Finance Commissioner Olli Rehn yesterday (12 December) brushed aside the possibility of UK legal threats and warned the City of London that it could not avoid EU financial regulation as a result of the UK veto of a last week's summit deal.
UK Prime Minister David Cameron raised the issue over the role of the EU under the intergovernmental 'fiscal compact' agreement among 26 member states reached at the 8-9 December summit.
“There are issues that are raised by this [treaty proposal] about institutions serving two masters – the eurozone and the European Union – and we need to look at those issues very carefully,” a Downing Street spokesman said immediately after the summit.
Launching the introduction of the “six-pack” – which imposes tight surveillance on eurozone members – Rehn was dismissive of any curbs on institutional use by the 26 member states that said they would go forward to create an intergovernmental treaty.
"Our legal assessment is that by far the vast majority of the measures decided on Friday can be implemented through secondary legislation," Rehn said.
EU officials: ‘Lawyers checked the details before deal’
“In the European Union institutions, saving the euro is the rule and having an opt-out is the exception so it is only natural that the EU should work on these things,” he said.
Cameron himself appeared to row back on the tone of earlier threats yesterday as he spoke in the House of Commons.
“I understand why they [the eurozone-plus group] would want to use the institutions… So in the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, and in particular for Britain,” Cameron said.
EU officials told EURACTIV that the issue of how the institutions could work on such an intergovernmental framework had been carefully scrutinised by lawyers in the Commission and Council before the eurozone-plus group announced its proposals.
They pointed out that the Commission’s memorandums of understanding relating to Greece and Portugal – negotiated in the context of the eurozone crisis – offered precedents for the institutions working along similar lines.
Fall-out from summit continues
Rehn also issued a warning to the City, London's financial district, claiming that it could not hope to bypass financial regulation as a result of the UK’s exclusion from the proposed intergovernmental treaty.
"If [Cameron's] move was intended to prevent bankers and financial corporations from being regulated, that is not going to happen. We must all draw lessons from the financial crisis, and that goes for the financial sector as well,” the Finnish Commissioner said.
Diplomats suggested that Rehn had mistaken the UK’s intention. One told EURACTIV: “The UK was not seeking to exempt the City of London from financial regulation. The substance of what the UK was seeking was reasonable and quite specific.”
The summit conclusions continued to reverberate yesterday. Cameron’s deputy and coalition partner, Liberal Democrat leader Nick Clegg was conspicuously absent from the House of Commons during Cameron’s speech yesterday. Clegg has voiced disappointment with Cameron's performance at the summit.
Meanwhile the socialist candidate for the French presidency – and poll front-runner – François Hollande lambasted the deal struck at the summit by President Nicolas Sarkozy, and said he would reopen the issue if elected next year.