UK goes solo as EU forges ahead

After 38 years of European Union membership – and 65 years of government debate on the UK’s relationship with Europe – David Cameron has dramatically vetoed a revision of the Lisbon treaty.

For a few hours this morning, Hungary, Sweden and the Czech Republic also considered opting out of the “Merkozy” plan. But Britain now stands alone, leaving the other 26 EU countries to forge ahead on a new “fiscal compact” without any input from the UK government.

Speaking this morning, Foreign Secretary William Hague rejected accusations that the move left the UK isolated.

“What they [EU leaders] have committed themselves to here, is to giving up more of their national control over their own budgets,” he said.

“Us standing apart from that is not being isolated – it is a very sensible thing to stand apart from that.”

But this irreversible decision to go it alone will have huge repercussions at home as well as in dealings with abroad.

Read more: Saving the Euro – the anatomy of a deal

Tobin tax

The main bone of contention for Mr Cameron was the reform plan’s proposal of a Europe-wide tax on all financial transactions – a so-called Tobin tax.

He made it clear in the days before the EU summit that Britain would not negotiate this issue, and that protecting the City of London was paramount.

“We want the Eurozone countries to come together and solve their problems,” Mr Cameron said.

“But we should only allow that to happen within the EU treaties if there are proper protections for the single market, for other key British interests.”

Conservative eurosceptics, who only last month rebelled against a three line whip and voted for an EU referendum, welcomed the news, seeing it as a step in the right direction – away from European control.

In typically bombastic form, the Mayor of London Boris Johnson called it a “blinder”, adding: “He has done the only thing that it was really open to him to do.”

From the twittersphere:

@Nigel_Farage
EU leaders’ lunch cancelled: Cameron’s less popular than me at the moment.

@paulwaugh (Editor of Politics Home)
Here in Brussels, already new outer-EU group has name: the CHUKS (Czechs, Hungarians, UK, Swedes). Will we CHUK ourselves out?

@piersmorgan
Do you think Utd & City players read all the recent ‘We Must Get Out Of The Euro’ headlines – and simply misunderstood?

@AndrewSimms_nef (From the National Economics Foundation)
Cameron’s #EU veto puts banker-hugging & City-privilege protecting before better financial regulation. Not even hidden, but brazen.

Trouble at home

But the Conservatives are not the only ones that Mr Cameron has to please – he is wedded to the Liberal Democrats and Nick Clegg, who is known to be one of the most pro-European ministers in government.

The deputy prime minister expressed “regret” that agreement was “impossible”, but insisted that he was kept abreast of Mr Cameron’s plans.

“The demands Britain made for safeguards, on which the coalition government was united, were modest and reasonable,” he said.

“They were safeguards for the single market, not just the UK.”

He has guaranteed that we will lose our influence at the top decision-making table over issues that are bound to affect us. We have shot ourselves in the foot. Chris Davies, Liberal Democrat.

However his own party members will take some convincing. Chris Davies, chief whip of the Liberal Democrat party members of the European Parliament, said that Mr Cameron had “relegated Britain to the second division of Europe”.

He added that Mr Cameron was only interested in “keeping Tory Europhobic knives out of his back”.

“He has guaranteed that we will lose our influence at the top decision-making table over issues that are bound to affect us…The consequence of the xenophobic attitudes towards our European neighbours that have been allowed to develop has been to leave Britain weak. We have shot ourselves in the foot,” he said.

Risk of isolation

This is the first time that such an important treaty with wide-ranging implications will go ahead without Britain’s involvement – and it has added to fears that it will be difficult for Mr Cameron to rebuild diplomatic relations after putting his home-grown priorities in the spotlight.

German MEP Elmar Brok told Channel 4 News: “It means in practical terms that Britain has lost influence, and if sometimes there are meetings between the 27 leaders, Britain will not be invited.

“They’ve asked too much and got nothing.”

Aside from Mr Sarkozy’s blatant dig at Mr Cameron’s refusal to negotiate – calling his demands “unacceptable” – Angela Merkel also delivered a blow to Mr Cameron’s involvement this afternoon, saying at a press conference: “I really don’t believe David Cameron was ever really with us at the table.”

And as the news was digested across the UK, and after Hungary, Sweden and the Czech Republic have come back to the EU fold, Britain’s position appeared increasingly vulnerable.

Channel 4 News Presenter Jon Snow blogged that there could be a backlash from business “and from the younger generation who in a globalised world may wish to explore the option of belonging to a wider, deeper, more fiscally responsible union.”

The FT’s Quentin Peel also blogged that David Cameron was “the biggest loser” of the EU summit so far.

“He has won no safeguards for the UK by blocking a treaty at 27, and will now be presented across the continent as the man who blocked a better deal for the eurozone,” he wrote.

Only time will tell. But as the Guardian’s Michael White said this morning, things will never be the same again.