Cameron emerges from first EU summit unscathed
Updated on 17 June 2010
Prime minister David Cameron sets out "red lines" for UK budget sovereignty at his first EU leaders' summit, while Political Editor Gary Gibbon blogs from Brussels.
The heads of the 27 EU countries met in Brussels, where Cameron said Britain would not submit its annual budget for review in Brussels as part of a new economic crackdown.
The prime minister said the summit had delivered a "good outcome" for Britain. He told our Political Editor Gary Gibbon it was always necessary to be "on guard" in the EU against further integrationist efforts, but said expanding the membership had changed the balance in the room.
The prime minister said he was "at one with" his party in thinking the EU "should be about political will not endless institutions".
"It should be about doing this not finding new structures to talk about
things," he told a press conference after today's day-long summit.
The EU today also expressed its
"deepening concerns about Iran's nuclear programme" and recommended going
further than the United Nations in cracking down on the Middle Eastern country.
Fresh sanctions include restrictions on trade, transport, the financial sector and investment and technical assistance with key sectors of the gas and oil industry.
Cameron
will be pleased to escape unscathed
From Channel 4
News's Political Editor Gary Gibbon, in Brussels: I don't
think I've ever heard a Prime Minister rattle through a post-summit statement as
fast as David Cameron did today. Apparently there was a Eurostar he really
didn't want to miss. He said he'd "secured clear agreement" that any extra
powers the European Union considers using to police member states' fiscal policy
would not apply to Britain.
He would "not support the transfer of powers
from Westminster to Brussels" - and that went for any chance of Brussels getting
a look at the UK budget before Parliament too. Very small fish these and his
seasoned team of officials, mostly unchanged from the one that accompanied
Gordon Brown to these occasions, knows that.
I asked him if the lion's
den was quite as bad as Eurosceptics had painted it, the scene of lost British
sovereignty and all that, or as others have said a changed place since the EU
was widened to 27.
His answer was it was kind of both. He said there were
integrationists still around and you had to be "on your guard" but that
broadening the EU had changed the balance in the room.
The Prime
Minister will be pleased that he's got through his first one of these potential
bear-traps unscathed but will know that won't last. How Europe finally chooses
to settle issues of policing fiscal policy in member countries could still throw
up another problem, EU policy on financial institutions is, so to speak, a
"banker" for bad blood.
There's the EU budget, the CAP and any number of
difficulties not yet in view. But underpinning it all now are a euro crisis, the
aftermath of the banking crisis and poor growth. Future EU arguments are bound
to be tougher still when money's tight everywhere.
- Read and
comment on Gary Gibbon's full analysis
from Brussels
The meeting comes amid fresh fears for the euro, after Spain was forced to deny that it was seeking a bailout fund that would eclipse the £90bn rescue plan for Greece.
European officials denied market rumours yesterday that Spain was already in talks with European Commission.
The prime minister resisted plans led by German chancellor Angela Merkel and French president Nicholas Sarkozy to enforce sanctions on states' budget deficits.
In a move to crack down on debt problems in the euro zone, the plan would demand "adoption by all member states of national budgetary rules and medium budgetary frameworks in line".
The proposed reforms were tabled by France and Germany in response to the Greek crisis. While Sarkozy has argued that the restrictions should be limited to euro zone countries only, there have been calls for Britain - indeed all 27 EU members - to agree to the new measures.
The
next Greece? The European economic picture
The EU leaders met
amid concerns of a possible "domino effect" if a larger European country
follows Greece in needing a bailout. Attention recently has focused
on Spain, which has a bulging budget deficit and banks which are struggling
to borrow from international capital markets.
"Spain is a concern in
that its economy needs to be rebalanced," Sarah Boumphrey, head of countries and
consumers research at analysts Euromonitor, told
Channel 4 News. "Spain was responsible for a third of the jobs created in the
eurozone before the crisis hit, largely down to a big construction boom."
Now - unlike the UK - it has an over-supply of housing, leaving the
construction industry less likely to pick up, and unemployment running at around
20 per cent.
View from the UK
Tourism is also an
important part of the Mediterranean economies - and one that Brits have
traditionally been keen to prop up.
"Although a weak euro would usually
be good news for British tourists, sterling is also weak too," said Boumphrey.
"I think the BA strikes and the ash cloud would put people off going abroad -
and since the recession people have got less money in pocket think more
carefully about how to spend."
The challenge for Greece and Spain now is
to attract tourists and investors from emerging economies - particularly those
with currencies pegged to the dollar, which is more buoyant against the euro,
she said.
Although David Cameron has ruled out Britain bailing out a
struggling eurozone country, the movements of the euro are still important to
the UK economy. The euro is our major trading partner - and Britain needs to be
able to export to help grow again after the recession.
"The EU is making
steps in the right direction in the long run, by putting more regulation and
common fiscal policy in the eurozone," said Boumphrey.
Cameron said this morning: "Britain is not a member of the euro zone and will not be, but a strong successful euro zone is vital for the British national interest and it is important that economies get to grips with that," he said.
"We will always defend our national interest, as others do, and our national red lines, but we know how important growth and confidence is in Europe," he added.
Speaking shortly after breakfast with European Commission President Jose Manuel Barroso, Cameron vowed to play a positive role in Europe.
President Barroso said the EU was focusing on "substance" rather than institutions, which Cameron said was "music to my ears".
The prime minister said that "we very much agree on trade" with the EU and will be "a good promoter of free trade...to get the engine of the world economy moving - those things, rather than processes and institutions".
Barroso said that regaining the confidence of investors and consumers was key, adding: "This can only be done if all governments show they are serious about putting order into their public finances by accelerating the pace of budget consolidation and structural reforms. We must avoid a decade of debt and must build a generation of growth."
He also praised the UK's coalition government for "taking exactly the right medicine" for the economic situation.
Gary
Gibbon decodes the small talk as the leaders meet
David Cameron
was ushered in by his ally and political soulmate, the Swedish Prime Minister,
Fredrik Reinfeldt. After a cheerful chat with Prime Minister Zapatero and a
brief hello from the Cypriot Prime Minister, the EU President Herman van Rompuy
pulled him over for a quick photo with the Spanish PM.
There really
can’t be many occasions when, as the most powerful person in your country, you
have to introduce yourself to people saying who you are but that is exactly what
happens in this room. “I am the Prime Minister of Estonia,” says Andrus Ansip
rather modestly to David Cameron. “We met before,” he adds.
Mr Cameron
looked slightly lost only for a moment or two as he looked round trying to get
the measure of the room where his predecessors have sweated before him.
There was a kiss for Baroness Ashton, he told her he got an English
breakfast this morning (presumably at his meeting with President of the EU
Commission, Manuel Barroso), chat with the Polish PM Donald Tusk, before his
foreign affairs aide, Tom Fletcher, who did the same job for Gordon Brown,
showed him round to his seat.
Prime Minister Socrates of Portugal said
they sometimes have foreign ministers in these meetings too. “Better with or
without?” David Cameron asked him. I wonder what William Hague would think of
that.
- Read Gary Gibbon's full blog post from
Brussels
