were delighted late last year when the Prime Minister refused to sign up to a new European treaty. But ahead of a crucial meeting of EU leaders on Monday, news has been leaked that British negotiators are prepared to make concessions. Fiscal union is the German-led response to the debt crisis that has threatened to consume the single currency.
After the euro’s launch, governments in countries such as Greece and Portugal were suddenly using the same currency as Germany – and were able to borrow the same rock-bottom rates. They spent wildly, running up vast debts which they struggled to maintain once the markets took fright and drove up lending costs. The proposed new rules would mean that countries inside the fiscal union would having to submit their budgets to ensure they comply with strict rules set by Brussels and Berlin. The theory is that this will restore market confidence in the eurozone’s finances.
But didn’t Cameron’s veto keep Britain out of this mess?
Sort of. In December, the states pushing for fiscal union wanted all members of the EU – even if they were not in the euro – to agree a treaty. David Cameron sought assurances that he could protect the City of London from various measures that EU bodies overseeing the financial sector want to impose. No such undertaking being forthcoming, Cameron refused to sign up. The other 26 members of the EU indicated that they would press ahead despite Britain’s veto. But afterwards Cameron said he would block them from using the EU’s institutions – such as the Commission in Brussels and the European Court of Justice – to enforce any new arrangements. This infuriated the Europhile Nick Clegg.
