30/Aug/2014 - Last News Update: 02:00

UK alone as EU agrees fiscal deal

Category: Business

Published: 9th Dec 2011 15:12:44

All the countries of the European Union except the UK have backed a tax and budget pact to tackle the eurozone debt crisis, say European leaders.

Hungary originally said it would also remain outside the deal but has now changed its stance.

Other countries outside the 17-member eurozone have agreed, some pending consultations with their parliaments.

UK Prime Minister David Cameron had insisted on an exemption for the UK from some financial regulations.

The UK effectively used its veto to block an attempt, led by the French and Germans, to get all 27 EU states to support changes to the union's treaties.

Instead, eurozone members and others will adopt an accord with penalties for breaking deficit rules. It will be backed by a treaty between governments, not an EU treaty.

"In fact, 26 leaders are in favour of joining this effort. They recognise the euro is a common good," said European Council President Herman Van Rompuy.

David Cameron: It is better to have eurozone countries make arrangements separately

But Mr Cameron said he had not signed up to the deal because it was not in Britain's interests.

"Those countries that sign this treaty... we wish them well because we want the eurozone to sort out its problems, to achieve that stability and growth that all of Europe - Britain included - needs," he said.

German Chancellor Angela Merkel said the UK was the only country to have expressed reservations, but that Mr Cameron had recognised that a stable euro was in Britain's interest.

Of the nine other EU countries outside the euro, Hungary, the Czech Republic and Sweden have said they must consult their parliaments. Six others - including Denmark, Poland and Latvia - have agreed to join the new deal.

EU leaders aim to have the pact - known as a "fiscal compact" - ready to take effect by March.

Its main provisions include:

The Guardian says Britain is "facing isolation in Europe" after David Cameron vetoed a revision of the Lisbon treaty.

In the Economist, the Charlemagne's notebook blog describes the agreement - and Britain's non-participation - as Europe's "great divorce".

The Financial Times says EU leaders are "struggling to cope" with what it describes as "a profound split".

The New York Times describes the agreement as "not a perfect solution," because it could be seen as institutionalizing a two-speed Europe - but it says the pact could be ratified much more quickly than a full treaty amendment.

The BBC's Europe editor Gavin Hewitt, in Brussels, says the new pact will be quicker to set up than a change to the treaty but it may prove less rigorous.

But, he says, Europe has taken a big step towards closer integration, with binding rules over tax and spending, and sanctions against countries that overspend.

Nearly 10 hours of talks could not produce an agreement involving all member states.

French President Nicolas Sarkozy said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt-out on proposed change on financial services.

"We could not accept this," he said.

IMF chief Christine Lagarde welcomed the deal as "a really good step in the right direction".

But the announcement from Brussels failed to lift the markets, which are still hoping for more intervention by the European Central Bank (ECB), and European stocks traded slightly down on Friday.

BBC News External Link Show Citation

Latest News

Harvard Citation

BBC News, 2011. UK alone as EU agrees fiscal deal [Online] (Updated 9th Dec 2011)
Available at: http://www.ukwirednews.com/news/209258/UK-alone-as-EU-agrees-fiscal-deal [Accessed 30th Aug 2014]

News In Other Categories

  • US Open: Mirjana Lucic-Baroni back in last-16 after 15 torrid years

    Mirjana Lucic-Baroni described her US Open victory over world number two Simona Halep as "the best day of my life", and with good reason.
  • Call for more data on Scottish disabled children

    A charity campaigner has called for better information on the number of Scottish children with a disability.
  • The makeover that's divided a nation

    Macedonia has embarked on a major revamp of its capital city, Skopje. But the changes have been controversial with some calling the makeover a "crime".
  • Bristol Academy extends reach overseas with first foreign students

    With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
  • Ebola: Experimental drug ZMapp is '100% effective' in animal trials

    The only clinical trial data on the experimental Ebola drug ZMapp shows it is 100% effective in monkey studies, even in later stages of the infection.
  • MSN Messenger to end after 15 years

    Microsoft's Windows Live Messenger will be switched off in China in October, marking a final end to the 15-year-old service.