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Britain Splits With EU In Vetoing Plan for Financial Rules for All 27 Member States (12/9)     Print Email
By European Affairs

The most significant result so far in the crucial euro summit has been British Prime Minister David Cameron’s decision to opt out of a proposed agreement on national budgets that would have involved some forfeit of national sovereignty. The plan is aimed at restoring future credibility to the euro and, although Britain never adopted the euro and is therefore not in the eurozone, the proposal was desigend to cover all EU member states.

 

Vetoed by Britain, the plan will now proceed on an “op-in” basis, and most other EU countries are expected to join it, leaving London isolated on this issue. So two decades to the day after the Maastricht Treaty was concluded, launching the process towards the single European currency, the EU's tectonic plates have slipped momentously along the same fault line that has always divided it -- the English Channel.

The upshot is that France, Germany and 21 other countries have decided to draft their own treaty to impose more central control over national budgets. Three more EU member states -- Sweden, the Czech Republic and Hungary -- may join, too, after they have had time to consult their parliaments and political parties about this new “union within-the-union.”

The Economist, a leading British publication, describes this development as “Europe’s Great Divorce” and writes that it is “a famous political victory, especially for France, on the brink of losing its AAA credit rating and now the junior partner to Germany.

President Nicolas Sarkozy had long favoured the creation of a smaller, "core" euro zone, without the awkward British, Scandinavians and eastern Europeans that generally pursue more liberal, market-oriented policies. And he has wanted the core run on an inter-governmental basis, i.e. by leaders rather than by supranational European institutions. This would allow France, and Mr. Sarkozy in particular, to maximise its impact.”

-- European Affairs