Last Friday marked another turning point in Britain’s relationship with the EU. After hours of marathon talks at the European Council meeting in Brussels, 26 member states agreed on changes to the treaty of Lisbon that would potentially save the eurozone. Members agreed to stricter budget rules and a stronger fiscal union. All member states that is, except for Britain who effectively vetoed the offer on the table.
By vetoing the proposed treaty change, David Cameron has taken a risky gamble. Cameron argues that the amendment was not ‘in Britain’s national interests’ and that he was safeguarding the City of London (the same City that depends on business from EU member states and therefore should expect some input from those member states when it comes to regulation).
Sources claim that Cameron sought a separate legally binding protocol to protect the City of London from further EU financial regulations, protection for US financial institutions based in London that do not trade with the rest of Europe and an agreement that any future changes would require the unanimous backing of every EU member state. It can come as no surprise that the other EU member states found these demands for preferential treatment unreasonable and were unwilling to compromise. Had Cameron negotiated harder, longer and smarter he may well have reached a better deal for the City and a compromise that was acceptable for Britain and other EU member states. After all, isn’t a deal that saves the Euro in Britain’s interests too?
By playing his trump card too early Cameron has used his veto but stopped nothing. The planned treaty amendment will steam ahead. As the Centre for European Reform point out, Britain has never been outvoted on a single piece of EU financial legislation. The EU will continue to move forward and Britain has been left behind. David Cameron can at least take some comfort in the fact that the die-hard Eurosceptic fringes of his party will see his performance at the European Council meeting as victorious. Cameron’s decision is bitterly disappointing. For forty or so years, Britain has operated a successful foreign policy that has allowed it to build good relationships with its European neighbours. A critical element of that foreign policy was that Britain was there, sat at the table when EU bodies made decisions. Now Britain’s position has been weakened with less influence amongst those neighbours and it is viewed as an outsider, a difficult and reluctant partner.
Britain has not left the EU and nor is it likely to do so. It remains part of the single market, albeit from a marginalised and isolated position. Less than two months have passed since MPs voted overwhelmingly not to hold a referendum on EU membership but the future of UK-EU relations looks grim, particularly while David Cameron is Prime Minister.