09/12/2011 Daily Politics


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09/12/2011

Andrew Neil talks with guests including Allister Heath and Rowenna Davis about Europe and David Cameron's refusal to sign a new European-wide treaty to help save the euro.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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going on, his Conservative backbenchers and MPs are laughing.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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night with the Prime Minister determined that any deal to

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strengthen the eurozone should include safeguards for the UK. On

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

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would have enshrined fiscal discipline on eurozone countries,

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including common rules on taxation and budgets. In exchange for

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

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

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

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higher capital requirement. The European Banking Authority should

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The European Central Bank be rebuffed in its attempts to rule

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that euro-denominated transactions These safeguards, however, were

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rejected by other European leaders, including the French President,

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Nicolas Sarkozy, who said, David Cameron requested something which

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

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

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

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

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

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

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

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

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

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

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

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is that the financial markets are extremely vulnerable. Every time

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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fundamental question, what has Britain gained at of the

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

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

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

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Britain. Despite the securing of some headlines, David Cameron

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

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

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of London to be totally outside European financial regulation.

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

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

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emergency brake procedure up to inter-governmental level, where

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

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

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

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Commons through his own backbenchers. If Nicolas Sarkozy

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

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

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

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

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

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

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

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

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

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

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President Sarkozy to a different Prime Minister negotiating in a

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

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

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

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

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

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

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

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

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

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

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

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

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

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judged negotiation strategy, stretching back months. David

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

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

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surprised that other European leaders are confused at the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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relationship with the European Union which has been well overdue.

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

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

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:15:02.:15:02.

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

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

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

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

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

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

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

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

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

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

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several months ahead of renegotiation to take place. We

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

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

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:16:17.:16:18.

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

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

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

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

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

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Fowler, and the chair of the European Parliament Economic and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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was quite reactionary and actually quite weak. Absolutely totally

:19:23.:19:30.

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

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

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

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

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

:19:48.:19:53.

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

:19:53.:19:57.

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

:19:57.:20:01.

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

:20:01.:20:08.

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

:20:08.:20:12.

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

:20:12.:20:16.

be a possibility for us to negotiate, and therefore the

:20:16.:20:21.

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

:20:21.:20:24.

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

:20:24.:20:29.

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

:20:29.:20:33.

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

:20:33.:20:40.

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

:20:40.:20:43.

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

:20:43.:20:49.

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

:20:49.:20:54.

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

:20:54.:20:58.

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

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

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

:21:07.:21:11.

harmonise and centralised. But that fundamentally changes our

:21:11.:21:15.

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

:21:15.:21:20.

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

:21:20.:21:24.

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

:21:24.:21:29.

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

:21:29.:21:35.

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

:21:35.:21:39.

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

:21:39.:21:43.

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

:21:43.:21:49.

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

:21:49.:21:53.

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

:21:53.:21:57.

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

:21:57.:22:00.

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

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

:22:03.:22:10.

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

:22:10.:22:14.

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

:22:14.:22:19.

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

:22:19.:22:23.

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

:22:23.:22:27.

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

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

:22:32.:22:37.

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

:22:37.:22:41.

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

:22:41.:22:44.

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

:22:44.:22:52.

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

:22:52.:22:58.

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

:22:58.:23:01.

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

:23:01.:23:06.

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

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

:23:10.:23:13.

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

:23:13.:23:18.

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

:23:18.:23:23.

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

:23:23.:23:28.

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

:23:28.:23:32.

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

:23:32.:23:37.

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

:23:37.:23:42.

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

:23:42.:23:46.

for unanimity on various things which previously had been done by

:23:46.:23:49.

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

:23:49.:23:54.

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

:23:54.:23:59.

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

:23:59.:24:04.

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

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

:24:08.:24:11.

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

:24:11.:24:15.

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

:24:15.:24:18.

Conservative Party has got an entirely different concept on what

:24:18.:24:22.

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

:24:22.:24:26.

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

:24:26.:24:30.

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

:24:30.:24:34.

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

:24:34.:24:38.

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

:24:38.:24:41.

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

:24:41.:24:46.

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

:24:46.:24:54.

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

:24:54.:25:00.

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

:25:00.:25:03.

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

:25:03.:25:08.

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

:25:08.:25:10.

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

:25:10.:25:16.

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

:25:16.:25:25.

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

:25:26.:25:29.

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

:25:29.:25:38.

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

:25:38.:25:42.

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

:25:42.:25:46.

financial services, protecting the City of London, has been

:25:46.:25:49.

interpreted here as driving a coach and horses through the single

:25:49.:25:54.

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

:25:54.:25:58.

French were very sceptical towards Britain, the Germans and others

:25:58.:26:03.

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

:26:03.:26:06.

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

:26:06.:26:10.

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

:26:11.:26:16.

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

:26:16.:26:20.

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

:26:20.:26:24.

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

:26:24.:26:30.

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

:26:30.:26:34.

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

:26:34.:26:37.

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

:26:37.:26:42.

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

:26:42.:26:46.

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

:26:46.:26:51.

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

:26:51.:26:56.

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

:26:56.:27:00.

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

:27:00.:27:06.

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

:27:06.:27:10.

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

:27:10.:27:15.

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

:27:15.:27:18.

happening. This is really a revamped version of the stability

:27:18.:27:22.

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

:27:22.:27:26.

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

:27:26.:27:29.

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

:27:29.:27:33.

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

:27:33.:27:36.

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

:27:36.:27:40.

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

:27:40.:27:48.

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

:27:48.:27:51.

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

:27:51.:27:55.

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

:27:55.:27:59.

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

:27:59.:28:05.

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

:28:05.:28:10.

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

:28:10.:28:14.

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

:28:14.:28:18.

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

:28:18.:28:22.

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

:28:22.:28:26.

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

:28:26.:28:31.

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

:28:31.:28:38.

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

:28:38.:28:42.

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

:28:42.:28:48.

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

:28:48.:28:52.

Andrew Neil has the top political stories of the day.

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 wasn't in Britain's interests to do so. Officials accused the prime minister of scuppering a full accord to appease his party.

Andrew talks about Europe with UKIP leader Nigel Farage, shadow foreign secretary Douglas Alexander, former chairman of the Conservative Party Norman Fowler, Lib Dem MEP and chair of the European Parliament's Economic and Monetary Affairs Committee Sharon Bowles, and Tory MP Bill Cash. There are also views from City AM editor Allister Heath and Guardian journalist Rowenna Davis. BBC political correspondent Iain Watson is live from Brussels.