PM told to stand up to Nick Clegg and block eurozone members from using EU institutions to police their new fiscal compact
From guardian.co.uk, by Nicholas Watt, chief political correspondent, Monday 12 December 2011 15.44 EST – Eurosceptic ministers are to tell David Cameron to stand up to Nick Clegg and block the 17 members of the eurozone from using the institutions of the EU to police their new fiscal compact.
In a sign of the determination of the Eurosceptics to maintain pressure on Downing Street, it is understood that Iain Duncan Smith and Owen Paterson have agreed that the prime minister must adopt a tough stance.
The prime minister delighted Eurosceptic ministers when he indicated in Brussels in the early hours of Friday morning that he was prepared to prevent eurozone members from using the European commission and the European court of justice to enforce their “fiscal compact”.
Cameron said: “We will insist that the EU institutions – the court, the commission – that they work for all 27 nations of the EU. Indeed those institutions are established by the treaty and that treaty is still protected.”
Clegg rejected this approach when he tore into the prime minister’s decision to wield the British veto and block a revision of the Lisbon treaty to place the “fiscal compact” on an EU legally binding basis. The deputy prime minister told The Andrew Marr Show on BBC1 on Sunday: “It clearly would be ludicrous for the 26, which is pretty well the whole of the European Union with the exception of only one member state, to completely reinvent or recreate a whole panoply of new institutions.”
The Liberal Democrats persuaded Cameron to adopt a more flexible approach on the use of the institutions in his statement to MPs on Monday. In language agreed with Clegg, the prime minister told MPs: “In the months to come, we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, and in particular for Britain. The UK is very supportive of the role the institutions – and the commission in particular – play in safeguarding the single market. So we will look constructively at any proposals with an open mind.”
One Lib Dem source said: “We made progress today. The prime minister’s language was encouraging. We are not making demands of the prime minister. At the end of the day we want to help save the euro because that is in our interests. It is about looking constructively at the requests for the use of the EU institutions.”
But Eurosceptic Tories were encouraged shortly afterwards when Cameron adopted a tougher stance after an intervention by Conor Burns, the parliamentary private secretary to Owen Paterson. In a carefully crafted question, Burns asked: “Can he confirm, as the foreign secretary said yesterday, that the existing treaties of the European Union belong to all 27 member states and that there can be no question of the eurozone countries having recourse to the institutions, mechanisms and procedures of those treaties?”
The prime minister replied: “The treaties do belong, equally, to those who are in the euro and those who are out of the euro. The key thing about this is that if there are going to be further changes to those treaties, if you are going to allow the eurozone members to do something within the architecture of the European Union, it is important to get safeguards for those countries that are not in the euro, not going to join the euro, want to safeguard the single market, [and] recognise there’s a potential threat to financial services. That is what we were about in Brussels and that is what matters.”
One Eurosceptic Tory said: “We were encouraged by the prime minister’s response. It showed that Downing Street is serious about using the debate on the role of the institutions to secure the safeguards that were rejected by [Nicolas] Sarkozy and [Angela] Merkel.”
France, Germany and the European commission are planning to adopt a hardline approach in their negotiations with Britain over the use of the EU institutions. France and Germany decided to agree a new treaty among the 17 members of the eurozone – plus other member states who want to sign up – outside the formal framework of the EU after Cameron vetoed a revision of the Lisbon treaty.
The commission will argue that it is right to use the institutions of the EU to enforce the rules of the new treaty because around three-quarters of the “fiscal compact” is already established in EU law. Commission sources also say that any member state can take another member state to the European court of justice (ECJ) under article 273 of the Lisbon treaty.
Downing Street dismisses this argument because it says that the ECJ can only enforce matters referred to in EU treaties. The final parts of the “fiscal compact” will be established outside EU treaties.
Foreign Office sources, who are irritated with the way in which Downing Street cut its officials out of the negotiations, believe that Britain should allow the EU institutions to be involved. One source said: “The next stage of this is the blame game. We all want to avoid being blamed when everyone wakes up and realises that the agreement in Brussels simply will not do the job of stabilising the euro. We still don’t know what the new treaty will say. We only know that one will be produced between now and March. So if it all goes pear-shaped we have to make sure Britain cannot be blamed.”
There is particular irritation with Jon Cunliffe, the former Treasury official who is Cameron’s senior adviser on Europe. He is being blamed for cutting out the Foreign Office from the negotiations in advance of the summit, and for failing to give the French and Germans enough time to digest Britain’s demands on financial services.
“We all know what happens when Treasury officials get involved in foreign affairs,” one source said. “Just look at Sir Horace Wilson who advised Neville Chamberlain and travelled with him to Munich in 1938.”