Belfast Telegraph

Tuesday 16 September 2014

Cameron in eurozone summit battle

Nicolas Sarkozy and Angela Merkel are calling for a raft of new financial measures to help stabilise the euro
Prime Minister David Cameron has refused to back an EU-wide tax on financial transactions

David Cameron faces a Franco-German steamroller, determined to push through sweeping financial changes in Europe and restore the stability of the single currency.

Paris and Berlin will call for a raft of new financial measures applying to the 17 eurozone countries, at an EU summit in Brussels.

Prime Minister Mr Cameron and the other non-eurozone leaders in Europe will be told that, with or without their blessing, the eurozone group intends to press ahead with the necessary treaty change within months.

Proposals from German chancellor Angela Merkel and French president Nicolas Sarkozy were set out on Wednesday night in a letter to summit chairman Herman Van Rompuy.

As well as tough new controls on eurozone economies, including automatically-triggered sanctions if eurozone states breach debt and deficit criteria, the pair are calling for a tax on financial transactions within the zone, common corporate tax rates and harmonised employment rules.

None of it would apply to the UK, but Ireland is bound to defend its cherished low corporate tax rate against a higher single rate for the eurozone.

Mr Cameron is believed to be relaxed about the 17 eurozone members pressing ahead with a financial transactions tax, on the grounds that it would drive more business towards the City of London. He has refused to back an EU-wide tax, however, because it would drive business out of London unless applied globally.

His summit concern is that a tighter-knit "inner core" of 17 countries with their own treaty and financial controls would risk Britain being absent from decisions directly affecting the country - particularly on the EU single market and financial services rules crucial to the City of London.

Mr Cameron will join fellow EU leaders for dinner in Brussels and the first round of summit talks to try to hammer out a long-term eurozone stability deal.

And as the latest crucial summit unfolds over Thursday night and into Friday, Mr Van Rompuy himself will be pushing for a different scenario in which existing EU rules are used to enable tougher economic controls to be agreed without a treaty change - and without the need for ratification of the move by national parliaments.

Latest News

Latest Sport

Latest Showbiz