09/12/2011 Daily Politics


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I said before coming to Brussels that if I could not get adequate


safeguards for Britain in a venue European treaty then I would not


agree to it. What is on offer is not in the interests of Britain so


Hello and welcome to the Daily Politics on Friday. So, after ten


hours of negotiation, the Prime Minister refuses to put pen to


paper and sign a new European-wide treaty to help save the euro. Mr


Cameron said it just was not in Britain's interests to do so. He


said it was a tough decision but the right one. Some accused the


Prime Minister of scuppering a full accord to appease his party.


President Sarkozy of France said Mr Cameron's demands had been


unacceptable. The 17 countries which use the euro will draw up a


new fiscal pact along with others who want to join. This morning, the


PM was still in the European family photo - just. But his critics say


his actions leaves Britain isolated. And with me for the duration,


Alistair Heath from City AM and Rowenna Davies from the Guardian.


Welcome. So, Nick Clegg was fully behind the Prime Minister. Boris


Johnson says he played a blinder. And most Tory Euro-sceptics appear


to be rubbing their hands with glee. Not everyone is happy though. The


former Foreign Secretary, Lord Owen, says he has left the UK in a mess


and Labour accuse his isolationist approach as a sign of weakness, not


strength. So who is right and who is wrong? In a moment, we will hear


from our guests. But let's listen to what David Cameron had to say.


said but ball coming to Brussels that if I could not get adequate


safeguards for Britain in a new European treaty then I would not


agreed to it. What is on offer is not in the best interests of


Britain so I did not agree to it. Those countries that signed the


treaty and the agreements they have made tonight for co-ordinating


their budgets are making sure there isn't more surveillance of what


they do and the fiscal integration they need, we wish them well


because we want the eurozone to sort out its problems and achieve


the stability and growth at all of Europe - Britain included - needs.


We wish them well in that regard. The agreements they made tonight


may help them to do that. The key question for Britain was, do you


allow that to happen within the European Union treaties if you are


not happy with the safeguards you are given? I was not prepared to


agree that treaty and take it to Parliament in that way. That is why


are rejected signing this treaty today. The right thing for Britain,


a tough decision but the right one. Not many got sleep only just time


to change their shirts. Angela Merkel has a shirt as well. York


over the you? It is a total mess. - - your overdue. David Cameron


failed to get a financial deal in the eurozone. The second thing he


prepared to do was to provide a role for Britain which had


meaningful influence at will. We're going to become increasingly


isolated and that will be dangerous for this country. While this is


going on, his Conservative backbenchers and MPs are laughing.


It is a serious risk. What could he have done? He should have said, we


need to go forward with this deal. He threw his toys out of the plan


to -- the pram. They are doing it anyway? They will do it without


Britain having any influence at will. You think we should have


signed up to a balanced budget? What I think is, if David Cameron


had gone in... There are certain reasons why you think it is not a


good deal for Britain. If there was not going to be a greater growth


strategy. The only reason he was against it was partly because of


the banks and because he wanted to protect the City of London and


because his Euro-sceptic MPs did not want him to be a part of it.


think it was a great move from David Cameron. I did not think he


would be so decisive. This treaty had nothing to do with saving the


euro. It is harder for some countries to have a budget deficit.


He did not address fundamental issues which made the euro is not a


sustainable currency. The treaty is about growing the powers of the EU.


There are a whole series of policies that have nothing to do


with posting the single currency - wanting a Tobin tax, corporation


tax. Other eurozone countries did not want these things, not the UK.


That is the overdue you have given us. We will look into more detail


at what happened last night. The UK went into the negotiations last


night with the Prime Minister determined that any deal to


strengthen the eurozone should include safeguards for the UK. On


the table was a full-scale change of European Union treaties which


would have enshrined fiscal discipline on eurozone countries,


including common rules on taxation and budgets. In exchange for


signing up to this, David Cameron is reported to have demanded: Any


transfer of power from a national regulator to an EU regulator on


financial services would be subject to a veto. Banks should face a


higher capital requirement. The European Banking Authority should


The European Central Bank be rebuffed in its attempts to rule


that euro-denominated transactions These safeguards, however, were


rejected by other European leaders, including the French President,


Nicolas Sarkozy, who said, David Cameron requested something which


we all considered was unacceptable At that point, the UK exercised its


It led to 23 countries signing up to a new euro-plus group. Sweden


and the Czech Republic could soon join them, which leaves just the UK


and Hungary outside. In the last few minutes, the Hungarian leaders


have been talking about joining as well. They have indicated to the


BBC that they will also sign up. Well, you might think this is a


good day for the UKIP leader, Nigel Farage, so let's ask him. He joins


me now from Brussels. Are you happy? On the face of it, puree.


When you think there tick, you realise he has actually gained


nothing. -- about it. His negotiating position was too weak.


If he had said quite give me this will we are leaving. My real worry


is that the financial markets are extremely vulnerable. Every time


the bond markets which for the euro has a problem, Mr Sarkozy will say


it is the City of London and let's regulate them even more. We find


ourselves in the European Union in a permanent voting minority and the


least popular we have ever been. what grounds can you claim that if


Mr Cameron had threatened to leave the EU that Mr Sarkozy would have


put a Cold War around the City of London? If you go into negotiations


in Brussels, you have to be very tough and carry a big stick or you


will not get anything. Mr Cameron went in thinking he would get a


deal and exercise the veto. If he things Euro-sceptic debate would


have been appeased by this, he would have been wrong. -- thinks.


On what grounds do you think the French would be agreed to a gold


walk around London? -- would agree. We have come out of this with


nothing. And not a single power has been returned. We are now in the


worst of all worlds. Thank you for joining us. So what do the Labour


Party make of all this? Joining me from Glasgow is the Shadow Foreign


Secretary, Douglas Alexander. What Ed Miliband had vetoed the deal?


would have negotiated a better deal for Britain. When he asks the


fundamental question, what has Britain gained at of the


positioning and posturing of David Cameron last night, the answer is


nothing? Britain is more isolated than it has been around the


European table than at any point in 35 years. It is a worrying time for


Britain. Despite the securing of some headlines, David Cameron


failed to secure the real interests of Britain last night. In terms of


the City of London, I do not think it serves the interests of the City


of London to be totally outside European financial regulation.


Being part of that has been part of the success of the city in the past.


If there were real concerns, there were other options available. An


emergency brake procedure up to inter-governmental level, where


Britain could exercise a level, that could be a way forward. David


Cameron reached a point in his mind, perhaps the boy got to Brussels,


where he realised he could not get what he wanted in the House of


Commons through his own backbenchers. If Nicolas Sarkozy


was being awkward, it would have been up to a British Prime Minister


not to have agreed. We would have started the negotiations in a


different place. What you have vetoed it in the end? We would have


offered a different position. had turned that down and said he


was not giving anything special to the City of London, it would you


have vetoed the deal? We have always been in a position of QMV in


relation to the city was it takes skill, judgment and disciplined to


get the outcome. Would you have vetoed the deal if the French had


said No vote -- help for the City? Let's be clear, there were other


options available to David Cameron. I cannot prejudge the reaction of


President Sarkozy to a different Prime Minister negotiating in a


different way. This issue will unravel for Cameron. He has


exercised this in the service of what and to gain what. What


additional protections had been secured for the City of London? The


answer is nothing. We're not in a room. We are not in the room


because you did not take us into the euro. We are where we are


because your government did not join them the eurozone. One of the


things we would have been seeking, which I do not sense David Cameron


asked for, would be to make sure Britain does have the seat at the


table. We are in a position where 25 European countries would be


discussing hugely important issues. Britain would not even have a voice


in those discussions. Why would the French give us a seat at the table?


They have told Mr Cameron to shut up. Do you think Mr Sarkozy would


listen to you? This has been the consequence of a shambolic and ill


judged negotiation strategy, stretching back months. David


Cameron was telling Chancellor Merkel he did not want to be in the


room. That is what he told her as recently as March. I am not


surprised that other European leaders are confused at the


position of David Cameron. Where were the Danes, the polls, the


Dutch, of the Swedes? They were natural allies in pass negotiations


but they were nowhere last night. - - past negotiations. We are more


isolated than we needed to be. Earlier today, Alastair Campbell


tweeted: Got to admire Bill Cash. Just sat tight and waited for a


leader to come along and do his work for him. Will be excitedly


planning next steps. So, is he right? Let's speak to Mr Cash now.


I think he has done exactly the right thing. It is it all down to


you, is it? I am glad he has followed the advice that many


people have been trying to forgive him -- to give him. What does he do


next? The position basically is that the other member states threw


down the gauntlet. They wanted to move towards a political union.


What they came up with may well prove to be outside the treaty is


anyway. He is creating a pass towards for renegotiation of our


relationship with the European Union which has been well overdue.


The causes of the present troubles in the European Union come from the


structure of the treaties and over- regulation. You save for


renegotiation is a euphemism for actually now a path which we have


to follow, which will actually end up by our entering into a new


relationship and looking outwards to the rest of the world. Why do


you think the Germans or the French had any interest in creating a new


relationship for Britain? They are more likely to say, either accept


it as it is, or get out? That may well be the end game. I am saying


that at this juncture he has done the right thing. You would like


that endgame, wouldn't you? believe we have reached... I have


seen an historic turning point. Just say it pulls up I want to get


out. Get it off your chest. I know you want me to say it. There are


several months ahead of renegotiation to take place. We


have not seen a detail yet. We will hear on Monday when he comes back


from the summit in the House of Commons. It is an historic moment


for Britain and the Conservative I could not get Mr Alexander to say


he would have vetoed the deal, and I cannot get Mr Cash to say what he


really thinks. Anyway, it looks like an number of the Liberal


Democrat partners in the government will have a few choice words to say.


Joining me, the former chairman of the Conservative Party, Norman


Fowler, and the chair of the European Parliament Economic and


Monetary Affairs Committee, Sharon Bowles. So, this has got Lib Dem


support? He negotiated from the standpoint that was agreed with the


Liberal Democrats to try and do something for the City. I have to


say, that was against my advice, because I could tell you that


nothing like that would ever have been on the cards, because


financial services are part of the single market. So, we should have


put the financial services into that basket. This is a simple


question which demands a simple answer - does what Mr Cameron has


done it in Brussels have Lib Dem support? I think because he stuck


within the agreed lines, then probably the Lib Dems are very


disappointed, but they will have to concede that it was a dangerous


game, and he played and lost. Cameron could not have done


anything else and held his party together, could he? No, I think


that's right. If you go back to yesterday, we were being told by


some Euro-sceptic MPs that he was going to come back like Chamberlain,


with a worthless piece of paper. That hasn't happened. That Tory MP


owes David Cameron an apology, I would suggest. I would have thought


so, and I would think owes us a piece of silence on this debate.


The it is the first bit of good news I have heard all morning. I


think what David Cameron did his, he went with an agenda, France were


not prepared to negotiate on it at all, not on any bit of it, and he


said no. The Liberal Democrats, I heard the equivocation on your side,


I heard what Mr Alexander was saying, I'm still no clearer on


what Labour Party policy is on this. I think Cameron has done exactly


the right thing. And I do not come from a Euro-sceptic background. I


spent most of the early 1990s fighting on Maastricht. I remember


that well, I was in the trenches, covering you. Don't the Lib Dems


and sound a bit divided? I am confused by both. I thought David


Cameron was supposed to be a strong leader, who could control his


backbenchers. Who told you that? That was what his reputation was


supposed to be. But obviously not. It is interesting because we are


seeing a change in the perception of David Cameron, as someone who


was quite reactionary and actually quite weak. Absolutely totally


wrong on that. As I have said, I am not a Euro-sceptic, in the sense


that bill Cash is a Euro-sceptic. What you have found, I would be


amazed if there are any in the Conservative Party, in my part of


the party, who are against what he has done. It is not as if he has


been pushed from behind by some curious collection. Coming back to


the Lib Dems, Mr Cameron cannot act alone, he's in coalition, I would


suggest there is a fair chance, maybe higher than that, that this


is going to cause your property real problems, and divide it quite


deeply? -- your party. Well, there may be problems. Looking at it from


a European angle, I think it was something which was never going to


be a possibility for us to negotiate, and therefore the


outcome was predetermined. What about your leader? He agreed to it


because it was a compromise, it moved a long way from where it


might have been. Vince Cable, Chris Huhne, Lord Oakeshott, who seems to


speak for everybody these days, they are not happy. No, I think the


way in which we are isolated now, this is very damaging. We have not


maintained the status quo in financial services. As I said,


that's the problem, if you play and lose, you're worse off. Watcher


David Cameron do now? That is exactly the point. He actually went


in with very few demands, very weak demands, and he got nothing. This


suggests to me there is nothing he can get from the EU. They're on a


particular course, they will go a certain way, they want to integrate,


harmonise and centralised. But that fundamentally changes our


relationship. But that's true whoever was in power. Whoever was


the government... I agree, I think it would have been exactly the same


had Labour been in power. We have been at this crossroads for years,


I believe, trying to delay it. Either you choose to go completely


in the EU, with the euro, total union, or you do not. You have got


to make that choice. At some point the UK was going to have to make


that choice, because Whiteley we did not join the euro a few years


ago, under Labour. Is there any credence to this idea, which Bill


Cash was mentioning, that the British should go for a fundamental


renegotiation of our relationship? If I was going to go into


negotiations, I'm not sure I would choose this moment to go back to


Europe and say, we want to talk about employment laws and one of


those things. There's an awful lot of play still to be had. We talk as


if the 17, who have already agreed upon everything... There is a


helluva lot of discussion and negotiation which has got to go on.


Germany's view is not going to be the same, I suspect, as a number of


other countries, who are more on the fringe of Europe. We should not


take for granted that all 17, plus the other six, that they go


national parlour to -- they go national parliaments are going to


accept that they can never have a deficit of more than 3%, that their


budget will have to be submitted to Brussels before it can be approved,


that there will be an economic Planning Commission... Why would


people signed up to that, including countries like Ireland? If I was


another country inside the euro, I would have serious concerns with


this treaty, and how it affects our national sovereignty. But these


concerns do not apply to Britain. For us, it was about whether we


want to accept more financial regulation of the city, and we said


no. That to me sounds surprising, didn't we just have a financial


crash? It is much more profound than that. Cameron was actually


going in asking for the power to regulate the City more heavily than


the EU once, in the key area of capital requirements. So it is not


as simple as he himself has led us to believe. He was in favour of the


Tobin tax, and not relocating outside the City. But he was asking


for unanimity on various things which previously had been done by


qualified majority voting, which, under the treaty, would have passed


us that. That's why it was never going to be the case. Will be look


back in history and see this as the day that Britain began a long but


inevitable withdrawal from Europe? I think we could look back, but I


think there is an awful lot of play still to be had, and it is


extremely difficult to forecast. But what it does it is, it


highlights that we have got a different concept, at least the


Conservative Party has got an entirely different concept on what


Europe is about. We do not want a centralised Europe, we have never


made any secret about that, and we're not going to go ahead on a


position where we are being given that centralised Europe. Stick with


us, we have locked down the studio, you cannot leave just yet. We are


going to get some thoughts from our political correspondent Iain Watson,


who has been following events in Brussels overnight. He's still


awake, yes, there are he is, a breathing, smiling, sentient human


being, and a BBC correspondent. Mr Watson, what is the mood in the


British camp this morning, other than exhaustion? Certainly, it is


exhausted. I think the mood is that Britain did the best it could under


the circumstances. Basically, what I am picking up here is that there


was quite a lot of irritation with the British position, because they


are not in the single currency. To choose one fairly colourful


continental phrase, it was said that David Cameron wants to bring


along, Surrey, he wants to join the wife-swapping party, without


bringing along his own wife to the party. Given that is the case, what


seem to be innocuous demands to the rest of us, about protecting the


financial services, protecting the City of London, has been


interpreted here as driving a coach and horses through the single


market. I think it is a big miscalculation, actually. While the


French were very sceptical towards Britain, the Germans and others


would make compromises. In that sense, a brave face is being put on


it in the British camp. But David Cameron is saying, different


countries can do things at different speeds, why not? I


suppose this time, it is 25, even 26 countries doing one thing, and


Britain doing another. Although he's getting a lot of plaudits from


some Euro-sceptic MPs back in London, for not signing up to this


deal, which he found an acceptable, at the same time, when I was asking


about this at the press conference, he did admit there were some risks


for Britain in this, and he said it was very important to make sure


that the European institutions serve all 27 members, not just this


large inner core. Go and have another coffee, thanks for joining


us. This may be stupid, I'm actually not quite sure what all


this is about. Last time I looked, we had a major European sovereign


debt crisis, which needed funding now, which needed the ECB to do


something, to print money ought to do eurobonds, which needed the


Europeans to come up with a massive bail-out fund - none of this has


been talk about. What's happening? Exactly, nothing really is


happening. This is really a revamped version of the stability


and growth package, which was agreed during the Maastricht treaty,


which was to be responsible when it came to fiscal policy. So what this


is now saying is, actually, we're going to have a bit of a harsher


system, and therefore, everything will be sorted. It means the


European Central Bank will be relaxed and will be willing to buy


lots of European bonds. But it has already said, yesterday, it is not


going to do that. It was the president of the European Central


Bank who said, we are not doing eurobonds, we are not going to be a


lender of last resort to governments, and we are not even


going to shovel our money around the back door to the IMF, so they


can hand it out. I have to say, I never thought the ECB was going to


jump in very quickly, and the rally that we had following his remarks


in the European Parliament last week, I thought that people were


misunderstanding what he was saying. I think they still will be active


in the secondary bond market. They have increased the lending lines to


banks. It is certainly the lender of last resort to banks, that's for


sure. And ultimately, they can accept a lot more things on


repurchase, and they can therefore buy sovereign bonds, or re-purchase


sovereign bonds in that way. not quite what Mr Sarkozy was


talking about. No. We will have to leave it there. Thank you all.


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