David Cameron claimed last night that he had safeguarded Britain’s position in Europe as European Union leaders extended a lifeline to Spain’s tottering banks.
At the end of two days of fraught negotiations in Brussels, the Prime Minister said he had ensured that the UK would not be drawn into a planned “banking union” while securing explicit safeguards for the single market.
He also hailed a deal struck by the 17 eurozone members in the early hours of the morning which will enable cash from EU bailout funds to be channelled directly to struggling banks without adding to government debt.
“For the first time in some time we have actually seen steps taken that I think the markets will see are trying to get ahead of the game,” he said.
“They need to be followed through, and I hope there won’t be a lot of quibbling and worrying about ‘is it too far’ and the rest of it. If they want to save their currency they have got to get on and do it.”
Mr Cameron, who is under pressure from Conservative backbenchers to stage a referendum on the UK’s relationship with Europe, also mounted an impassioned defence of the Britain’s EU membership.
Describing himself a “practical Eurosceptic”, he said the important concessions that he had won on banking union, on the single market, and on the new European patent court showed Britain could stand “proud and tall” in Europe.
“I am actually confident that Britain – fighting, standing up for itself in Europe – can secure good deals in Europe,” he said.
He went on: “I think we should go into this argument confident that we can shape a relationship with Europe that benefits the United Kingdom.
“We should be standing proud and tall in Europe.”
Mr Cameron said he fought in the negotiations to remove language implying banking union could be extended to all 27 member states – ensuring British banks would continue to be regulated by the Bank of England.
“We have to stand behind our own banks but I don’t want British taxpayers guaranteeing eurozone banks, Spanish banks or Greek banks,” he said.
The agreement reached at the Brussels negotiations came after Italian Prime Minister Mario Monti and Spain’s Mariano Rajoy faced down Germany’s Chancellor Angela Merkel in a tense summit showdown.