Cameron defends EU veto decision

After 10 hours of talks in Brussels on Thursday about how to bring stability to the eurozone and European markets, Prime Minister David Cameron refused to agree to the proposed EU reform deal saying it wasn’t in Britain’s interest.

He told Channel 4 News: “There are countries in the euro that are having a tough time, that have got to sort out their currency, including giving up a lot of sovereignty. Now if you’re going to do all that you need safeguards, we couldn’t get them so it’s better off they do it separately.”

Despite facing isolation in Europe after all 26 of the other EU member states agreed to go ahead with a separate accord on a “fiscal compact” for the euro, Mr Cameron said Britain would still play a pivotal role on the continent.

I said when I came to Brussels if I couldn’t get what was good for Britain then I’d be prepared to say no – and I’ve been as good as my word. David Cameron

“Britain is a major part to the EU, a key contributor to it, including financially, so we have a very strong say,” the prime minister maintained.

“Having them with a treaty inside the EU that wouldn’t have protected our interests properly would be a worse outcome, that’s why I said no, I said when I came to Brussels if I couldn’t get what was good for Britain then I’d be prepared to say no – and I’ve been as good as my word.”

‘Unacceptable demands’

French President Nicolas Sarkozy responded by saying that Mr Cameron’s demands were “unacceptable”.

“We were not able to accept (the British demands) because we consider quite the contrary – that a very large and substantial amount of the problems we are facing around the world are a result of lack of regulation of financial services and therefore can’t have a waiver for the United Kingdom,” he said.

Read more: Will UK be left out in the cold after EU veto?

European Commission president Jose Manuel Barroso said he regretted that unanimity on a treaty change had not been possible.

“Those that have today approved this new fiscal compact have stated that they want to put it as soon as possible into a new fully-fledged treaty, after revision of the current treaties,” he said.

“Having seen it was not possible to get unanimity, it was the proper decision to go ahead at least with those ready to commit immediately. That includes all 17 in the eurozone, plus some who are not in the euro area but want to take part in this fiscal compact.”

‘Balanced budgets’

The 17 eurozone countries, and the other EU states apart from the UK, say they will commit to “balanced budgets” for eurozone countries. This means the eurozone countries will write in their national constitutions a commitment to make structural deficits no greater than 0.5 per cent of gross domestic product.

There will be automatic sanctions for any eurozone country with a deficit which exceeds 3 per cent of GDP, and national budgets will be approved by the European Commission.

Additionally, eurozone and other EU countries will provide up to 200bn euros to the International Monetary Fund (IMF) to help debt-stricken eurozone members.

Read more: Saving the euro - anatomy of a deal