THE GUARDIAN: David Cameron loses bid to shield City of London from EU regulation and critics warn 'dangerous' move isolates UK
Britain is facing isolation in Europe after David Cameron vetoed a revision of the Lisbon treaty, prompting a majority of EU members to agree to draw up their own deal outside the architecture of the union.
In one of the most significant developments in Britain's 38-year membership of the EU, the British prime minister said early on Friday morning he could not allow a "treaty within a treaty" that would undermine the UK's position in the single market.
The move marked a victory for Nicolas Sarkozy, who had been pressing for an inter-governmental agreement among the 17 members of the eurozone to underpin tough new fiscal rules for the single currency. "We could not accept this," he said of Cameron's demands.
The French president, who has been pressing for the formalisation of a "two-speed Europe", was pleased on Friday when the number of EU member states indicating their support for a separate treaty reached 23. Britain was joined by Sweden, which rejected euro membership in a referendum, the Czech Republic and Hungary.
Angela Merkel, the German chancellor, who had hoped to agree a revision of the Lisbon treaty, said she believed the accord would stabilise the euro. "I have always said, the 17 states of the eurogroup have to regain credibility," she said. "And I believe with today's decisions this can and will be achieved."
Cameron wielded the British veto in the early hours of the morning after France succeeded in blocking a series of safeguards demanded by Britain to protect the City of London. Cameron had demanded that: » | Nicholas Watt, chief political correspondent, in Brussels | Friday, December 09, 2011
