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Cameron's EU veto rattles UK coalition

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Published 12 December 2011, updated 22 December 2011

British Prime Minister David Cameron is grappling with a major row within in his Conservative-led coalition as his Liberal Democrat partner blasted his veto of an EU treaty aimed at tightening fiscal rules for countries using the euro.

Deputy Prime Minister Nick Clegg said yesterday (11 December) that he was "bitterly disappointed" with the outcome of last week's summit, calling it "bad for Britain".

Clegg leads the pro-European Liberal Democrats, the junior partners in an uneasy alliance which has vowed to rule until the next election due in 2015.

Despite his disappointment over the government's stance on Europe, Clegg said it would be an "economic disaster" were the coalition to fall apart now when the economy is teetering on the edge of recession.

The Liberal Democrats have seen their poll ratings slide to little more than 10% since the 2010 election.

Cameron will address parliament at 15.30 GMT today to explain the outcome of the summit.

"Basically he'll reiterate what he's said over the last couple of days about why he did what he did and why he thought it was the right thing to do," said a spokesman for his Downing Street office.

"Britain is not a member of the euro. What they were debating about is how they are organised to make sure that the euro works," he said. "In terms of other types of policy, defence, all sorts of other policy, Britain will still be very much at the centre of things."

Many of the Conservative party's eurosceptics are expected to hail Cameron's veto, making the Liberal Democrats' position even more unsustainable.

Uncertainty remains

In the meantime, the consequences of 8-9 December summit for the future of the European Union are far from clear.

Following Cameron's rejection of  the summit deal, the remaining 26 EU countries have agreed a new "fiscal compact" on tighter budget and debt rules outside the community framework.

The role of institutions such as the Commission and the Parliament remains unclear in such an intergovernmental framework. The European Parliament is expected to hold a debate on the issue tomorrow (13 December).

The markets appear largely unimpressed following the EU summit. Moody's Investors Service said last week's agreement by European policymakers offered few new measures to resolve the region's debt crisis.

The communiqué reflects the continuing tension between euro-area leaders' recognition of the need to increase support for fiscally weaker countries and the significant opposition within stronger countries to doing so, Moody's noted. 

Positions: 

Writing on theParliament.com website, Former Conservative MEP McMillan-Scott, who since March 2010 sits with the liberal ALDE group, wrote that Cameron had been shown up as "a spiv" and only used the veto to defend "jobs for the boys" and his "rich friends". He circulated the remarks by e-mail to all 754 MEPs and their staff.

The leader of Britain's Conservative MEPs Martin Callanan accused McMillan-Scott of resorting to low insults. He said: "Edward devoted a very long article today to a rather haughty hatchet job on his former leader – just because he had stuck up for Britain's freedom and prosperity."

"He should remember that the prime minister's brave and principled decision to wield the veto was made, we are told, entirely in agreement with his coalition partner – Edward's latest boss Nick Clegg.

"He would presumably prefer a Blair or Brown who would agree to anything the rest of the EU asks. But we now have a prime minister who will fight for Britain and refuse to be pushed around by Germany and France," Callanan said.

Sir Graham Watson, leader of ELDR, the European liberal political family, blasted Cameron in a written statement.

"David Cameron played his cards badly. He could have achieved the safeguards he sought  and preserved the UK's influence in Europe by ensuring reform within the EU treaty framework. Instead he upset his counterparts by holding out against bank regulation, sidelined the European Commission and Parliament and left Britain in the EU but with much less sway over its decisions. Much work must now be done to stop a slide to an intergovernmental hegemony dominated by Germany and France.

"Intergovernmental leadership is not what Europe needs. Super-qualified majority voting allows France or Germany to break the rules but not the smaller countries. Without the Commission and Parliament there is nobody to mediate Merk-kozy. But Europe needs closer economic union to accompany its monetary union so we must now ensure that the EU institutions and the Community method are part and parcel of the arrangements for the 26," Watson concluded.

In a written statement UKIP MEP and former EU Chief Accountant Marta Andreasen called for Britain leaving the EU: 

"Surrendering fiscal policy to the EU and in particular Herman Van Rompuy, Barroso, France and Germany is a recipe for disaster and the effective castration of member states power.

"Prime Minister Cameron will seek to wriggle out of giving the British people a say on whether this is the type of Europe it chooses to stay in and do business with, albeit in the second division. Now is the time to re-assess our position as part of the EU and withdraw. Our role is fast becoming a charade."

Charles Grant, Director of the Center for European Reform was also critical regarding Cameron's position:

"The outcome of the Brussels summit on December 8th and 9th is a disaster for the UK and also threatens the integrity of the single market. For more than 50 years, a fundamental principle of Britain's foreign policy has been to be present when EU bodies take decisions, so that it can influence the outcome. David Cameron, the prime minister, has abandoned that policy. Britain will not take part in a new fiscal compact that most other EU countries will join"

Simon Tilford, chief economist at the Center for European Reform questioned whether UK's decision could have an impact on the core of this crisis:

"The UK's decision to marginalise itself by vetoing a new EU-27 treaty has dominated the post-summit media coverage. And for good reason – it could prove a big step towards UK withdrawal from the EU. However, the bigger question is whether the agreement reached at the summit will do anything to address the fundamentals of the euro crisis"

EurActiv.com
Nick Clegg (left) and David Cameron
Background: 

Prime Minister David Cameron's Conservatives and the smaller Liberal Democrat party led by Nick Clegg struck an agreement in May 2010 to form Britain's first coalition government since 1945.

Clegg and Cameron have much in common. They are the same age. Cameron is the Eton-educated son of a stockbroker, Clegg the privately educated son of a banker. Cameron was at university in Oxford, Clegg at Cambridge.

Clegg has enjoyed a rapid rise since entering British politics in 2005, becoming party leader two years later.

Born to a Dutch mother and half-Russian father, and married to a Spanish lawyer, he is the most pro-European Union of the main party leaders and speaks five languages.

Clegg was an advisor at the European Commission before becoming a member of the European Parliament from 1999 to 2004.

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