Tensions simmer in Europe over British veto at summit

December 13, 2011

Britain faced pointed criticism from across the English Channel on Tuesday for thwarting a European Union pact aimed at shoring up the foundations of the euro.

European Commission President Jose Manuel Barroso said London’s refusal to compromise left the rest of Europe no choice but to move ahead without it, while another official warned that Britain — which had sought assurances that London’s financial district would not be harmed by future E.U. rules — must still submit to regional regulations, like it or not.

The comments underscored the widespread resentment in Europe over Prime Minister David Cameron’s decision Friday to veto a summit deal for a new treaty among the 27 E.U. members. The deal would have, among other things, outlined strict, enforceable limits on government spending and borrowing throughout the bloc.

Cameron’s opposition left 26 E.U. nations agreeing to form a new treaty without Britain’s participation, and sparked a political firestorm in London.

Cameron’s deputy prime minister said that the move risked making Britain “a pygmy” in the world by isolating it from the rest of Europe. Opinion polls, however, have shown the British public overwhelmingly backing Cameron’s decision.

In unusually blunt comments to the European Parliament in Strasbourg, France, Barroso said that Britain had rejected his attempts to broker a compromise.

“The United Kingdom, in exchange for giving its agreement, asked for a specific protocol on financial services, which, as presented, was a risk to the integrity of the internal market,” Barroso said.

“This made compromise impossible,” he said. “All other heads of government were left with the choice between paying this price or moving ahead without the U.K.’s participation and accepting an internal agreement among them.”

Cameron, a euro-skeptic Conservative who has imposed tough austerity measures at home, did not oppose the deal because it would enshrine strict fiscal governance. Instead, the prime minister, who has bristled along with many Britons at the notion of ceding more authority to E.U. institutions, worried that a new treaty would mean more financial rules that could hinder the global competitiveness of London’s vast financial district.

In fact, the new pact will be aimed at controlling debt and budget deficits, not financial regulations. And regardless of how Britain is positioning itself, as an E.U. member it will remain subject to the union’s financial rules.

“We want a strong and constructive Britain in Europe, and we want Britain to be at the center of Europe and not on the sidelines,” said Olli Rehn, the European commissioner for economic and monetary affairs. “If this move was intended to prevent bankers and financial corporations in [London] from being regulated, that is not going to happen.”

Cameron appeared before the British Parliament on Monday to defend his stance, which the opposition Labor Party is decrying as “bad for Britain.”

Nick Clegg, the deputy prime minister, was notably absent from the proceedings. Clegg, who heads the junior partner in Cameron’s governing coalition, the pro-European Liberal Democrats, has sharply criticized Cameron’s decision to opt out of the pact.

Clegg’s absence illustrated the tensions between his and Cameron’s parties but did not appear to put the coalition in danger of collapse.

In a possible proffer of an olive branch, Cameron appeared to suggest Monday that he would soften Britain’s earlier position that no E.U. institutions should be beefed up as part of the new treaty being written by the other 26 members.

British opposition might prove to be only one minor hurdle for the new treaty. Francois Hollande, the Socialist front-runner in France’s presidential election, has already declared that the accord reached last week is inadequate and vowed to renegotiate it if he wins in the spring.

In addition, the deal might need to be put to a referendum in Ireland, where opposition to it is running high.

Anthony Faiola is The Post's Berlin bureau chief. Faiola joined the Post in 1994, since then reporting for the paper from six continents and serving as bureau chief in Tokyo, Buenos Aires, New York and London.
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