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Cameron vetoes EU treaty: what does this decision mean?

The Prime Minister has taken a hard line in Europe in a political gamble that could leave Britain is

By Samira Shackle Published 09 December 2011 10:35

The Prime Minister has taken a hard line in Europe in a political gamble that could leave Britain isolated.

"Where we can't be given safeguards, it is better to be on the outside," said David Cameron at 6.20am today, as he announced that he has vetoed a revision of the Lisbon Treaty.

This is a huge development. It is the first time that a major treaty, striking at the heart of the EU, will go ahead without a British signature since Britain joined in 1973. It will redefine the nature of Britain's relationship with Europe, essentially creating a two-speed EU.

As I blogged on Wednesday, Cameron was in a very tight spot politically: on the one hand, his Eurosceptic backbenchers were clamouring for a referendum, while on the other his Liberal Democrat coalition partners warned against the risks of isolating Britain.

Isolation is certainly the main worry in the papers this morning. Of the 27 member states, all but four signed up to the treaty, with just Britain, Hungary, Sweden and the Czech Republic remaining on the outside. Sweden and the Czech Republic may yet join after their leaders have consulted their parliaments.

The risk here is that Britain will not only lose influence in the UK, but that its position in the single market will be jeopardised. Defending his decision at that early morning press conference (which was held after more than 10 hours of negotiations that ran through the night), Cameron said:

Of course we want the eurozone countries to come together and to solve their problems. But we should only allow that to happen inside the European Union treaties if there are proper protections for the single market and for other key British interests. Without those safeguards it is better not to have a treaty within a treaty but to have those countries make their arrangements separately.

He insisted that he would work to ensure that any agreement works for all 27 member states, not just the 23 signed up to it.

So, Cameron will not be forced to go to Parliament with a contentious treaty, nearly 20 years after John Major's trials with Maastricht. But does this decision ease his political headache?

In short, not really. The decision has won grudging support ("Credit where it's due -- Cameron has shown backbone," said Roger Helmer MEP), but it is by no means certain that calls for a referendum will end. Eurosceptics could feasibly still argue that the new treaty marks a major change in the power structures of EU and that the British public should be consulted.

It is unclear how much Nick Clegg knew about Cameron's hardline stance on this, but the Prime Minister's calculation will be that the Lib Dems will not walk out of coalition over this issue.

The other risk here is that "Britain's interests" will not necessarily be safeguarded. Cameron made defence of the City of London his price, demanding that any transfer of power from a national regulator to an EU regulator on financial services be subject to a veto. The cost was too high, as French President Nicolas Sarkozy (who has been pushing for a two-speed Europe) explained:

David Cameron requested something which we all considered was unacceptable. We couldn't have a waiver for the UK and in my view it would have undermined a lot of what we have done to regulate the financial sector.

Financial services regulation will press ahead without Britain, then. However, the Guardian points out that these regulations are decided by qualified majority voting, in which Britain does not have a veto. It can currently form a "blocking minority" to prevent legislation from going through, but if more countries join the euro this will shrink.

Cameron has taken a huge political gamble, hoping to channel Margaret Thatcher and her intransigence in Europe, rather than John Major and his struggles over the Maastricht Treaty. It has yet to be seen whether it will pay off. The first priority must be the resolution of the eurozone crisis, which Cameron himself said is "our biggest national interest". The next stage of talks will focus on saving the euro -- without Britain's input.

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Tags: Europe Eurozone David Cameron Tories & Europe

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35 comments

Mon, 2011-12-12 12:34 — Reginald-Fah-fah

Junk Status for the Eurozone!

Fri, 2011-12-09 10:44 — swatantra

Prepare for a March GE. Dave's veto has left Britain as a 2nd class nation.
The 'great' in 'Great Britain' doesn't actually refer to its status at all, but to a larger land mass inc Scotland and Wales etc. viz GLC Great(er) London Council,is another example. Lets just refer to Britain as Britain.

Sun, 2011-12-11 05:04 — artjones (not verified)

Britain is not in the eurozone so we've never had any leverage there anyway but our no vote ensures that we don't have to contribute to future failing economies. Merkel and Sarkozy tried to stitch Cameron up with more regulations and taxes but unlike Brown and Blair he wouldn't meekly roll over and do a Chamberlain.

so who cares about not accepting Brussels eurocrats

Fri, 2011-12-09 10:50 — David Lindsay

This should never have been about protecting the City, which as much as anything else is largely foreign-staffed and mostly foreign-owned, from having to pay any tax.

Labour should cease the initiative, promising that the mass repatriation of powers from the collapsing EU would include the closing down of Wall Street's tax haven on our soil, with the City of London reconstituted as a London Borough and thus retaining all its pageantry and charity, but with both parliamentary and municipal democracy finally extended to its British inhabitants.

That would give us a Country Party against the Court Party already maintained in two and a bit forms by the City.

Fri, 2011-12-09 10:58 — Livers (not verified)

We need the details - what did he ask for, what did he refuse to give ground on?

I fail to see how we can judge his position until we know that?

I do wonder how much preparation was done before the summit ... we all get hit if the Euro collapses, I do hope he didn't "Just turn up and talk.".

Fri, 2011-12-09 11:09 — jankaas (not verified)

whether Cameron did this as a servant to the City, or whatever, one fact remains; the Euro as we know it is doomed.

it was almost from the beginning. existing fiscal rules have been ignored, broken, disregarded by several nations since its inception. nothing was done about punishing transgressors then, and nothing can ever be done to prevent similar rule breaking by nation states.

evidence? ok, example; the first 2 countries to break the rule that deficits could not go over 3% GDP, were France and Germany!!

so yes Britain is in a terrible spot, outside the room where decisions will be made. but that is nowhere near as bad a spot as being tied to this stinking mess.

Sun, 2011-12-11 06:36 — Mike (not verified)

1% of this country gains from Camerons actions, the other 99% will pay for them.

Fri, 2011-12-09 11:13 — jankaas (not verified)

oops, forgot to say when France and Germany broke that 3% GDP deficit rule; it was back in 2003.

that's how long this current crisis has been waiting to happen.

Fri, 2011-12-09 11:19 — kevin leonard (not verified)

well done now give us our referendum and get us the hell out of this corruption of a union once and for all.

Sat, 2011-12-10 00:22 — matthew fox (not verified)

It means the City of London, will enjoy less regulations, to contend with.

Cameron talks about re-balancing the economy, but will protect the Square Mile.

Sun, 2011-12-11 10:37 — Dan Jones - UK (not verified)

The jury will be out for a while on whether Cameron made the right decision or not. As someone has already said, There is now a law in place requiring any changes to our relationship with the EU to be decided by a referendum, so Cameron had no choice anyway.

I think we should be trying to open up our markets more to the rest of the world rather than try harder to be part of the EU Nightmare... Putting all your eggs in one basket is always a risky move.

IT doesn't matter anyway... we are still having to pay millions of pounds everyday into the EU coffers... I think a multi-option referendum on our relationship with the EU is long overdue. A large part of the UK public want out anyway...

Sun, 2011-12-11 12:24 — JoeDeMocritus

The fundamental Euro problem is still there.

Cameron did the right thing in using the veto.

Fri, 2011-12-09 12:40 — Nephat Chege (not verified)

We should all support Mr Cameron in standing-up to Euro-bureaucrats. We have the whole world to trade with - let's go out and do more business with India, China, Japan and South American countries and we will surely survive without being blackmailed!!

Fri, 2011-12-09 12:55 — An Old Boy

One thing is certain: the proposed new deal between 21/23 countries will not solve the current, immediate problem within the Eurozone.

One thing is not certain: whether this will bring the coalition to an end. If it does, then the Tories will romp home in a general election based on the fact that have stood up for the UK.

Sun, 2011-12-11 14:35 — Jim (not verified)

The reason that Cameron is 'hanging tougth.' He would rather be on the outside of negotiations in Europe, than have to agree to a treaty change that would lead to a referendum. He is far more afraid of a referendum. The UK is becoming a very poor country with the wealthy leaving and being replaced by poor, unemployed third world immigrants. The face of the UK and the welfare of its people is changing. These politicians will have followed Thatcher and Bliar and moved away when the people wake up and revolt. I suspect the Olympics will lead to demonstrations all over the UK and will reveal to the world a police state, poverty, high crime and higher prices.

Sat, 2011-12-10 09:08 — J Unit CYP UK

Good, but not good enough. we need out

Sun, 2011-12-11 17:34 — pobinr (not verified)

Apparently Clegg is concerned that we'll be 'Isolated' !

Isolated as in in... Our schools will no longer be filling up with East European kids if we have the sense to GTF out of the EU. Our local school had 200 pupils 4 years ago. It now has 600, nearly all E.Europeans. With classrooms full of translators at £30 an hour.

They have it planned. They get off the plane then look at where the best schools are. Then register their kids at the best schools in the best areas. Then the council have to provide them with a house in the right catchment area. Namely in the nice area.

All this for people we don't need in our over crowded little Island & who haven't paid a penny in UK national insurance or tax.

Very nice Mr Clegg. If you think we need more of his you are worse than communist.

I prey that one day we will be liberated from this nightmare that robs us of £46m a day for which we get with nothing but red tape, mass immigration & dictats in return.

Perhaps we could then take back control of our country & our borders.

That is something the Swiss had the sense to not lose control of. They had the sense to stay out of the EU.
Lets have more isolation please in terms of EU junk & instead just trade with the world. We don't need that mob of dictatorial parasites in Brussels for anything.

Sat, 2011-12-10 12:06 — matthew fox (not verified)

The political editor of the Economist called it a loss.

Cameron hasn't vetoed because all the structures and legislation will happen.

As to playing a blinder, Cameron has the same shooting boots as Andy Carroll. He is a useless lump as well.

Tue, 2011-12-13 14:03 — paul maleski

The EEC is not to blame--We are!
Yes, I voted NO in the 1975 referendum. The UK used to have close cultural/racial/economic links with myriad nations, on all the continents of the planet. Canada, Australia et al. have descended head first into a multi-racial sewer. The Rhodesia's and South Africa now stare famine in their democratic, degenerate black faces. Cameron spouts too much claptrap with regards to the City, and its parasitic contribution to the UK's GNP. Without a sound manufacturing base, we are doomed to a dismal decline in our living standards. A world in which the young will envy the old. Cameron could gain credibility, if he took back and banked half of our of gold reserves, sold on the cheap by imprudent, treacherous, socialist Gordon Brown. I want to know more about the mysterious donors to Tony Blair and David Cameron. Sadly, Parliament now stinks from top to bottom!

Fri, 2011-12-09 14:39 — Reginald-Fah-fah

Marvellous move by Prime Minister David Cameron.

I agree with Boris, the PM 'played a blinder.'

Fri, 2011-12-09 14:42 — lil lord fauntleroy (not verified)

A few more tory cock ups and it'll be labour who romp home in a few years, short and nostalgic memories willing.

Fri, 2011-12-09 14:45 — Ron (not verified)

Well said Nephat!
If we are going to suffer lets suffer for things we have done and not what has been imposed upon us by others, its a big world, lets get out there and do some business.
We can still put the GREAT back in Britain.

Fri, 2011-12-09 14:47 — Nilsey105

"....Britain(s),....position in the single market will be jeopardised."

Within this lays the double edged sword of irony and unintended consequences of Camerons actions.

All those employed in the Financial services sector in Frankfurt will be jumping for joy.
As much as Cameron says he wants to protect the financial institutions of the City of London, if the UK is not part of the single market, he will be the creator of its demise.
Yes there will be greater regulation in Frankfurt but thats where the single market for financial institutions will be domiciled.

So the sector that generates the largest part of UK GDP, will move to Germany and decline,in the UK as a global player.

Ironic or just an unintended consequence.

Fri, 2011-12-09 14:51 — lil lord fauntleroy (not verified)

still...theres manufacturing..oh no i forgot, they wrecked that under thatcher.

David Gordon FCCA- registered auditor's picture

Fri, 2011-12-09 14:57 — David Gordon FCCA- registered auditor (not verified)

Quite right, but it is only a start. The EU organisation has broken every audit rule in the book. If it was a Ltd company the directors would be banned for life.

Fri, 2011-12-09 15:04 — David Gordon FCCA- registered auditor (not verified)

Oh I forgot- we are all alone- apart from the other 191(?) countries in the UN- inc the couple of dozen Commonwealth countries.Why not freeze our payments to the EU until its auditors sign the accounts.

Fri, 2011-12-09 15:06 — Nilsey105

comma after "decline" should not be there who put it in lolllllll1

Sat, 2011-12-10 15:01 — Reginald-Fah-fah

Prime Minister David Cameron showed Europe who is the greatest statesman in the world!!!! Marvellous!!!!!

Fri, 2011-12-09 15:09 — Nilsey105

David Gordon FCCA- registered auditor

Did you happen to see Storyville, Inside Job. the other night on BBC2 ?

If not try BBCi Player to view.

Sat, 2011-12-10 17:43 — AndyPW

Cameron wasn't standing up for Britain. He was standing up for the City (protecting it from the regulation it so obviously needs), and standing up for keeping himself leader of his selfish party. Britain as a whole will suffer for this, just as our manufacturing suffered when we opted out of regulation for that (and Germany's manufacturing as suffered so much being regulated, hasn't it? - Not)

I don't think we'll need a referendum to leave the EU. Once all the other countries have talked it over, I think they might well eject us first. I think they are probably entitled. Sad day.

Mon, 2011-12-12 01:14 — Mrs.Josephine Hyde-Hartley (not verified)

I don't think there's anything unhealthy or unsafe about being aloof. And in any case surely it's sheets to the wind time - how else can one nation get out of these economic doldrums? Happily, I think we're so far ahead it's beautiful and I'm glad the P.M has tested the veto thing out. At least we know it works.

Mon, 2011-12-12 02:18 — dave fishwick (not verified)

Well folks, I moved to Australia 15 years ago and come back to work on IT contracts every now and then, however I now design Websites for a living, I usualy come over for 3 months maximum. Came back to see London in summer and have to say that it has gone down hill, the VAT, the traffic fines and petrol, how can the amount of duty on fuel be justified. It's about half the price here in Australia and thats considered expensive, the VAT here in Australia, called GST is 10% and also not very popular. Whilst in the City, the number of parking costs, tickets happily handed out by EU imigrants can not be overstated, my brother, 30 with foer kids has never worked a day in his life lives on benifits, drinks and goes fishing all day, and as for banking, somehow became ten pounds overdrawn and ended up with a seven hundred pound in fees overdraft !! My point is being British we are expected to put up with it all and just get on, Britain needs to somehow sort itself out, dont know how but starting with the points I raised here. Imigration, Tax, Punishment Taxes (Fines etc) and unemployment benifit would be a start.

Sat, 2011-12-10 19:12 — matthew fox (not verified)

Cameron was grandstanding and will go to each EU summit, with nothing to bargain with.

The eurozone crisis will keep going on.

Sat, 2011-12-10 19:32 — ragged_soul (not verified)

Cameron's UK, like the USA, is completely a 'bought' government which finds itself unable to do what's right at the expense of those who piad for his election win.