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Breaking News:

EU tensions between UK and France rise as Cameron agitates treaty deal

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EU tensions between UK and France rise as Cameron agitates treaty deal

Posted on 02 August 2012 by "the witness"

Nicholas Watt and Ian Traynor

Wednesday 14 December 2011 21.32 GMT

Nicolas Sarkozy and David Cameron

EU treaty reform has seen French president Nicolas Sarkozy and David Cameron come to blows. Photograph: Kevin Lamarque/Reuters

Nicolas Sarkozy reportedly calls British prime minister 'an obstinate kid' over EU summit veto

Tensions between Britain and France over the future of the EU intensified after French satirical magazine Le Canard Enchainé reported that Nicolas Sarkozy apparently accused David Cameron of behaving like "an obstinate kid" when he wielded the British veto at the European summit last week.

As Angela Merkel held out an olive branch to Cameron by describing Britain as an important partner, the prime minister started agitating against the Franco-German push for a new treaty.

In a series of moves likely to infuriate the Liberal Democrats, who were angered by Cameron's decision to wield the veto at last week's summit, the prime minister:

• embarked on discussions with EU member states said to have deep concerns about the treaty proposed by France and Germany after Cameron vetoed a revision of the Lisbon treaty. The new treaty is designed to place the "fiscal compact" for the eurozone on a legally binding basis.

• dismissed calls by the IMF that Britain should be prepared to provide greater resources to a euro bailout fund. The prime minister's spokesman said the call by the IMF, run by the former French finance minister Christine Lagarde, was a "cut and paste" job from the eurozone statement last week.

The prime minister made clear he was prepared to foment opposition to the intergovernmental treaty, proposed by Sarkozy and Merkel at last week's EU summit, when he told Conservative MPs at a meeting of the 1922 committee about conversations with Fredrik Reinfeldt, Enda Kenny and Petr Necas, his Swedish, Irish and Czech counterparts. They all indicated deep unease about the proposed Franco-German treaty.

Cameron spoke to Reinfeldt and Necas, whose countries are outside the euro. On Tuesday the prime minister spoke to Kenny, whose country is a euro member and who has warned that a referendum may need to be held on the treaty.

The French satirical newspaper Le Canard enchaîné quoted Sarkozy as saying: "The whole world recognised that my proposal was the only possible course. The accord will perhaps not put an end to the crisis, but it is a tool for facing up to it. The dynamism of the Franco-German axis enabled us to rally 26 countries."

Reinfeldt and Kenny both indicated deep unease about the proposed Franco-German treaty proposed at last week's EU summit.

One senior Tory said: "The prime minister said [to colleagues at the 1922] there is no question of this being 26 [EU member states] versus one [Britain]. There are a number of countries that are not all sure what they are being asked to sign up to."

Downing Street, which moved to appease the deputy prime minister, Nick Clegg, earlier this week by indicating that it wanted to mend fences with France and Germany, set Britain further apart from its EU partners when it said it was not yet prepared to provide more resources to the IMF to help fund a euro bailout fund.

The prime minister's spokesman said the agreement in Brussels did not meet the prime minister's demand, after the G20 summit in Cannes, for the eurozone countries to take "more concrete action to make their firewall credible".

Asked whether the EU summit had met the prime minister's demand for "concrete action", the spokesman said: "There has to be a decision taken to increase IMF resources. We have not taken that decision." When asked about the IMF's call for more resources for the eurozone, the spokesman said: "I have seen the information on their website. It seems to be a sort of cut and paste from the eurozone statement at the end of last week. But there hasn't been a discussion. There would have to be a process by which any increase in IMF resources was agreed."

Jens Weidmann, Germany's central bank chief, threatened to boycott the moves to boost the IMF through €200bn in bilateral loans from EU central banks unless non-eurozone IMF contributors, such as the US and the Britain, also provided additional loans.

In a letter to the German finance minister, he has also insisted that the German contribution of €43bn has to be endorsed by the German parliament.

The row over the IMF came as Merkel attempted to reach out to Britain. Reporting to the German parliament in Berlin on the EU summit, she said she very much regretted the UK position at the summit and the Cameron veto, but emphasised the merits of not isolating Britain.

"As much as I regret that Great Britain is not on board, for me there is no doubt that Great Britain will be an important partner in the future," said Merkel. Britain was a reliable ally on foreign and security policy, climate change, competitiveness, trade and the single market, she said.

At a meeting last Thursday night in Brussels before the summit opened, Merkel and Sarkozy robustly rejected British demands for protection from EU regulation of the UK financial services sector, viewing the British gambit as a naked attempt to reverse EU integration.

Merkel told Cameron he could not expect special treatment for a sector that caused the financial crisis in the first place, while Sarkozy told Cameron the EU would not pay Britain in order to save the euro. It is understood that this encounter hardened Cameron in his resolve to use his veto.

But regardless of the British standoff, the summit's decision to push ahead with new punitive rules for the euro by March have already been set back. The summit said it would reassess the firepower of the bailout fund in the spring, in the hope of enlarging the war chest.

A Downing Street spokesman said: "The prime minister spoke to Taoiseach Kenny yesterday and prime minister Necas and prime minister Reinfeldt today, to agree the priorities for action to follow up the European Council.

"To each the prime minister reiterated the UK's position that he had been ready to agree treaty change for the EU provided the UK secured some modest and practical safeguards to protect the single market. Without safeguards it was best that the eurozone proceeded outside the EU Treaty, but Britain wanted this new arrangement to succeed, and wanted to find the right way forward that preserved the proper role of the EU and its institutions as the guardian of the Treaties and the single market. In each call the leaders agreed to build on their close cooperation on EU issues, especially promoting jobs and growth through the single market. They agreed that the priority for the European economy remained comprehensive and decisive action to deal with debt and increase competitiveness."

• This article was amended on 16 December 2011 to clarify the source of the reported Sarkozy quote.


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