David Cameron vows to reclaim EU powers amid looming Tory rebellion
Britain will seek to claw back powers from Brussels during negotiations for a new rescue deal for the euro, David Cameron said as he attempted to undermine a Conservative rebellion over calls for an EU referendum.
European leaders are negotiating a multifaceted deal which is expected to see Greece go bankrupt and write off more than half its debts. Banks across the continent will also be lent about €100 billion (£87 billion) to boost their balance sheets, so that the impact of the Greek meltdown will not lead to another banking crisis.
Other European countries are also expected to be allowed to borrow money from a central European facility at rates cheaper than they receive on the financial markets. These loans will effectively be underwritten by wealthier EU countries, primarily Germany.
In return for the large rescue package, the German government is likely to insist on new legally-binding rules that would stop euro countries from borrowing beyond their means in future. Creating these rules would require a rewriting of EU treaties that would need to be endorsed by all countries.
The relationship between members of the single currency and those, such as Britain, outside the arrangement was the subject of heated discussion at the weekend. Nicolas Sarkozy, the French President, pushed for greater euro-area integration but Mr Cameron is wary about decisions affecting Britain being taken without this country’s approval.
Angela Merkel, the German Chancellor, said that it was “quite a discussion” which unexpectedly led to the prospect of a rewritten EU treaty being proposed.
Guido Westerwelle, the German foreign minister, said: “We urgently need changes to the treaty so we can have a real stability union.”
Herman Van Rompuy, the EU president, said: “We decided to explore the possibility of limited treaty change. The aim is deepening our economic convergence and strengthening economic discipline.”
Mr Cameron has previously warned that the eurozone needs a “big bazooka” to tackle the crisis, which has threatened to push the global economy back into recession.
Last night, the Prime Minister said: “I’ve argued that this crisis means that greater fiscal and economic integration of the eurozone is inevitable. But this must not be at the expense of Britain’s national interest.
“I think we are beginning to see the elements of a strong package coming together. What is needed to help deal with the current uncertainty is a clear recapitalisation of Europe’s banks, and a good agreement was reached last night, we need to make sure we increase the scale of the European financial stability facility, and conversations are ongoing about that, and we need to make sure we deal decisively with the Greek situation.”
Wednesday’s summit is increasingly being seen as a “make or break” moment for the single currency and the global economy. Alistair Darling, the former chancellor, said: “They better come up with a definitive answer on Wednesday, or we will be in real, real problems.”
Mr Cameron warned that renegotiating the EU treaty may take many months or years. This means that Britain’s relationship with Europe may dominate political debate as MPs lobby for the return of powers to Westminster.
Britain will seek to claw back powers from Brussels during negotiations for a new rescue deal for the euro, David Cameron said as he attempted to undermine a Conservative rebellion over calls for an EU referendum.
European leaders are negotiating a multifaceted deal which is expected to see Greece go bankrupt and write off more than half its debts. Banks across the continent will also be lent about €100 billion (£87 billion) to boost their balance sheets, so that the impact of the Greek meltdown will not lead to another banking crisis.
Other European countries are also expected to be allowed to borrow money from a central European facility at rates cheaper than they receive on the financial markets. These loans will effectively be underwritten by wealthier EU countries, primarily Germany.
In return for the large rescue package, the German government is likely to insist on new legally-binding rules that would stop euro countries from borrowing beyond their means in future. Creating these rules would require a rewriting of EU treaties that would need to be endorsed by all countries.
The relationship between members of the single currency and those, such as Britain, outside the arrangement was the subject of heated discussion at the weekend. Nicolas Sarkozy, the French President, pushed for greater euro-area integration but Mr Cameron is wary about decisions affecting Britain being taken without this country’s approval.
Angela Merkel, the German Chancellor, said that it was “quite a discussion” which unexpectedly led to the prospect of a rewritten EU treaty being proposed.
Guido Westerwelle, the German foreign minister, said: “We urgently need changes to the treaty so we can have a real stability union.”
Herman Van Rompuy, the EU president, said: “We decided to explore the possibility of limited treaty change. The aim is deepening our economic convergence and strengthening economic discipline.”
Mr Cameron has previously warned that the eurozone needs a “big bazooka” to tackle the crisis, which has threatened to push the global economy back into recession.
Last night, the Prime Minister said: “I’ve argued that this crisis means that greater fiscal and economic integration of the eurozone is inevitable. But this must not be at the expense of Britain’s national interest.
“I think we are beginning to see the elements of a strong package coming together. What is needed to help deal with the current uncertainty is a clear recapitalisation of Europe’s banks, and a good agreement was reached last night, we need to make sure we increase the scale of the European financial stability facility, and conversations are ongoing about that, and we need to make sure we deal decisively with the Greek situation.”
Wednesday’s summit is increasingly being seen as a “make or break” moment for the single currency and the global economy. Alistair Darling, the former chancellor, said: “They better come up with a definitive answer on Wednesday, or we will be in real, real problems.”
Mr Cameron warned that renegotiating the EU treaty may take many months or years. This means that Britain’s relationship with Europe may dominate political debate as MPs lobby for the return of powers to Westminster.