Good decision by Prime Minister last night:
He said he would only sign a new treaty if it safeguarded the interests of Britain and wouldn’t hand over powers or rights to the EU. The Euro countries, particularly France and Germany, would not budge so he did not sign.
Key issue is Nick Cleggs reaction, which was very supportive of the PM's approach:
"The demands Britain made for safeguards, on which the Coalition Government was united, were modest and reasonable. They were safeguards for the single market, not just the UK... What we sought to ensure was to maintain a level playing field in financial services and the single market as a whole. This would have retained the UK’s ability to take tougher, not looser, regulatory action to sort out our banking system." Bear in mind Nick is a genuine and committed Europhile - and he describes our approach as modest and reasonable.
This is part of the ongoing negotiation with the EU to forge a better relationship with Europe that is based fundamentally on trade. The Europeans still need to solve the Euro crisis: for me I am surprised and think it odd that we in the UK are regulating our banks in a more thorugh and better way, [through the Vickers reforms] and the european solution is for less regulation of banks. On this issue I am sure Cameron is right.
My final comment is on the proposed Euro new Financial Agreement: the proposal they have adopted is that EU states will join a new fiscal arrangement aimed at stopping a repeat of the eurozone debt crisis.
"For eurozone countries, it means they will have to enshrine in their own national constitutions tougher budget rules which were in the Maastricht treaty, but have since been broken. These include an agreement that structural budget deficits never exceed 0.5% of gross domestic product (GDP), sanctions for those whose deficit exceeds 3% of GDP and a requirement that they submit their national budgets to the European Commission."
That is the whole problem of the Euro in a nutshell: do we really think some of these countries are going to live within their means, so that they have no debt ie 0.5% of GDP? And if they do go into debt the Eurozone countries will then fine them more money - to be paid out of debt? This is what got the Euro countries into the mess in the first place. You cannot have true fiscal union and a series of independent countries running their own finances. It is one or the other but not both - the last few years have proved this conclusively.