Growing Conservative anger over Europe will be further inflamed today by a German rejection of Britain’s demand that the eurozone rescue deal must include legal protections for the City of London.
Owen Paterson, the Northern Ireland Secretary, broke ranks by declaring that backing a more integrated eurozone would make it “inevitable” that the Prime Minister would have to give voters a say.
Boris Johnson, the London Mayor, said Mr Cameron would have “absolutely no choice” but to hold a referendum. EU leaders were “in danger of saving the cancer and not the patient”, he said.
Mr Cameron also suffered embarrassment in the Commons as his backbenchers repeatedly challenged his European strategy, telling him to fight harder to win back powers from Brussels. Ed Miliband, the Labour leader, mocked the Prime Minister for failing to deliver on promises.
Mr Cameron travels to Brussels on Thursday for a summit on plans to resolve the eurozone debt crisis with a treaty that further integrates the fiscal systems of countries using the single currency.
Despite warnings that failure to agree a deal will lead to a catastrophic loss of confidence in financial markets, some European officials were pessimistic, suggesting that big decisions could be postponed.
France and Germany have said a treaty should be finalised by March. Paris and Berlin yesterday circulated a proposal for fiscal union that also suggests a tax on financial transactions between banks within the eurozone.
The US government has called for a swift resolution to the crisis, and President Barack Obama is understood to have discussed the summit with Mr Cameron yesterday.
Tory MPs told Mr Cameron the summit was a “once-in-a-lifetime opportunity” to win back power from Brussels in exchange for giving his consent to the fiscal union. Andrew Rosindell challenged Mr Cameron to “show some bulldog spirit” at the summit. John Baron demanded “a fundamental renegotiation of our relationship with the EU”.
But the Prime Minister insisted that his “key aim” was saving the euro, signalling that the repatriation of powers must wait. He has also ruled out a referendum on the rescue deal. Mr Cameron is trying to placate his party by insisting that he will veto any deal that does not offer clear assurances that the City will be shielded from EU regulation.
Almost 30 Tory MPs and peers have signed a letter to The Daily Telegraph telling Mr Cameron it is “imperative” he gets protection for the financial sector. “Without strong action, the present drift seriously threatens both British jobs and Exchequer revenues,” they warn.
Germany yesterday dismissed Mr Cameron’s claim for concessions. A senior official insisted that non-eurozone countries had no grounds for concessions because the treaty changes would not affect them.
“Nothing has been proposed that involves new treaty obligations for Britain so I cannot see what the big issue is,” the official said. “We don’t want a solution when that solution leads to demands from others to reopen treaties.”
In a tactic designed to isolate Britain and split the 10 non-eurozone EU members, Angela Merkel and Nicolas Sarkozy yesterday invited the 23 members of a “Euro Plus” economic pact to monthly summits.
The move, which splits non-euro countries such as Poland, Sweden and Denmark away from Britain, will lead to decisions on broader economic policy being taken without British involvement.
The Telegraph
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