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Britain rejects EU treaty -

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Britain rejects EU treaty

Emma Alberici reported this story on Saturday, December 10, 2011 08:00:00

ELIZABETH JACKSON: The European Union has been seriously fractured after Britain opted out of a
critical treaty that will change the way the single market is regulated.

The UK prime minister, David Cameron, told reporters that he went to the European summit looking
for safeguards for companies in Britain but didn't get them. It was therefore not in Britain's
interests, he said, to sign the new treaty.

But France and Germany are adamant that the other 26 member countries of the EU will push ahead
with an agreement which now threatens to isolate Britain.

Here's our Europe correspondent Emma Alberici.

EMMA ALBERICI: The president of the European Council told a press conference that the changes to
the EU will take place in two steps; first there would be rapid confirmation from participating
states as to their commitment to the so-called fiscal compact treaty. Then following further
negotiations the treaty will be signed in early March.

According to the council the fiscal compact is about more fiscal discipline, more automatic
sanctions for those who misbehave and stricter surveillance of member states. Twenty six of the 27
EU countries have agreed to sign the new deal. Britain is the odd one out.

Prime Minister David Cameron wanted special safeguards built into the treaty for financial firms in
the city of London. His demands were rejected.

DAVID CAMERON: I think I did the right thing for Britain. We were offered a treaty that didn't have
proper safeguards for Britain and I decided it was not right to sign that treaty; that was the
decision I took.

You're obviously in a room with 26 other people who are saying, put aside your national interest,
go along with the crowd, do what will make life easy and comfortable for you there in that room but
you say no, it's important that we get the things that Britain needs and so I decided not to sign
that treaty. It's what I said I'd do and it's what I did.

EMMA ALBERICI: In a direct swipe at the British leader, German chancellor, Angela Merkel, said what
Europe needed was tough regulations not, in her words, dodgy compromises.

ANGELA MERKEL (translated): What we have created here is and constitutes a tremendous step towards
a stable Europe it is a political signal you can say that it is the breakthrough towards a
stability union.

The stability union, the fiscal union will be implemented step by step over the next few years but
the breakthrough towards this union has been created now.

EMMA ALBERICI: Angela Merkel and the French president, Nicolas Sarkozy, did not disguise their
frustration with their British counterpart.

NICOLAS SARKOZY (translated): David Cameron asked for something we all thought was unacceptable;
namely a protocol which would have exempted Britain from certain financial regulations. We simply
couldn't accept this, because at the end of the day, we all consider that deregulation in the
financial markets is precisely what's got us into this trouble in the first place.

EMMA ALBERICI: There was as much domestic politics at play in Britain's decision to veto the treaty
as anything else. The people of Britain are largely opposed to policies that bring the country
closer to Europe. In fact even some of David Cameron's own MPs have been agitating for the
government to claw back some of the EU's powers.

Lord Kerr is Britain's former ambassador to the European Union under Margaret Thatcher and then
John Major. He said it was conceivable that the management of the conservative party was a factor
in David Cameron's thinking.

LORD KERR: I am very puzzled that we chose to pick up the ball and leave the pitch before the game
started. I'm very uneasy because I'm very worried about the empty chair. I worked for Mrs Thatcher
who was very strongly of the view that we must always be there, must always be in the room.
Sometimes she said go and find out what they're doing and tell them to stop it but she certainly
felt we should be there.

EMMA ALBERICI: Across Italy the headlines talked about a two-speed Europe. 'Britain divides Europe'
they screamed out. The Economist magazine says the European Union is now split in a fundamental
way. But the Lithuanian president, Dalia Grybauskaitë, says the 26 countries together are united
and that the UK will now struggle to find a voice in Europe.

DALIA GRYBAUSKAITË: Not Europe. Brits divided and they are outside of decision making. Europe is

EMMA ALBERICI: Mr Cameron said the UK only ever signed up to the EU for the benefits of trade and
investment, nothing more.

Croatians on the other hand can't get enough of Europe and overnight they realised a 20-year dream
when their government signed an accession treaty to join the EU. A closer tie with Brussels has
been an ambition since Croatia gained independence from the former Yugoslavia in 1991.

This is Emma Alberici in London for Saturday AM.