UK Demands Lead to EU Split

Friday, December 9, 2011 Print Email

Prime Minister David Cameron has refused to agree to proposed European Union treaty changes on the grounds that they could damage the UK’s financial services industry, a decision which has left Britain isolated from a new breakaway ‘euro plus’ group of countries

During overnight talks in Brussels, Cameron said he was prepared to support treaty change among all 27 of the EU’s members to allow the 17-strong eurozone to take measures to tackle its debt crisis and to enforce tough new fiscal rules for the single currency.

However, early this morning the Prime Minister said he had used Britain’s veto to block the changes because France and Germany had refused to agree to a ‘protocol’ giving the City of London protection from a wave of EU financial services regulations related to the eurozone crisis.

According to the Daily Telegraph, the proposed protocol did not create any new opt-outs. However, it did require a unanimous vote, giving Britain a veto, if the EU sought to give European financial supervisors new powers to overrule national authorities, such as the FSA.

The safeguard also ruled out ‘discriminatory’ measures by the European Central Bank to restrict certain euro transactions to the eurozone, a move that would threaten thousands of jobs in London.

As a result of using the veto, Britain was left isolated this morning with just three other countries, Sweden, Hungary and the Czech Republic, as the French President Nicolas Sarkozy hailed a ‘historic’ breakaway ‘euro plus’ bloc that would pursue fiscal and economic union via a new treaty outside the EU.

This new group of 23 EU members is due to meet later today to begin work on a new, separate inter-governmental treaty to be delivered by March. The German chancellor Angela Merkel and Sarkozy also plan to invite ‘euro plus’ members to special monthly summits.

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