7 Dec 2011

Senior tories warn EU treaty reform will require referendum

Two senior conservatives warn that a redrawn eurozone would make a referendum inevitable, despite the prime minister’s pledge to veto any EU reform plans that fail to protect UK financial interests.

Before travelling to the European Council summit in Brussels to discuss reforms aimed at securing Europe’s single currency, Mr Cameron told MPs at prime minister’s question time that he would be seeking safeguards for Britain, saying “the more the countries of the eurozone ask for, the more we will ask for in return.”

The plan put forward by German Chancellor Angela Merkel and French President Nicolas Sarkozy proposes tougher rules and sanctions within the eurozone, that would, they hope, reassure the markets about the Euro’s stability.

But Mr Cameron said he would only sign the treaty if he could ensure safeguards for the UK, amid fears that the City of London would be hit by a possible transaction tax and protections for the single market.

“What I’m saying is that if – and eurozone countries do need to come together, do need to do more things together – if they choose to use the European Treaty to do that, Britain will be insisting on some safeguards too,” the prime minister said in an article for The Times newspaper.

“As long as we get those, then that treaty can go ahead. If we can’t get those, it won’t.”

Read Economics Editor Faisal Islam on the new “Euro-bazooka 2.0”

Mr Cameron’s attempt to reassure eurosceptic colleagues in parliament that he would was undermined by comments from both his Northern Ireland Secretary Owen Paterson and the London Mayor, Boris Johnson.

In an interview Mr Paterson told the Spectator magazine: “If there was a fundamental change in our relationship, emerging from the creation of a new bloc which would be effectively be a new country from which were were excluded, then I think inevitably there would be huge pressure for a referendum.”

Mayor Johnson told the World at One programme that if there was a new treaty involving all 27 nations of the European Union, a referendum would be necessary: “If there is a new EU treaty that creates a kind of fiscal union within the 27 countries, or within the eurozone, then we’d have absolutely no choice either to veto it or certainly to put it to a referendum.”

Time to focus

In a plea to eurosceptics within the Conservative Party, Justice Secretary Ken Clarke said that David Cameron should be focusing on the “financial stability of the western world”.

In an interview with the Financial Times, he said discussions about Britain’s ties to Europe would be a distraction. “No, we’re not going to renegotiate any transfers of powers, in my opinion,” he said.

Mr Clarke argued that while Britain should be prepared to accept “proper” financial regulation from Brussels, the EU ‘Tobin tax’ was not viable, adding: “It’s the devil’s own job to collect.”