09/12/2011 Newsnight


Stephanie Flanders with analysis of the European summit in Brussels. Mark Urban and Paul Mason report on the Prime Minister's decision to stay out of a new EU economic agreement.

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Did he jump, or was he pushed? Afraid I cannot do that. It's not


in our national interests. I don't want to put that in front of my


Parliament because I don't think I could recommend it with a clear


conscience, so I am going to say now and exercise the veto. That is


effectively what I did. David Cameron says he's made the right


choice for Britain, but was it a choice made for him by European


leaders? Did he walk away with anything? Well, he certainly


enhanced his reputation as a defender of the national interests.


Alas, for Britain, this summit was meant to be about coming together


decisively to act in the common good. We'll be asking the Europe


Minister whether his leader has put Britain on a path out of the EU.


And there is that small matter of the crisis that started all of this.


Paul Mason is here. The new EU budget rules make spending your way


out of recession illegal. So where is Europe's growth going to come


from? We assess whether this summit has done anything to take the euro


out of the danger zone. And what the past 24 hours has done to


British politics - thrilled Tory backbenchers, nervous Liberal


Democrats - how easily now can they Good evening. Or is it "auf


wiedersehn, England". So read the banner headline in one German


magazine today. 26 members of the European Union are going to


negotiate a new treaty to help make the single currency work. Britain


is not. David Cameron said he had to veto a treaty of the 27 because


the others wouldn't give special protections to our financial


services industry. Eurosceptics are thrilled, and Liberal Democrat


Ministers are trying not to look too glum. But you might say it's a


strange kind of veto that doesn't prevent the thing that the


Government wanted to stop and doesn't win the city any more


protection from Brussels than it already has. Our diplomatic editor


Mark Urban was there. Mark, what did happen? Well, it was


always going to be complicated. If David Cameron had gone along with


what the others wanted, then there would have been this process of


treaty change, triggering all sorts of legislative and political steps


in the member countries, but because he didn't want to go along


with it, and that process, by the way, would have taken months -


people say until March - to produce the sort of effects that we're


looking at, so it was never going to be a quick-fix, but because


David Cameron said no and did use his veto - a pretty major moment in


European history - they can now blame him for things that go wrong


subsequently. They call this "the family photo", but this clan now


has a black sheep. After a night in which Britain had found itself


alone on the new package of measures to protect the euro, there


was an attempt to make up between Britain's has been itial


antagonists, but there was no disguising that the decision to


veto EU treaty changes left David Cameron a lonely figure this


morning and allowed Nicolas Sarkozy to apportion blame.


TRANSLATION: As to your question about our British friends, in order


to accept reform of the 27-nation treaty, David Cameron proposed


something we all thought was unacceptable. Namely, there would


be a treaty written into the protocols that would allow the UK


to opt out of rules regarding financial services. Having gone on


until 5.00am this morning, some other countries were ready to be


even blunter in describing Europe's new alignment. Brit, not Europe -


Brits divided, and they are outside of decision making. Europe is


united. In the press room, those with various political axes ground


them energetically this morning, giving their interpretation of what


happened and where it left Britain. David Cameron has been wandering


around this building virtually alone. We have had Sarkozy spiting


with venom. I fear the City of London will have a very heavy price


to pay for this in terms of legislation coming down the road.


If Cameron goes back to the United Kingdom if he thinks by vetoing


this treaty and appeasing them he has another thing coming. Britain


sees this as a definitive placing on the margins of the EU. Is that


right? Let's remember that monetary union is only one aspect of what


the European Union does. The bulk of decision-making in the EU


remains a matter for all 27 member states. Of course, the narrative of


Britain's isolation in Europe is such a well-worn one that the press


can always be relied upon to lap it up. Thuest tried to combat it in


recent weeks by suggesting the UK might be at the head of a group of


countries outside the EU that shared similar views, but last


night really gave light to that, and the question now for the coming


months is how Britain is going to exert any influence in the


discussions that lie ahead? For months, 17 of the eurozone have


been central to this crisis, and the ten other members of the EU,


peripheral. Last night, six of those others agreed to back the


Franco-German plan. Additionally, Hungary, the Czech Republic and


Sweden referred it for parliamentary approval. That left


only the UK unambiguously opposed. Mr Cameron now cast doubt over


whether Europe's institutions, particularly the Commission,


effectively its Civil Service, should be allowed to support the


other nations moving ahead when one nation objects. The institutions of


the European Union belong to the European Union. They belong to the


27. They're there to do the things that are set out in the treaties


that we've all signed up to over the years, and that is an important


protection for Britain. However, those running the EU beg to differ,


arguing they can throw their organisational weight behind those


countries that have signed up to the fiscal compact. This formula


has some handicaps, but we will try to overcome them, and I think we


have - we will need a large interpretation of the role of


institutions and others, as we did it in the past. Pushing on without


changes to Europe's key treaties does, though, threaten a power


struggle. The new fiscal compact strengthens the role of the


commission, the unelected officials, but what about the other two


pillars of the EU, the council, its 27 member governments collectively


and the European Parliament? There were already rumblings in Brussels


today. This is possible if it is a copy paste of the existing treaty


with the same role for the European Commission as today and with the


same democratic control by the European Parliament because I


cannot accept that we shall have a whole economic governance inside


the eurozone and inside the European Union without the


democratic control by the European Parliament. So for those processing


what everyone apart from Britain agreed, there are many open


questions still. This could take months of negotiation and create


its own diplomatic gridlock. That's not fast enough for countries that


want the underlying sovereign debt problem solved quickly. We have new


governments in Italy and Spain. We have signals from both of them that


they're doing more to address their - their economies in deep distress.


That's the most important step to take. I think that this governance


issues are of importance, but it's much more related to the crisis


management. Britain's exit from this negotiating process is a


gamble. Quite apart from the UK domestic aspect, it's complicated


life for the others. They're unlikely to forget that in the


eurozone's hour of need, Mr Cameron put national interests first, and


they may not forgive him either. That was Mark Urban in Brussels.


Before we came on air, I spoke to David Lidington, the Minister for


Europe. Minister, what was David Cameron so frightened of last night


that he had to take this step? The position he was faced with was that


if he accepted a treaty at the level of 27, that would be an


amendment to the treaty governing the whole of the European Union,


its institutions, the way it does business, and there was a real risk


that without the safeguards that he wanted included in that treaty at


27, that you would over time have a read-across from the closer fiscal


integration that the eurozone countries want to do towards


measures that would influence financial services, in particular,


but also the single market as they affect Europe at 27. It's such an


odd kind of veto because the thing you wanted to stop is going to


happen without those safeguards. Aren't you worried about that?


Clearly we have to be vigilant, not just on financial services, but on


British interests more widely within the European Union. If you


look at exactly what happened over the last 12 months, what you've


seen is a number of initiatives coming forward where George Osborne


and his Treasury team have negotiated very hard, where they've


worked with other European countries who have agreed with our


views, and they've got a lot of that legislation in a form we have


been able to live with. With this decision David Cameron has taken,


do you think it's really more likely that that's going to happen


in the future or less likely? think that people are going to


continue to work on the basis of common interests. They're going


ahead with this. They're irritated with what we've done. Realistically,


surely there is more chance they're going to go ahead with things the


City doesn't like than a few weeks ago when we still might have had a


small amount of good will. I think there is an inherent risk in the


euro that you could get the growth of rival blocks, and we have to


work to avoid that. I have never pretended that risk was absent, but


what I think is a mistake is to see that the eurozone or the eurozone


plus or the - are all monolithic, cohesive blocks. What you've got


are countries, particularly in the eurozone, that have come together


for a particular purpose - yes? And we actually want them to succeed


in... Yes, that's... If I can finish the point that who on many


issues have a huge overlap of interests with the UK, and you talk


to a lot of eurozone countries, and they'll say, "We want to continue


working with you precisely to see elsewhere". Do you want this to


succeed, this treaty with 26 members? To be honest, I never


believed that a treaty was going to be the key to solving the problems


of the eurozone. I think that the problems of the eurozone - it's


certainly in British interests that the eurozone sorts its problems out,


but the key to that is first of all dealing with the immediate crisis


through working out the details of the Greek debt, the bank


recapitalisation and the strengthening of the, f,... If this


is an irrelevance, we don't want to help them by allowing them to use


European Union resources... It's not an irrelevance when you have a


change to the Treaty of Lisbon, which because that treaty governs


all the European institutions and the way in which the European Union


our vital economic interests. are Europe Minister. You must have


some sympathy with your counterparts in Europe who would


say, "They're saying they have made a principled decision. This just


seems petty." It's not winning any friends at all this move, is it?


think what we have to make clear is yes, we'll stand up for British


national interests when it comes to a decision, but that we also


continue to want the eurozone to work successfully to restore


economic stability, and if you listen to - I am sure you did - to


what Chancellor Angela Merkel said in her press conference after the


summit was concluded, she said that she would be continuing to work


with David Cameron and the United Kingdom. And what do you think of


Paddy Ashdown saying that this is 40 years of UK diplomacy down the


drain? No. I think that is an exaggeration and if I look at what


Nick Clegg said and Menzies Campbell said today, you'll see I


think that the Liberal Democratic leadership accepts the Prime


Minister, given the choice faced him last night had no option but to


take the decision he did. Isn't this the start of a road that leads


quickly to us leaving the EU? because there are important British


interests which I think mean that we are right to remain as members


of the European Union. But it's 26 and one - 26 countries who have


carried on and got their treaty and everything else and one country


outside. You really think that's sustainable? No, because you're


looking at a structure under which decisions about did regulation of


economic affairs will be taken at the level of 27, in which


discussions about foreign and security policy will be continue to


be taken at the level of 27, where the United Kingdom is one of the


leading European countries. David Lidington, thank you very much.


Thank you. We'll have more on the politics of


all this in a minute. But now, big bazookas - that's what Paul Mason


and I thought we'd be talking about today. David Cameron said the


Eurozone needed to come up with one, an overwhelming show of force to


set fear into the heart of any hedge fund manager planning to make


money from the Euro's demise. But it doesn't seem to have turned out


that way. Germany seems to have persuaded the others to make the


Eurozone a lot more - well, German. But there's little sign that


Chancellor Merkel or the European Central Bank offering to use their


big bazookas in return. Paul is Most people in the markets think


not, and it will be the market to decide this. Yesterday, with the


European Central Bank pumped money into the banking system, making


borrowing very easy to do for banks, will work and will stop the banks


collapsing in this ever-increasing credit crunch we are seeing in


Europe. When it comes to the actual sovereigns, the countries that


could go bust, the problem remains. This is a graphic produced by


Capital Economics, a London consultancy. Spain and Italy need


to borrow about one or trillion over the next few years. They


cannot borrow at the moment because people don't want to lend it to


them because they fear they might lose it. So it has to come from


what we thought would be a bazooka Mark 2. This is what it could look


like. The EFSF, the taxpayers' money against which they will


borrow some more. That take Shittu around half a trillion. Another


half an from B E S M, but they could run in parallel. -- From D.


And this is the IMF. That will get some money from Europe and blended


back. There is there bazooka. His is big enough. -- that is big


enough. A bit at the bottom his country's


borrowing. If that should collapse, and Standard & Poor's comes


overnight and says she cannot borrow any more at the rates you


did, that things collapse. -- then things collapse. People will be


downgraded and it will be by to the bazooka.


-- goodbye. All of that could be one big


question mark, we don't know if any of that could happen.


At least we know what that could look like.


It is odd, because you say the market has said this is not enough,


but they are not happy with it, nor have they tend to today.


No. -- nor have they tanked. The small print, it is not that


small, they keep it up detailed up- to-date is that in future, eurozone


government are not allowed to have a structural deficit over 0.5% of


their GDP. A Briton's is currently 4.5 and after bore years of George


Osborne's austerity, we will get it down to 2.5 -- after four years. If


you are going to impose austerity, where does growth come from? One


bond participant was very straight with me on this. I think we need a


fiscal union to accommodate a monetary union. But what we have


got it looks much more like an austerity Union. We have got limits


on deficits, we have got a big push to reduce spending and this reduced


government spending looks set to come at the same time as banks


tighten up and they reduce private sector spending and that


constitutes a double whammy to growth. Thank you very much, Paul.


We are going to cast an eye a bit more over the summit and work out


whether the euro and the world economy has been saved denied. --


saved the tonight. We have that Gertrude Tumpel-Gugerell, a member


of the ECB Central Board over the last eight years and they are


joined by Mohamed El-Erian. We should start with you, you are the


ones with your one trillion dollars and your fund, you could make a or


break this, are you piling in or getting out even faster? I don't


think we can make it or break it, but our assessment is they took


some important steps, but they are not sufficient, so this is neither


a quick fix nor is it a comprehensive fix. So we remain on


the sideline in terms of engaging in the bond markets of the most


vulnerable European economies. is quite a bad result, because we


were being told all of these things about 10 days to save the euro,


five days to save the euro. This was supposed to bring a step change


in the thinking of people like you. Think of it in the following way:


everybody recognises that the eurozone building is very fragile.


So the eurozone is now building another building and all they have


done is laid the foundations. They haven't yet put the different


floors on, so people are not going to move from the old building to


the new building, they are going to move from the old building out.


That is why Europe has to accelerate what it is putting in


place. It is not enough to put in a foundation and say we are there to


come back in March and build another few flaws. Gertrude Tumpel-


Gugerell, you are sitting in the institution, or you used to, that


was supposed to be one of the flaws of that institution. We talk about


the ECB being the crucial part of the end solution to the euro. Do


you think that is going to change? Is the EC began to come in now? --


ECB. The European Central Bank has been in different kind of measures


to bring Europe out of the crisis, we shouldn't underestimate this. If


you look at the results of the summit, there are three major


achievements. The first one is a long term it could lead --


commitment to sound fiscal Prom -- a long-term commitment to sound the


fiscal policies. Blows to help countries Bridge difficult periods.


-- loans. And also to support the credibility of these different


measures taking... The people, partly because of something that


the European Central Bank president said last week, have thought that


if there was this kind of commitment to these tough fiscal


rules, there would be some sort of reward from the European Central


Bank. Are you suggesting that is wrong? The solution can come only


from building new confidence in the country's policies, so the solution


can come only from the Government themselves. What the European


Central Bank has done and has done in the past and can do in the


future is first of all provide liquidity. This is the major task


of a central bank in such an end -- a situation. The ECB took a step


yesterday by deciding to provide three years liquidity and the


European Central Bank still has its of government bond purchase


programme available. The solution cannot come from the central bank


alone. That is something we have had a few times. Cherie Givet Dana,


-- Shriti Vadera, does the ECB need to do more? I don't think there is


enough there at the moment. What we wanted, and we should stop


expecting something in one day, but what we wanted was clarity on an


end to destination and a breach of liquidity for sovereign bonds to


that the destination. -- Bridge. We half got boat and we haven't got


all of it and it is over the next few months that will tell -- we


half got both. We will probably have a downgrade as Paul Mason has


said over the next few weeks, and that liquidity will be tested. Is


the ECB going to step in? And there does need to be a reward, there


needs to be a compact on both sides. They could bind the secondary


market, but at the moment, they are the only institution in the


structure that is able to act. The rest of the money isn't ready.


you say to ball boys -- Paul Mason's. That -- point, when all


other countries announced a stimulus package in 2009, that


wouldn't be possible now? You think that is right? I think it is true


that they have produced a toolkit with only one tool, austerity. It


is about cuts and deficit caps. Actually, the real problems with


the countries in real trouble right now it is the current account, they


are not competitive enough. There is nothing that shows these


countries will be able to trade their way. They cannot inflate,


they cannot depreciate, they cannot borrow cheaply, they don't get


money from the ECB. Something has got to give and it could end up


with solvency problems and really consigning Europe to 10 years of


absolutely no growth. If there is a solvency problem and nobody gives


them any funding it, we will be looking at restructure. Mohamed El-


Erian, as an Economist, you must worry about where growth is there


to come from. It is all fiscal, it is all about tightening budgets.


The ECB is saying it doesn't necessarily want to do any more. Do


you worry about that? Absolutely. It is one of the five things that I


worry about. There is a list to assess summit at the summit. One is


Debt, solvency has a numerator and denominator. The denominator is how


quickly you grow and generate income. There isn't enough to focus


on that. Second, there is no vision for what the eurozone is going to


look like in three years' time. Third, the banking system is still


Abass. We still have capital inadequacy, asset problems. 4th, we


haven't had a clear signal between liquidity problems and solvency


problems, and as long as we don't delineate clearly, there will be


question marks. And at the big bazooka, which is the ECB, it has


and cumin. I sympathise with the ECB, because they have done a lot


and have been a bridge to know where. They need to be a bridge


there somewhere, but that place is not known. It is a long list and


growth is the first item...., briefly, surely De -- surely the


ECB doesn't want to be a lender of last resort, but as the crisis


continues, it is having to do a lot of emergency support for banks. Are


you suffering from the fact that this crisis is not being resolved


and there would be enough growth? Growth comes from assessing


structural problems and of course, it is a concern. We see the growth


prospects for next year are weaker and the aim of the fiscal measures


is to limit the structural deficit, which of course takes into


account... That hurts growth. Structural reforms had growth. It


is reforming labour markets and things in the short term that


actually might slow down economies. As we have seen from various


countries, I think a number of measures have been taken in the


last few years, and if you look at Spain for instance, Spain has tried


to address its problems in the labour market. It is in a difficult


situation but it is trying to reform the labour market in the


direction where it will have more possibilities for employment. The


truck -- the same is true for other countries as well. You should take


into account the fiscal rule is addressing the structural deficit.


The structural deficit takes into account the business... We have to


leave it there. Thank you very much to all of you, of I'm Sorry, we


have to cut it off. Fog in the Channel, Continent cut


off. The old joke isn't as funny today, because it is clear where


the rest of Europe wants to go. It is Britain's future that since


clouded in doubt and that must include the future of the coalition


between Euro-sceptic Conservatives and Europhile Liberal Democrats.


Right now, Europe's top duo are apparently so fused in their common


purpose they are known as the single name Merkozy. The joke doing


the rounds at Westminster is that had David Cameron joined, it


wouldn't quite have spelt kamikaze, but politically it could have


amounted to quite the same thing. It would have been like the


Maastricht Treaty row of seven years ago, except far worse,


because he would have had to have brought a bill before parliament to


bring the treaty into effect. There would have been MN bends, with Bill


Cash and the critics who were around 20 years ago coming back for


a second bite -- amendments. There would have been a call for a


referendum, even a leadership challenge. The morning after in


Brussels was very different. Soft music, warm handshakes, and David


Cameron sticking his signature on the dotted line. It is just that


this was the paperwork for Croatia to join the EU, not the treaty that


most of Europe wanted. This does represent a change in our


relationship with Europe, but the court relationship, the single


market, trade, investment, that remains as it was and that is very


important -- core relationship. In terms of the future and referendums,


we will not be presenting a treaty to Parliament. Other countries are


going to be signing up to a treaty that has some quite invasive


aspects in terms of their sovereignty, their ability to set


their own budgets. It will be a matter for them how they deal with


their parliament. We will not take a treaty like that two hours.


ins and outs of the politics are tricky for David Cameron and are


pulling him in two different directions. Liberal Democrats think


that Britain should do whatever it takes the stage in the European


club, even if that means getting out of the coalition -- to stay.


Meanwhile, plenty of Conservative backbenchers think we should use


this as a once-in-a-lifetime opportunity to renegotiate better


terms, if not entirely out of the EU, definitely closer out than


It is nearly 20 years since John Major's Government was brought to


the very brink by splits over Europe. One of the leaders of that


rebellion was clear - yesterday's veto should only be the start.


There are many people who think perhaps we have been proved pretty


well on the nail. What I'm saying is this - that there is a necessity


to tackle the nature of the European Union as it now is, and I


have said repeatedly in a debate yesterday for weeks, if not months


and years, that we have to have a fundamental renegotiation of the


treaties in our relationship to the European Union. Paul Goodman used


to be Conservative MP and now writes for the Tory grassroots


website Conservative Home, so he's pretty well tuned in to how


Conservative MPs are thinking. There has been a tide of Euro-


scepticism flowing through the Conservative Party for the past 25


years since Thatcher's Brew speech. What this extraordinary veto has


done this amazing event, is it's given that tide another big push,


and after this, the question that a lot of Conservative backbenchers


will be asking is, well, we've always been told we've got to be in


the EU because of our national interests and because we have to be


at the heart of Europe. If we're not, we're going to be at the edge,


we have to renegotiate a completely new relationship because what's the


point of being at the edge but governed by all the rules? While


many Conservatives are clearly delighted, this is a very difficult


time for Nick Clegg, leader of the Liberal Democrats, a former MEP and


pro-European to his core, like much of his party. At the same time, of


course, though, he's in coalition with David Cameron. Any Eurosceptic


who might be rubbing their hands in glee about the outcome of the


summit last night should be careful for what they wish for because,


clearly, there is potentially an increased risk of a two-speed


Europe in which Britain's position becomes more marginalised, and in


the long run, that would be bad for growth and jobs in this country.


But other Liberal Democrats are keener to pin the blame on the


Prime Minister. I think David Cameron has let us down very, very


badly. It's not simply a matter of the written Declarations which end


up as treaties of one form or another. It's all about


relationships, and what happened at the dinner last night in Brussels


was that the 17 countries in the eurozone gathered amongst the 27 of


the European Union and said we need help. We need to give the financial


markets confidence about the euro that we're united in going forward.


We need to make arrangements as quickly as possible, and we needed


the help of everyone to do that, and David Cameron effectively said,


I'm not prepared to help or to lift a finger. In fact, he went worse


than that - he kicked them in the teeth that will not be forgotten.


Could Europe then split the coalition? After so many supposedly


impossible things have already happened, well, nothing appears


completely out of the question. David Grossman. Where does this


leave the coalition? With me is the Liberal Democrat Lord Oakshot and


the Conservative MP Bernard Jenkin. For you and other Eurosceptics,


this is brilliant news, what happened? Can I just make a


criticism, which is there is an awful tendency in the BBC to turn


this into a narrative about the coalition and about the


Conservative Party. This is actually about the substance of an


issue, and it's about the substance of an issue of which the


Eurosceptic... And how much of this programme have we spent talking


about the substance of the issue, and how much have we spent...


we had your opening report saying alas for Britain we're isolated.


This is interesting. You don't think this is significant for the


relationship within the coalition? I do think this is very significant,


and I think Matthew is going to think this is very significant. I


think everybody should regard this as significant that we are now in a


new situation, in a new relationship with our European


partners because they are going off and doing something on their own,


and we are not involved, but the foundations for that were laid at


the Maastricht Treaty, and this moment was always going to become


inevitable, and some of us have been saying that for a very long


time, and we now must face the consequences of it, and I think


David Cameron has now faced the consequences. He's confronted it at


Brussels. He said that Eurosceptics shouldn't be celebrating. Can you


think of one reason why they shouldn't? They shouldn't be


celebrating. Just doing "I told you so?" Bernard Jenkin has been a


serial rebel. He, with Iain Duncan Smith, has been leading the


opposition effectively of our membership of the European Union.


That's not true. He's now saying we told you so. The fact is this is a


very damaging day for Europe and for Britain. He says the Europeans


have gone off on their own. They haven't. Britain has cut itself off


from our main trading partners, our main allies, our main friends. It's


deeply dangerous. And millions of jobs, not just in the city, have


been put in danger. You say we have given up... What are we giving up?


A place at the table with 26 other countries. We have not given up. As


David Cameron was explaining, we're still in the 27. The treaty


structure is still answerable to the 27 structure as it was before.


What has a changed? The only thing that's changed is that the other


member states have decided to go off on their own and do something


on their own because they cannot conceive of respecting a national


interest - a relatively modest demand, I have to say. Many of us


would have liked... Excuse me. Excuse me. Are you seriously


suggesting that Angela Merkel for Germany and Nicolas Sarkozy for


France are not defending their national interests? Of course they


are. Don't be ridiculous. So they're saying - the fact is that


we - this is the end game of a desperately silly decision by David


Cameron when he was trying to buy right-wing votes in a leadership


election to lead the mainstream European grouping - he would have


been there in Marseilles with the Angela Merkel and Nicolas Sarkozy


in Spain, and he's off with the head bangers and wackos in Eastern


Europe... If - Prime Minister, would he have been at that dinner?


He wouldn't. You're talking rubbish. No, I'm not. You may not have liked


it, but Conservative Prime Ministers with a lot more


experience, frankly, than David Cameron were there in awhriens the


main players on the European right. Now they're completely isolated.


Now what really matters is that the British Prime Minister has been


doing special pleading for special interests in the City and


conciliating people like you who have never accepted the coalition


agreement. You're always asking for a referendum which isn't in the


agreement instead of putting British interests first. You think


this doesn't lead to a renegotiation between British...


Put it this way... You seem to be torn about what's happened. Why not


openly and honestly say so. I think there needs to be a renegotiation.


If we don't get that, that'll be driving us towards the exit. That's


why I want a renegotiation, because I want us to remain in the European


Union. It's not in the coalition agreement. You're trying to wreck


that agreement, which we all signed. The coalition agreement has been


overtaken by recent events. It did not. The coalition agreement didn't


envision the imminent collapse of the euro. It hasn't collapsed.


Despite any lack of help from David Cameron, it hasn't collapsed.


They're getting their act together, but without us. From now on are the


parties going to get on as badly as you two are? No. We have a deal. We


signed up to a deal on Europe which Mr Jenkin and his friends have


never accepted. They basically don't trust David Cameron. They


think he should have won. He didn't. The fact is a deal is a deal, and


all the time you're trying to undermine it, and it's deeply


damaging for Britain's position in Europe... I'm sorry. We have to


Stephanie Flanders presents analysis of the European summit in Brussels. Mark Urban and Paul Mason report on the Prime Minister's decision to stay out of a new EU economic agreement.

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