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10:17pm UK, Friday December 09, 2011
They have agreed to disagree before – most notably over the Iraq War – but this is the first time that the European Union has split apart on a fundamental issue.
On one side, the vast majority of EU members: 23 countries out of a total of 27, including all 17 eurozone members, five euro applicant countries and Denmark – which has an opt-out like Britain, but which is under new management with a left-of-centre government.
On the other side, four EU members, none of which belongs to the single currency: Britain, Hungary, the Czech Republic and Sweden.
Although David Cameron has good relations with the other three leaders, this is in no sense a solid alliance – the Czechs and the Swedes are reserving their position subject to consulting their domestic parliaments.
:: February 2010 Austerity measures unveiled by Greece amid debt totalling 113% of GDP and highly critical EU report
:: May 2010 Eurozone countries and IMF announce 110bn euro bailout for Greece
:: November 2010 Ireland receives EU and IMF bailout of 85bn euros
:: May 2011 A 78bn euro bailout is agreed for Portugal
:: September 2011 Italy passes a 50bn euro austerity budget
:: December 2011 UK and Hungary block EU agreement on new treaty
Britain’s new isolation centres on the City of London.
The UK alone accounts for more than half of the EU’s financial services industry, so it would have been hit disproportionately by any European curbs on its activities.
As Mr Cameron put it at a 6am news conference after the break up of all-night negotiations: “If I couldn’t get adequate safeguards, I wouldn’t agree (to it)… this (fiscal compact) is not in Britain’s interests.”
French President Nicolas Sarkozy, who faces a re-election battle in May next year, was quick to point the finger of blame at perfidious Albion, insisting the UK could not be “an exception”, and had to be put aside if it would not comply with the new agreement.
But the British Prime Minister claimed it was the others who had changed, not him.
He continues to stand by existing EU rules and says he will not allow institutions such as the European Court of Justice to be used to police the new eurozone rules.
Mr Cameron brushed aside my suggestion that he should consult either the British Parliament or people (in a referendum) on the new settlement.
He argued the EU already accommodates variable geometry with different groups of members belonging to different organisations, such as Nato and the Schengen open borders arrangement.
Given the mood of eurosceptic dissent in Tory ranks, this is probably a good outcome for Mr Cameron as far as his own party is concerned, although he will come under pressure to further consolidate the UK’s newly-detached position.
Roger Helmer, the Conservative MEP, immediately sent out the Twitter message: “Credit where it is due. Cameron has shown some backbone in Brussels. Now need to talk repatriation + disengagement.”
:: Read more on the eurozone crisis