Belfast Telegraph

Saturday 20 December 2014

Osborne at EU fiscal compact talks

French finance minister Francois Baroin speaks to Chancellor George Osborne during a meeting in Brussels (AP)
French finance minister Francois Baroin speaks to Chancellor George Osborne during a meeting in Brussels (AP)

Chancellor George Osborne is attending the first meeting of EU ministers on a new "fiscal compact" - but only as an "observer" after Britain's veto of an EU Treaty change.

David Cameron was isolated 26-1 at a dramatic EU summit in December, when he refused to sign up to the necessary treaty adjustments to enforce tougher EU financial rules on the struggling eurozone.

The Prime Minister did not bank on the 17 eurozone nations being joined by the other nine non-single currency member states, and faced accusations that he had excluded Britain from the top table when key decisions affecting London were discussed.

Within days, German Chancellor Angela Merkel had offered the UK an olive branch - observer status at talks on the fiscal compact the 26 wanted in the absence of a formal treaty change.

The terms of tougher financial powers for Brussels over eurozone economies are due to be set out at an emergency summit of EU leaders next week, and formally approved at another summit in March.

The more immediate problem is to resolve the terms of a new bailout for the Greek economy, with the prospect approaching of a Greek default and a new low in the rollercoaster ride the eurozone has experienced since the economic downturn began to bite in 2008.

Last week European Council president Herman Van Rompuy, who chairs EU summits, insisted the eurozone would achieve financial stability thanks to the discipline offered by the fiscal compact, once it is in place.

He said he expected talks on the compact - with Britain as a silent presence - should be completed by the end of the month.

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