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August 4, 2021

Fiscal union treaty by March, Van Rompuy says

Barroso says UK demand put EU internal market at risk. British PM Cameron under fire in EP.

STRASBOURG – The treaty sanctioning the creation of a fiscal union of EU countries, Britain not included, will be signed by the beginning of March, according to the President of the European Council, Herman Van Rompuy. Speaking at the European Parliament, Van Rompuy said that a final decision would also be made before then on the total resources available to the EFSF, the current state-rescue fund, and the ESM, the permanent mechanism that will replace it from next year. “Early March at the latest, this fiscal compact treaty will be signed,” Mr Van Rompuy said. The ceiling for such resources is currently EUR 500 bln, AGI informs.

On the other hand the head of the European Commission has said the UK’s demand for special treatment for financial services would have risked the single market, according to BBC. Jose Manuel Barroso told the European Parliament the UK’s stance had made compromise impossible at last week’s EU summit on economic integration. The UK vetoed treaty changes for the 27-member EU, arguing it had to protect Britain’s financial services industry. But at least 23 other EU states agreed to forge ahead with deeper ties.

They envisage an intergovernmental treaty, or “compact”, on stricter fiscal rules. British Prime Minister David Cameron’s use of the UK’s veto in Brussels has strained relations between his Conservative Party and Liberal Democrat coalition allies.

In his speech to MEPs, Barroso said: “As you know, one member state was opposed to amending the Lisbon Treaty. The United Kingdom, in exchange for giving its agreement, asked for a specific protocol on financial services which, as presented, was a risk to the integrity of the internal market. This made compromise impossible. All other heads of government were left with the choice between paying this price or moving ahead without the UK’s participation and accepting an internal agreement among them.”

Barroso said the “greatest” risk of the summit, a split between the 17 euro states and the other 10, had been avoided. “This is not an agreement at 17-plus, but an agreement at 27-minus,” he said.

Tuesday’s plenary session of the European Parliament heard wide condemnation from the floor of the UK’s position within the EU. French MEP Joseph Daul, who chairs the parliament’s centre-right European People’s Party group, told Britain jokingly: “Don’t worry, we’re not coming with tanks and Kalashnikovs before Christmas.”

German MEP Martin Schulz, who leads the Social Democrat group, blamed speculators in the City of London for the financial crisis.

Guy Verhofstadt, the Belgian former prime minister and leader of the Liberal group, piled condemnation on the British prime minister’s position at the summit. “David Cameron will come to the conclusion that he has made the blunder of a lifetime,” he told MEPs.

Jan Zahradil, the Czech lea­der of the European Con­servatives and Reformists group which includes Cameron’s party, sought to defend his British ally. The British Conservatives, he argued, had been made a “scapegoat” for European divisions. “What Mr Cameron did was just a defence of his country’s national interest,” he said.

But Cameron also came under attack from a Lib Dem MEP, Sharon Bowles. The deal may have “fooled the Lib Dems in London, but it hasn’t fooled me”, she said, telling fellow MEPs she “abhorred” Cameron’s use of the veto.

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