Euro zone governments baulk at draft plan for UK

Objection to UK being able to set own regulatory standards for financial institutions

Euro group president Jeroen Dijsselbloem rings a bell prior to Thursday’s Brussels meeting. Photograph: Thierry Monasse/AFP/Getty Images

Euro group president Jeroen Dijsselbloem rings a bell prior to Thursday’s Brussels meeting. Photograph: Thierry Monasse/AFP/Getty Images

 

Representatives from euro zone governments on Thursday baulked at a draft European Union proposal granting safeguards to Britain’s financial industry, forcing further negotiations on an accord seeking to keep the UK in the 28- nation union.

France led several euro zone nations in objecting to pledges in the EU plan that would give the UK and other countries outside the single-currency bloc freedom to set their own regulatory standards for financial institutions, according to sources in Brussels.

Discontent from eastern European countries over proposed limits on welfare payments to foreign workers in the UK will be another hurdle for leaders to overcome when they meet on February 18th.

British prime minister David Cameron needs approval from every other nation in the EU for a deal at the two-day summit in Brussels. That would pave the way for him to hold a referendum on staying in the union as early as June 23rd and campaign against a Brexit.

As if to underscore the delicate nature of the negotiations, European Council president Donald Tusk, in charge of persuading leaders to back the deal, will spend Monday and Tuesday shuttling between Paris, Berlin, Bucharest, Athens and Prague.

On Tuesday, Mr Cameron will address the European Parliament’s political group leaders, on whose support he depends to pass some of the legislation changing the UK’s EU membership terms.

While diplomats made progress on technical and legal clarifications of the text published earlier this month, the main political items are still not settled, a separate EU official said on the condition of anonymity.

Clarification

While a deal is not out of reach, there is still much to be done for the summit, they said. If agreed when leaders meet next week, the settlement would restrict welfare benefits to non-British EU nationals in the UK, shield Britain’s financial industry and grant more powers to national parliaments across the union.

– (Bloomberg)