View more on these topics

Coalition split over European treaty veto

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.”


News and expert analysis straight to your inbox

Sign up


There are 7 comments at the moment, we would love to hear your opinion too.

  1. At least 500,000 jobs and families in the London and the South East rely, rightly or wrongly, on the health and profits of the Financial Services industry.

    Flip flop Clegg would have been happy to sell all these families down the river for EURO idealism.

    Cameron put these families first.

  2. Given the intractable mess in which the EU presently finds itself, I think we’re better off out of it, as indeed is Switzerland. Are there really any compelling reasons why the UK should submit to yet more interference from Brussels? I think we’re better off running our own economy and leaving the rest of Europe to do its own devices.

  3. European Scrutiny Committee discussing the minimum tax rates of proposed transaction tax:

    “4.11 The Minister next discusses the Commission’s impact assessment accompanying the proposal, saying that: taking these figures in turn and before taking into account relocation effects, in real economic impacts it can be estimated that a reduction of 1.76% of EU GDP equates to a fall in economic output of €216 (£186) billion, a fall in employment of 0.2% equates to a loss of 478,000 jobs, a 3.43 % fall in EU GDP equates to a fall in economic output worth €421 (£362) billion and a 0.34% fall in employment equates to a loss of 812,000 jobs.”

    Most of that loss will be from the UK.

  4. Sometimes isolation from a disease is the only way you can protect yourself.

  5. I think that Mr, Cameron was right to do what he did, how can Mr, Clegg say we will be losing British jobs, when we have already lost big contracts to Germany, China, Pakistan ect,
    I didn`t see him doing much to protect the Derby workers or doing much shouting about London buses being built in China. We really need to be uncoupled from the restraints of the EU.

  6. Cameron went to Brussels on the clear and pre-announced basis that he would sign the treaty but not in return for nothing. He made his requirements plain and they were rejected, so he didn’t sign.

    Ed Balls was asked today whether or not, had he been in the PM’s shoes in Brussels, he would have signed the Treaty without any concessions having been granted. He refused to answer yes or no.

    I don’t know whether or not the same question has been put to Nick Clegg, though my guess is that if it were, his response would be equally equivocal. Notably, what neither Balls or Clegg have said is that the PM should have signed the Treaty, irrespective of whether or not he was able to secure any concessions protecting British interests. Therefore, their criticisms lack any vestige of credibility. Balls, of course, is merely seeking to score political points ~ whatever Cameron did would, in his book, have been wrong.

  7. Quite funny all these Eurosceptics. Apparently other countries will be falling over themselves if we leave Europe. I don’t think so.

    Yes my views are in the minority but sadly we are all going to have to live with the consequences. Just what exactly did Mr Cameron achieve. Isolation, that’s all. He certainly hasn’t secured any protection for the City of london as he has claimed.

    Makes a good story but the usual old bull from the Eurosceptics.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm