Britain isolated after ‘bulldog’ Cameron vetoes EU euro plans

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BRITAIN’S future in the European Union remains unclear today after David Cameron refused to sign up to a European-wide agreement to save the euro.

The Prime Minister took the unprecedented decision to veto the new treaty designed to restore economic stability to the EU, saying it failed to provide sufficient safeguards for the nation.

Britain, which is outside the euro, led the push against a treaty tying all 27 EU countries to tighter fiscal union, arguing it would threaten its national sovereignty and London’s financial services industry.

But French president Nicolas Sarkozy said Mr Cameron’s demands for exemptions in return for joining were “unacceptable”, while Germany’s chancellor Angela Merkel – the driving force with Mr Sarkozy behind the new accord – said: “I didn’t think David Cameron sat with us at the table.

“We had to get some sort of agreement and we couldn’t make compromises, we had to meet tough rules.”

Some other member states expressed reservations alongside the UK but eventually of 26 nations, bar Britain, signed up to a so-called “New Accord” after Mr Cameron vetoed the initial treaty.

The new accord promises to introduce strict oversight over national budgets in a bid to convince markets that the euro has a future despite the crippling debt crisis.

It commits all eurozone countries to write into their national constitutions an agreement to balance their budgets, with structural deficits restricted to no more than 0.5 per cent of gross domestic product.

States whose deficits grow beyond three per cent of GDP will face automatic sanctions and members must also submit national budgets to the European Commission, which will have the power to request that they be revised.

Mr Cameron’s veto predictably won the backing jubilant eurosceptic Tory backbenchers but raised concerns that Britain now risked isolation in Europe.

London mayor Boris Johnson said the Prime Minister had “played a blinder” in Brussels while Tory MP Robert Halfon said he showed “bulldog spirit”.

Labour leader Ed Miliband said, however, the Prime Minister had put party interests above those of the nation,

“It’s a terrible outcome for Britain because we are going to be now excluded from key economic decisions that will affect our country in the future.

“Frankly, David Cameron mishandled these negotiations spectacularly. He has spent many months, not really promoting the national interest, but more interested in dealing with the splits in his own party. That has served Britain very badly and I fear for the consequences for our country.”

The veto also raised the question of division inside the coalition Government with some members of the traditionally pro-European Liberal Democrats expressing their disquiet, with Lib Dem MEP Chris Davies accusing the Prime Minister of “betraying Britain”.

Senior Lib Dems in the coalition, including Deputy Prime Minister Nick Clegg, insisted they supported Mr Cameron. Mr Clegg admitted he “regretted” the failure to reach agreement overnight, but said the coalition Government was “united” on Mr Cameron’s demands for safeguards to protect British interests.

“I think that any eurosceptic who might be rubbing their hands in glee about the outcome of the summit last night should be careful what they wish for, because clearly there is potentially an increased risk of a two-speed Europe in which Britain’s position becomes more marginalised, and in the long-run that would be bad for growth and jobs in this country.” he warned.

In a dawn press conference, the Prime Minister himself insisted that what he decided was “the right thing for Britain – a tough decision but the right one”.

He declared: “I had to pursue very doggedly what was in Britain’s interests, which is very difficult in a room where people are pressing you to sign up to things because they say it is in all our interests.”

Downing Street said that the EU institutions would have to “prioritise” the interests of the 27, but Commission President Jose Manuel Barroso dismissed suggestions that the new group would be legally blocked from using them.

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