Prime minister David Cameron has vowed to protect the financial services industry from more EU regulation in the House of Commons today.
Cameron was speaking after returning from a two day EU leaders summit in Brussels this week to discuss the creation of a banking union to shore up the banks of eurozone nations.
MEPs have already expressed concern that a banking union could split the EU and threaten the integrity of the single market, as those EU countries not in the eurozone would not be involved in the union. Britain has no plans to join the banking union.
Speaking in the Commons this afternoon, Cameron said his priority is to make sure UK financial services firms could still access the valuable European single market.
He said: “The absolutely key thing is to safeguard the single market. I am very conscious of that fact, sitting round that table, that I am responsible for 40 per cent of the EU financial services industry. That must be our focus during negotiations”
The creation of a banking union requires approval from all EU states, even those who are not in the union. Cameron says the banking union is vital to the eurozone sorting out its problems and backs its creation.
He said: “The proposals for a banking union have to be agreed with unanimity which is an important safeguard for Britain. But I do not think it would be in our interests to stop the eurozone putting in place something that the single currency needs in order to function.”
Cameron said high sovereign bond yields for EU countries are hurting the UK and a banking union would help bring them down.
However, the prime minister reserved the right to block a banking union if it meant new EU financial regulations, such as a financial transaction tax, could be imposed on the UK by other member states.
Under current proposals, those in the eurzone banking union could outvote the UK as a block to force through new EU-wide financial rules. Cameron told MPs he has won concessions to stop this happening by creating “acceptable and fair” voting.
He said: “I do not want to veto a banking union but unless this problem is sorted, and Britain has a totally legitimate argument, we cannot allow it to go ahead.”