BLBG:Cameron Wishes Euro Nations Well as U.K. Negotiates Isolation
Prime Minister David Cameron said Britain refused to sacrifice sovereignty to save the euro, remaining outside an agreement by European nations to tighten budget rules.
Cameron broke ranks with French President Nicolas Sarkozy and German Chancellor Angela Merkel after he failed to secure safeguards that would have stopped European Union plans to police financial services in London, Europe’s trading hub. The U.K and possibly Hungary, Sweden and the Czech Republic will remain outside the new rules.
“We wish them well,” Cameron told reporters after all- night talks with his European counterparts in Brussels. “My judgment was that what was on offer just wasn’t good enough for Britain. It’s better to allow those countries to do their own thing on their own.”
What Cameron will present as a victory to euro-skeptic lawmakers in the Conservative Party at home leaves the U.K. increasingly isolated in Brussels. Cameron failed to win assurances that the institutions representing all 27 nations will work in their interest, not just those using the euro.
Cameron is battling opposition from members of his own party who want Britain to hold a referendum, potentially to decide whether it should remain part of the EU. The negotiations today amounted to lost “sovereignty” for those who signed up to the plan, he said.
European leaders added 200 billion euros ($267 billion) to their crisis-fighting warchest and tightened anti-deficit rules, seeking to lure the European Central Bank into stepping up its rescue operations.
‘Fiscal Compact’
In an accord hailed by ECB President Mario Draghi, the leaders outlined a “fiscal compact” to prevent future debt runups, accelerated the start of a planned 500 billion-euro rescue fund and dropped bondholder loss-sharing provisions.
Sarkozy criticized Cameron’s “unacceptable demands” for “opt-outs” on financial regulation and accused Britain of creating a two-speed Europe.
“It’s the British opt-out of the euro that creates a two- speed Europe,” Sarkozy said. “You can’t choose to stay out of the euro, and then complain you are being kept out.”
Cameron is facing growing pressure to recover powers ceded to the EU after more than a quarter of his Conservative Party lawmakers voted in favor of a referendum on British membership of the bloc in October. In an interview with the Spectator magazine, Northern Ireland Secretary Owen Paterson said a U.K. referendum is “inevitable” if members of the single currency draw closer together to end the sovereign-debt crisis.
Cameron has warned that if the euro region goes into recession the U.K. may follow and today he said the key aim of the summit of European leaders this week is to resolve the crisis that is “freezing” the British economy.
To contact the reporter on this story: Gonzalo Vina in Brussels at gvina@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
