Deputy Prime Minister Nick Clegg says David Cameron’s decision to veto a new EU treaty will leave the UK “isolated and marginalised”.
On Friday, the Prime Minister vetoed a new European treaty aimed at achieving greater fiscal unity for the 27 EU member states as he was unable to secure concessions for the UK’s financial services industry.
Instead a new intergovernmental treaty will hold members to strict new budgetary rules, including a cap of 0.5 per cent of GDP on members’ annual structural deficits, a requirement for members to keep public deficits under 3 per cent of GDP and a requirement for members to submit their budgets to the European Commission.
Speaking on BBC1’s Andrew Marr show, Clegg said: “I am bitterly disappointed by the outcome of last week’s summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union.
“I do not think that’s good for jobs, in the City or elsewhere, I do not think it is good for growth or for families up and down the country.”
Cameron was pushing for a number of concessions for the UK financial services industry, although this did not include a general shielding of the industry from any new rules. One concession asked for by the UK was to be able to apply tougher capital rules on banks than the European Commission is proposing, in line with the Vickers’ report.
The Prime Minister also fought a proposed financial transaction tax but, according to a report in the Financial Times, there are fears a eurozone-only tax could be applied in a way that would encompass transactions taking place in London.
Meanwhile, the office of Business Secretary Vince Cable has denied he is planning to quit over the veto, according to reports. Speaking to the Telegraph, he said: “I am not criticising the Prime Minister personally. Our policy was a collective decision by the coalition. We finished in a bad place.”