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7:33pm UK, Saturday December 10, 2011
Chancellor George Osborne has praised David Cameron for protecting Britain’s interests by vetoing a new European treaty to tackle the eurozone crisis.
Mr Osborne denied the move, the first time ever a veto has been exercised by a British leader, risked splitting the coalition down the middle.
But amid euphoria on the Tory right that it could be the first step towards leaving the European Union entirely, the Chancellor stressed Britain would remain part of the group.
He said: “We are not exiting the European Union. We are actually protecting the European Union as an institution that serves all its 27 members, including Britain.”
“I think David Cameron as our Prime Minister has defended Britain’s national interest. It was a tough decision but it was the right one,” Mr Osborne continued.
“It is refreshing to have a Prime Minister who tells the British public what he is going to do and then goes and does that… I think it is something people really welcome.”
Asked about the potential damage to the coalition, he stressed that the negotiating position had been agreed by the Government before the crunch summit in Brussels.
“I think the Government supports the decision we have taken and David Cameron has taken,” he said.
Deputy Prime Minister Nick Clegg has also rejected talk of a rift, insisting the coalition is “united”, but went on to warn eurosceptics against “rubbing their hands in glee”.
“Clearly there is an increased risk of a two-speed Europe in which Britain’s position becomes more marginalised and in the long run that would be bad for growth and jobs in this country,” he said.
The Prime Minister hosted a dinner for some Tory MPs at Chequers on Friday night, where he was said to have been toasted.
But many Lib Dems have reacted with dismay. MEP Chris Davies accused Mr Cameron of “betraying Britain” and senior peer Lord Oakeshott said it was a “black day for Britain and Europe”.
Meanwhile, former Lib Dem leader Lord Ashdown claimed eurosceptics had “hijacked the policy of our country” and blamed Mr Cameron for allowing it to happen.
He told The Times: “The country is about to pay a very high price indeed for the fact that anti-European prejudice among the Conservative Party has now built up an anti-British prejudice among many in [the] EU, especially in Paris.”
Simon Hughes, deputy leader of the Lib Dems, insisted there were “no cracks” in the coalition but also stressed that it was “not a eurosceptic government”.
“This is a coalition government committed to being constructive about Europe and committed to only negotiating treaties if there is a proposal to transfer powers from Britain to Europe,” he told Sky News.
“There is no such proposal, there won’t be such a proposal, there won’t be a
negotiation of treaties. They should calm down.”
He added: “We are not going to be negotiating treaty change. It will not be discussed in this Parliament. There will not be the opportunity for them to pull us further away from Europe. That is off the table. Thank goodness it is,” he said.
He also expressed understanding with some of his fellow Lib Dems who he admitted were “nervous” Britain will now not be party to key decisions.
“That clearly isn’t in our interest,” he said.
Britain has been left isolated after all the other 26 EU states indicated they will sign up to the agreement creating a tougher financial system following tense talks in Brussels.
Mr Cameron refused to do so because Germany and France would not allow Britain to have special measures to protect the City of London.
I think David Cameron as our Prime Minister has defended Britain’s national interest. It was a tough decision but it was the right one.
Chancellor George Osborne
The Prime Minister stressed later that he had followed a “combined position” agreed by the Tories and Lib Dems which had been “cleared absolutely between me and Nick Clegg”.
He said at the end of the summit: “Of course this does represent a change in our relationship. But the core of the relationship – the single market, the trade and the investment, the growth, the jobs that we want to see – that remains as it was.”
He dismissed the idea that his defiance paves the way for British withdrawal or a referendum on EU membership, saying: “Membership is in our interests and I’ve always said if that’s the case I’ll support our membership.”
But Conservative eurosceptics urged him to go further in reshaping Britain’s relations with Europe.
Bill Cash, the chairman of the Commons European Scrutiny Committee, said the UK
was now on a “path towards renegotiating in a fundamental way the whole of our
treaty relationship with the EU”.
And Tory MP Douglas Carswell said: “The inexorable logic… is that Britain now heads towards a Swiss-type relationship with Euroland.”
UK Independence Party leader Nigel Farage said: “We are a step nearer the exit door of the EU. Now David Cameron has to bite the bullet and let the British people have a say on continued EU membership by calling a referendum.”
Meanwhile, Britain looks likely to face hostility from other EU members.
French President Nicolas Sarkozy said Mr Cameron had made “unacceptable” demands for exemptions from certain financial regulations in return for joining in the “fiscal compact” enshrined in the treaty change.
Unconfirmed reports suggested Mr Sarkozy told Mr Cameron: “You can’t have an offshore centre taking away Europe’s capital.”
German Chancellor Angela Merkel said: “I didn’t think David Cameron sat with us at the table. We had to get some sort of agreement and we couldn’t make compromises, we had to meet tough rules.”
Hungary, the Czech Republic and Sweden initially held back from the deal, but later indicated that they would sign up, leaving Britain alone on the outside.
There remains the possibility of confrontation over the question of whether the bloc of 26 can make use of institutions, like the European Commission and its officials, established for the benefit of all 27.
Downing Street said the EU institutions would have to “prioritise” the interests of the 27 and both Mr Cameron and Mr Osborne had referred to this issue already.
But EC president Jose Manuel Barroso dismissed suggestions that the new group would be legally blocked from using them.
:: Read more on the eurozone crisis