Cameron threatens to veto EU treaty over financial tax


BRITISH PRIME minister David Cameron has raised the stakes over Friday’s crucial meeting of European Union leaders, warning that he will veto a new EU treaty unless it guarantees protections for London’s multibillion financial services industry.

The French and the Germans, and some other EU states  want a tax on all financial transactions, but the British argue that that would excessively penalise London – Europe’s dominant financial centre, and has consistently ruled it out.

Meanwhile, the government is faced with competing desires: it wants to see greater unity among euro zone states, but fears this could see London gradually sidelined as a financial centre to the benefit of Frankfurt.

Last night, Mr Cameron said: “When I go to Brussels I will be there to defend and promote British interests, and the most important British interest right now is to sort out the problem in the euro zone that is having the chilling effect on our economy that I have spoken about.

“That obviously means euro zone countries doing more together, and if they choose to use the European treaty to do that, than obviously there will be British safeguards and British interests and I will be there to protect that.

“I will not sign a treaty that does not have those safeguards in it, around things like the importance of the single market and financial services. If they choose to go ahead with a separate treaty, then clearly that’s not a treaty Britain would be signing or amending, but if they want to use the European institutions, then Britain will be insisting on the safeguards and the protections that Britain needs,” he said.

“Britain is a full member of the European Union, key to that is the single market, we want the single currency crisis solved, but we want to protect and defend British interests at the same time.”

Mr Cameron, who met French president Nicholas Sarkozy on Monday, was asked directly: “Are you saying you are ready to veto a treaty designed to save the single currency, and in what circumstances would you veto it?”

“Well of course to save the single currency you need more than simply a treaty, you need to address the competitiveness problem, you need to address the deficit problem, you need to fake action to convince the markets that you’re serious, you need the institutions like the ECB to get behind the single currency, but what I’m saying is that if, and euro zone countries do need to come together, if they choose to use the European treaty to do that then Britain will be insisting on some safeguards too and as long as we get those then that treaty can go ahead, if we can’t get those, then it won’t.”

On Monday Mr Cameron made it clear that he would not agree to the holding of an EU referendum in the UK, which is being increasingly demanded by his more Eurosceptic colleagues. He said “it would tear the coalition apart”, according to Whitehall sources last night.

One of his most vocally anti-EU MPs, former cabinet minister John Redwood said he did not believe that Friday’s summit would not solve the euro zone crisis.

“The only thing that could buy them a year or so is print a lot of money, which Germany doesn’t want to do for perfectly good reasons. And Germany wants massive control over the budgets.

“A break-up of the euro zone will be the best outcome.

“Eighty-seven countries to my knowledge have left currency zones since 1945, many of them with great success following their departure, so don’t over stress the Armageddon,” said the Conservative MP.