As it happened: EU summit

Key points

  • Eurozone members have agreed to a new tax and budget pact to tackle the debt crisis
  • Other EU members say they intend to sign up, although some need parliamentary approval
  • Britain has ruled out joining the new agreement because of objections to new financial regulations
  • German Chancellor, Angela Merkel, says the deal is a "tremendous step towards a stable Europe"
  • Croatia has signed an accession treaty to join the EU in 2013
  • All times GMT

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    Welcome to our live page on the pivotal European Union summit in Brussels, a meeting which is likely to determine the future of the euro. "The entire world is watching," said the head of the European Commission, Jose Manuel Barroso on Thursday. "Europe is facing an extraordinarily dangerous situation," said the French President, Nicolas Sarkozy. We will have full coverage here of all the twists and turns during the day.

    0637: Chris Morris BBC News

    in Brussels says if there is to be a new intergovernmental treaty that involves EU-wide institutions then it will still require all EU members to agree.


    The BBC's Hugh Schofield in Paris says people in France just assume that Britain will go its own way in Europe, so the British refusal to agree to a new deal has come as no surprise.


    The EU leaders held 10 hours of talks ending in the early hours of the morning. When the meeting ended, President Sarkozy held a new conference to explain that all EU members were ready to sign up to a new deal except Britain and Hungary. The Czech Republic and Sweden wanted to consult their parliaments, he said. The talks resume later on Friday.

    0654: Nick Robinson BBC Political Editor

    says the consequences of the rift in the EU could scarcely be greater. He says there is now likely to be a protracted fight over Britain's influence in the EU and David Cameron is likely to come under further pressure to hold a referendum on the issue.


    The former Swedish Prime Minister, Carl Bildt (@carlbildt), who also served as an EU envoy has tweeted: "Worried that Britain is starting to drift away from Europe in a serious way. To where? In a strong alliance with Hungary....."

    0702: Colin O'Brien, in Melbourne, Australia,

    If the UK wasn't prepared to ditch the pound it can't really be included in the proposed new Euro deal with 17 countries and if the UK weren't prepared to accept tougher budget changes the French and Germans proposed - I'm pleased they have left them out.

    0704: Roger G Lewis, in Angelholm, Sweden,

    emails: I'm glad that Britain sought concessions and is staying out of the Euro fudge. Sweden is also not in the Euro or the other Scandinavian countries and they are in better shape than the UK as they have sensible taxation policies and sorted out their banking sector's excesses and systemic weaknesses in the 1992 crisis.


    The British Foreign Secretary, William Hague, has told the BBC that Britain will not give up any more of its sovereignty and that is why it is standing aside from a new treaty. He denied that this would result in a two-speed Europe. He said key decisions affecting Britain would still be made by all 27 EU members, including Britain.

    0715: Gavin Hewitt BBC Europe editor

    says there are a lot of antagonised EU officials today because of David Cameron's rejection of a new treaty. The big argument he says was between Mr Cameron and the French President Nicolas Sarkozy over the regulation of financial services.

    Hugo, in Porto, Portugal,

    emails: I've just been to London and came back to Portugal. The differences of economy and mentality are striking. We should be thinking about being European first and then from our own country. Unfortunately we lack sense of European patriotism. The solution is to let smaller countries like mine evolve and develop. But there are still too many self interests around. If we want Europe to stand in a significant position - to be part of the global village decision making, we need to start thinking about writing our own future as a team of European countries.


    Peter Spiegel of the Financial Times newspaper in London tells the BBC many EU officials will be feeling nervous following the first day of the summit. They fear the markets will not see this as the decisive action they were looking for, he says.


    China's confidence in the EU's ability to surmount the crisis "has not changed", a foreign ministry spokesman, Hong Lei, told a daily news briefing - reported on the Reuters news agency. He said China hoped the agreement to seal a new fiscal pact would stabilise markets and boost confidence, Reuters says.


    tweets: Merkel y'day: "nations shld put aside national interest". Stupid idea: wld mean resentment + wrong decisions. EU MUST work in nat int of all

    0728: Nick Robinson BBC Political Editor

    tweets: "This has the potential to utterly alter Britain's relationship with the whole of the rest of the #EU" - @BBCNickRobinson

    0733: Nick Robinson BBC Political Editor

    adds that there will now be a series of "angry rows and legal challenges about what this new euro club within a club can and can't discuss, and whether it should be allowed to use EU resources and officials". He adds that "Many eurosceptics [in Britain] will now demand a wholesale renegotiation of our membership of the EU and a referendum on it - something which would be a coalition breaker".


    tweets: UK reality check: IF the \u20ac survives, UK will be as important as Malta (with worse weather), if it doesn't Europe will sink & the UK with it

    @FoxInClogs, in Holland,

    tweets: Good morning & goodbye to the UK. Cameron finds the banks more important than Europe but we knew that all along, really, didn't we? Euro summit as a baseball game: Cameron 'wields the veto' & strikes out. Merkozy" "You're out of here!"

    Conservative MP, Louise Mensch,

    tweets: The PM was absolutely right to refuse to allow the EU to gut Britain's financial services industry. Showing strong leadership.


    Bill Blain from the Newedge group, an asset brokerage business, tells the BBC we can expect "a lot more kicking the can down the road" from the EU. He says the lack of a clear EU-wide agreement now does not mean Spain or Greece will go bust tomorrow, but it prolongs the uncertainty.

    Sir Christopher Meyer,

    in the Huffington Post blog, argues Cameron is not isolated. He says: "There are nine other EU countries who are not members of the Eurozone. They are Cameron's natural allies, if British diplomacy can be clever enough to enlist them."


    Cameron, William Hague, and Hungary are now trending on Twitter in the UK.


    According to theDutch PM, Mark Rutte, David Cameron demanded "a whole series of dispensations" for the City of London, says the Dutch news organisation, NOS.

    @edinburghrascal, in Scotland,

    tweets: So Cameron protects those who have got us in this mess? We didn't vote to have the EU, but we didn't vote to leave it either. #No mandate?

    0804: Gavin Hewitt BBC Europe editor

    says there is now considerable antagonism towards Britain in the EU, because it used its veto in what is seen in Brussels as Europe's hour of need. Other European countries have taken a big step towards closer integration with binding rules on tax and spending, he says. The immediate test of the agreement will be whether it persuades the European Central Bank to act more aggressively in the markets, so lowering the borrowing costs of countries like Italy and Spain.


    @BBC_HaveYourSay Merkozy aims are not solutions, just pandering to domestic voters. Hard to see this pact being more effective than last


    The Former British foreign secretary, Lord Owen, told the Today programme on BBC Radio 4 that this was the first time the British government had failed to achieve British objectives within the structures of the EU. "We are still in the #EU\u2026but we're in a mess," he said. Listen to his comments here .

    Political journalist Steve Richards

    tweets: Cam on the margins clinging to the City of London, causing mayhem as the others sort out the Euro crisis: a dangerous moment..for the UK.

    0814: Nick Robinson BBC Political Editor

    describes how David Cameron is trying to keep Britain's coalition government united on the crisis during the EU summit. He says senior sources in Mr Cameron's Conservative Party told him Britain's Deputy Prime Minister, Nick Clegg - who leads the more pro-European Liberal Democrats - discussed the EU negotiations with Mr Cameron throughout last night. The sources say Mr Clegg agreed to the use of the British veto.


    The credit rating agency Moody's has downgraded France's three big banks due to their difficulty borrowing money. The agency cut Credit Agricole and BNP Paribas from Aa2 to Aa3, and Societe Generale from Aa3 to A1. Read more about it here .

    0822: Robert Peston Business editor, BBC News

    says the markets have not reacted well to the agreement outlined at the EU summit overnight. Borrowing costs for Italy have gone up sharply today and the markets still believe there is a big risk of eurozone fragmentation, he says.


    BBC Radio 4's Today tweets: #EU leaders made "nothing like enough of an effort" to meet UK's concerns in treaty negotiations, @WilliamJHague tells @BBCr4today

    Ishmail in Belgium

    emails: Britain is more and more getting isolated and indeed isolates itself from a leading role in Europe! This is dangerous because its role and weight will be minimized in future decisions.

    @lenani in Portugal

    tweets: berlusconi wasnt the problem....italy might go down next...and with 16% of the eurozone wont be pretty...


    More from the British Foreign Secretary, William Hague, speaking to BBC Radio 4: "Within the European Union there are different groups of countries that cooperate on different subjects. Some are in the Euro and some aren't. Some are in the Schengen immigration arrangements and some aren't. Some collaborate on defence and others and don't. And so we have here in the example of this treaty being agreed last night by some members of the European Union another example of that. It doesn't mean the United kingdom loses its influence over other matters."


    For expert analysis, don't miss the BBC political editor Nick Robinson's blog on why Mr Cameron's use of the veto will have far reaching implications.

    Frank Gray in London, UK

    emails: It amazes me that we are held as the "bad apple" of Europe. This crisis came about because the single currency was a flawed idea from the outset, (without centralised fiscal policy how can you have a single currency) and that is the reason UK didn't join. Now once the plot unfolds and these arguments are proven we are asked to contribute to a rescue of the EU and, by doing so cutting our own throats.

    Andrew Duff, the Lib Dem MEP for East of England, who is also president of the Union of European Federalists,

    e-mails from Brussels: Mr Cameron should be warmly congratulated on having achieved his long-term goal - a second class membership of the EU for Britain. This is like Messina in 1956: the Brits walk off the stage and let Europe unite without it - only to regret their exclusion several years later and try to re-join a federal union which will have been crafted without them. This is a good day for federalists and a disastrous day for the British. (If you're both, it's a kind of mixed day.)


    For details of what the various European leaders had to say about the talks overnight, see this page of key quotes.


    The UK is "as isolated as somebody who refused to join the Titanic just before it sailed" following treaty veto, says Terry Smith of the money brokerage firm, Tullett Prebon on BBC Radio 4.


    The foreign affairs spokesman for Britain's opposition Labour Party, Douglas Alexander, tells BBC Radio 4 he "regrets just how badly David Cameron's negotiation strategy has let Britain down" and the UK is more isolated today than at any point since it joined the EU about 35 years ago. "The outcome is not a sign of strength but a profound weakness," he says.


    BBC News website readers from around the world reading our news story have been getting in touch with their comments on the latest developments. dannypen says: "Fair play to Cameron I think. This is not in the interest of the UK. 80% of financial transactions across the EU go through the UK so why should we have to suffer and lose our competitiveness? But alexandre warns: "The UK is now really in trouble. The remainder of the EU countries will negotiate a deal to suit them, and the tiny island nation will be left out. Europe can live without the UK, the UK, however will be a fish dead in the water without the EU."

    Alastair Gloag in Sheffield, UK

    emails: Cameron is painted as the wrecker for protecting British interests. And France and Germany aren't protecting their own interests? We are rubbish at diplomacy because we always look like the proverbial baddy!

    0858: Nick Robinson BBC Political Editor

    says a spokesman for Britain's Deputy Prime Minister Nick Clegg - leader of the more pro-European party in the coalition government, the Liberal Democrats - has confirmed he was consulted by David Cameron throughout the negotiations.


    For a look back at the history of the euro and the events that have led to the current debt crisis, take a look at this timeline of key events.

    0911: Matthew Price BBC News, Brussels

    says the French and Germans are presenting the outcome of the summit so far as a success, because they have got the agreement they want on the tightening of fiscal controls in the eurozone. However, he says, it is still far from clear how the immediate debt crisis will be resolved.


    Graeme Leach, of the Institute of Directors in Britain, says David Cameron made the right decision. He tells BBC Radio 5 Live the proposed financial services tax is "absolutely last thing the UK economy needs at the present time or indeed at any time". He adds: "It has to be global to work. It will never be global and so it will never work."


    tweets: @BBC_HaveYourSay If being isolated from the EU is so bad, why is Norway and Switzerland not facing the same problems as the rest of Europe?


    Continued uncertainty over the EU treaty changes appears to be keeping investors on the sidelines. Asian stocks have fallen by more than 1% but London shares were little moved, with the FTSE 100 Index close to its opening mark - seven points higher at 5490.8. Analysts say it is clear investors are waiting for more details from the summit before deciding whether to commit to new positions.


    To read about what exactly the eurozone leaders have agreed, see this statement from the summit last night.


    Eurozone crisis: Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, says: "Investors are scrutinising details from the European summit as they continue to emerge, preferring not to enter into new positions until the fog clears."


    "What is clear is that after a long, hard and rancorous negotiation, at about 5am this morning the European Union split in a fundamental way," Charlemagne writes in the Economist.

    @Bannsiders in Northern Ireland

    tweets: @BBC_HaveYourSay this is a fantastic day for the UK, a referendum on leaving the eu next please #eurozone


    Eurozone crisis: Former British foreign secretary David Miliband says David Cameron's actions showed "weakness not strength". Writing on Twitter, he says: "UK jumped into rowing boat with Hungary next to 25 nation supertanker. That is weakness not strength."

    0936: Breaking News

    EU: Croatia signs EU accession treaty, officials say - AFP


    Today's Italian newspapers focus on Britain's role in the split at the EU summit. The leading business daily, Il Sole 24 Ore has the headline "Fiscal union only for 23 states. Cameron divides Europe into two speeds". Corriere Della Sera says "British 'no', two-speed Europe is born", a sentiment echoed in La Repubblica's headline which reads, "London's no, towards a two-speed Europe".

    Johan de Wit in Roosendaal, Netherlands

    emails: I don't understand what the UK is trying to do. What is the connection between London as a financial center and stopping the euro crisis? It seems to be two totally different subjects to me. I cannot help but think the UK has seriously shot its own foot here.


    Britain also comes in for some criticism in today's German newspapers. "Brits block big plan to save euro," says Spiegel Online. The headline in the Frankfurter Allgemeine Zeitungreads "Merkel and Sarkozy thwarted by the British", while Financial Times Deutschlandsays: "Europe goes it alone without Britain".


    French newspapers' online editions today are much more focused on the agreement that has been reached, rather than the countries that have refused to sign up. "The eurozone refounds itself with a new treaty," proclaims the business daily, Les Echos. "Agreement among 17 on eurozone," says Le Monde, while Le Figaro's headline reads: "An agreement has been reached by 23 European states."


    Does the British prime minister's decision leave his country isolated in Europe? And what are the ramifications likely to be? BBC Europe editor Gavin Hewittanalyses the situation in his latest blog post.

    1007: Breaking News

    EU: Ireland may have to hold a referendum on building a fiscal union in the eurozone, Minister for European Affairs Lucinda Creighton says - Reuters.

    Sinisa Strbac in Zagreb, Croatia

    emails: Why does Britain bother? Why not pull out and retreat to the time when Britain mattered? Europe does not need or want Britan and it was a mistake letting her join. She was, and still is, a Trojan horse.


    European leaders are due to resume their talks in Brussels shortly, to try to resolve the eurozone debt crisis. The BBC's clickable guide helps to explain what could happen next.


    The British Foreign Secretary, William Hague, explained the reasons David Cameron vetoed an EU-wide treaty change but insisted the UK would not be isolated in Europe in an interview with the BBC's Nick Robinson.

    Giuseppe Mazzoni in Milan

    tells the BBC: "I'm very happy. I think this is a real breakthrough. I'm glad we have a new treaty rather than changing the existing treaty - which would have been even more difficult to introduce, especially with Britain vetoing everything. The UK should do a lot of soul-searching and make its mind up. The danger is that the UK will split and Scotland will join the inner core of the EU."


    How are financial firms coping with the uncertainty? "It's getting to the stage where we all just want to go on holiday for Christmas," financial broker Louise Cooper tells BBC World Service.


    Despite the continuing crisis at the heart of Europe, Croatia has become the latest country to sign a treaty to join the EU. The accession agreement was signed by Prime Minister Jadranka Kosor and President Ivo Josipovic.

    Croatia's President, Ivo Josipovic, and Prime Minister, Jadranka Kosor, sign the country's EU accession treaty

    "This is still an extraordinarily urgent crisis which has still not been fixed," says Economist journalist David Rennie in a BBC World Service interview.

    Paul Fischer in Pajala, Sweden

    emails: Cameron wants to safeguard Britain's interests. I bet all the other leaders want to safeguard their countries' interests. Unfortunately, if they all hold out for something in their countries' interests there won't be an agreement. Whatever they decide is bound to be a big pill to swallow for everyone.


    UK Deputy Prime Minister Nick Clegg says in a statement that the UK's demands for safeguards were "modest and reasonable" and that he regretted it had proved impossible for agreement to be reached among all 27 members. He added: "I have said for months that it would be best to avoid arcane debates about treaty change altogether and if we had to proceed down that road, it would be best to do so in a way that did not create divisions in Europe."


    "Britain could end up as one country outside a club of 26," Economist columnist David Rennie tells World Update. "I think that's a catastrophe."

    Alan Howells, in Fishguard, Wales,

    emails: Britain has achieved nothing from the EU other than employ an army of bureaucrats to run some of the crazy legislation that comes out of Europe.


    The debate about the eurozone also continues to run on the BBC News Facebook page. Janet Shaw posts: "Fantastic news, I already have more respect for Mr Cameron. As someone who has worked in the financial sector for years, this is the best news that the City of London could possibly get", but Giorgio Occhioni writes: "I think the British comments that accuse the euro tend to forget that many British banks were saved with our money in 2009... Britain is not outside the crisis and has his own big issues to solve, don't put your heads in the sand!"

    Robert Peston Business editor, BBC News

    tweets has European Union summit set new dampness record for squibs? Are eurozone leaders capable of pre-empting bank failure?


    Polish Prime Minister Donald Tusk has told domestic media the agreement may not go far enough: "These steps should be most ambitious to convince the financial markets. The point is to make the world believe that the eurozone is getting better. And I am not sure that we managed to achieve this goal," he said.

    Gerry, in Dublin,

    emails: The euro is no longer the issue, but the stability of the EU itself.


    What will the deal reached last night mean for the future of the euro and the working of the EU? BBC News Online has this Q&A guide.


    tweets: @BBC_HaveYourSay How can Eurozone refer budgets to the Commission? The Commission is an EU institution not a Eurozone one. #Eurozone


    BBC News Online now has more details on the news that Croatia has signed a treaty paving the way for it to join the EU in 2013.

    Sunil Chadda in London, UK

    emails: The biggest loser is democracy. There has been no mention of the people of the EU having any say in this whatsoever. The EU and Euro are going to collapse and I want my vote via a UK referendum. I do not want to be part of this.


    BBC Business have put together this interactive graphic looking at eight possible outcomes for the eurozone crisis.


    Sources at the European Central Bank (ECB) tell Reuters the deal reached last night was broadly in line with what the bank's governing council expected and that it would maintain its recent level of buying eurozone sovereign bonds - not the "big bazooka" some politicians and market figures have been pushing for.

    James Georgeson from Port St Mary, Isle of Man

    emails: Why is Britain getting all the bad press? If any countries such as Germany or Croatia had felt it was not in their nation's interest then they would do the same as the PM.


    Senior Liberal Democrat Lord Oakeshott accuses the British prime minister of undermining his country's influence in Europe and putting the interests of the City of London above the wider economy. "It is a black day for Britain and Europe. We are now in the waiting room while critical decisions are being taken," he says.


    tweets: "I had a discussion earlier with two Jesus believers. The question "what would Jesus do about the current Eurozone crisis?" stumped them." You can voice your thoughts on his question on this rather timely BBC Magazine feature on the rise of the slogan.


    The Danish government is still undecided as to whether to join the planned treaty with eurozone countries, Danish newspaper Politken reports. It quotes Danish PM Helle Thorning-Schmidt as saying: "What we have said is that we will be coming to the meeting today, which we will do. But obviously, Denmark has a euro opt-out. We cannot become part of anything until we have discussed the issue with parliament."


    Hungary's Europe minister has told the BBC that the Hungarian government is willing to sign up to the inter-governmental treaty agreed by eurozone countries. Eniko Gyori denied that Hungary had refused to sign up to it, as French President Nicolas Sarkozy had stated this morning. She said the UK is the only country that ruled out signing up to the agreement.


    tweets: @BBC_HaveYourSay UK! We love you, but the EU is like marriage - either fully commit, in good or bad, or get a divorce.

    1200: Poul Bavngaard, in Odense, Denmark

    emails: Danes can again thank the UK to stand firm and save the countries outside the euro from being engulfed by an unwanted inclusion. While Germany and France ruthlessly presses the small euro countries into an integration that never was meant with the EU, the major part of the Danes, who are deeply skeptical of the development, again appreciate the British for having rescued us.


    The comments on our news story about UK Prime Minister David Cameron's veto continue to flood in. Worcester Man congratulates French President Nicholas Sarkozy and German Chancellor Angela Merkel, saying: "In 20 years' time the UK will be knocking on your door begging to be let in on your terms". But georgethorburn says this is now "the opportunity to rebuild Britain".

    Alan Walker, in High Wycombe, UK

    emails: The UK was basically looking for for some safeguards against one of its most important industries - the financial sector. The imposition of the transaction tax would have seen the UK making, by far, the biggest, and most unacceptable, contribution into Europe and would have had implications of financial institutions relocating to other areas around the world, where the burden was less.


    A revised statement from heads of state at the summit suggests that only the United Kingdom is definitely staying out of the process of negotiating a new treaty, saying all other non-eurozone countries have "indicated the possibility to take part in this process after consulting their parliaments where appropriate".

    Hans-Werner Wabnitz from St Jean de Vedas, France

    emails: Treaties are just paper. The ECB should do what it takes for the euro to survive, and not worry about legalities; this is a disaster scenario... It is not the paper word that matters, but the will to enforce a rule.

    Chris Plumb in Lagos, Algarve, Portugal

    emails: So Germany has just won the economic war, and the others have surrendered their ability to act as individual countries. That means that the periphery of Europe will have to sustain many many years of austerity to at least get their budgets anywhere near the new limits.


    There have been mixed signals on how the markets are reacting to the morning's news - the AFP news agency reports that crude oil prices have dipped as a result of confusion at the summit. "The market was very nervous before the summit and fears have now grown as a result of the failed talks," said Rebecca Seabury, an energy analyst at British consultancy Inenco.

    Paul Norman in Weymouth, UK

    emails: To all the bemused Europeans who are scratching their heads and saying "What is Britain doing"... join the club. Most of us have long since given up even beginning to try and work out what our politicians are up to! Most of us would like to be 'outside' of our three major parties in the same way our countries are now, possibly, becoming more isolated from our European neighbours.


    The Labour Party has been sharply critical of British Prime Minister David Cameron's actions at the summit, telling BBC Radio 5 Live that he should have sought out Sweden, Denmark and Poland as allies. "All Cameron has done is sideline the UK rather than really affect the deal. He's left us isolated and we now won't be in the room when important decisions are made."

    Velo Mitrovich in London, UK

    emails: When will the UK wake up to the fact that, while Europe is less than 20 miles away, it is not a European country. The economic treaty which would make the most sense for Britain to join is the North American Free Trade Agreement. Canada, the USA and Britain truly have a special relationship which the UK will never be able to have with any European country.


    Sweden's Dagens Nyheter reports that the Swedish EU affairs committee has given its approval to Sweden's participation in the rescue packages. "We are not saying no," committee member Marie Granlund told the paper.


    Hungary has clarified its position on the deal reached last night, telling the BBC that it will consult its parliament over the proposed fiscal rule changes the eurozone expects to bring in. But it says it has not rejected the proposals as Britain has.

    Chris Morris BBC News

    says there was no significant support from anyone at the EU summit for the British position. Read his latest analysis on why the euro deal means less sovereignty for those signing up.


    Elmar Brok, a German MEP from Chancellor Merkel's CDU party, tells the BBC: "The only problem is now that Britain is isolated and marginalised. And that's a pity because all the rules which were set up in the joint treaty would have had no impact on Britain because it's only for the Eurozone countries. So I do not understand the British position. If they do it for popular votes but losing influence then it's up to Britain to do so."


    There has been much speculation over whether non-eurozone countries will join the bloc negotiating the new treaty. Jaroslav Kurfurst from the Czech ministry of foreign affairs told BBC Radio 4's World At One that the Czech Republic will consider joining but that his country's red lines would be "the coherence of the internal market and the EU as a whole," adding that the Czech Republic still intended to join the euro at some point in the future.


    The President of the European Council, Herman Van Rompuy, has told a news conference that the changes to the EU will take place in two steps. Firstly, he said, there would be rapid confirmation from participating states as to whether they wish to be included in the new "fiscal compact treaty". Then, following further negotiations, the treaty will be signed in early March, possibly even sooner. He defines the fiscal compact as "about more fiscal discipline, more automatic sanctions, stricter surveillance".


    "We chose to pick up the ball and leave the pitch before the game started", according to Lord Kerr, Britain's former ambassador to the European Union under Margaret Thatcher and then John Major. He told the BBC that he found it "odd" that Prime Minister David Cameron had chosen not to negotiate on the new treaty, saying it is "conceivable that the management of the Conservative party was a factor in his thinking".


    The German Chancellor, Angela Merkel, has told a news conference that Europe's economic union will push forward political union.


    tweets: @BBC_HaveYourSay Cameron made a BIG mistake. It's better to be on the inside and have some control over what's being decided.

    Jonathan Frewen in Verbier, Switzerland

    emails: No amount of treaties and penalties can alter the debt situation: either the ECB must print money or the eurozone must borrow money: neither option has been discussed.

    Michael Gregory from Oxford, UK

    emails: This is a sad day for Britain. Cameron has protected our shameful financial services industry (that has mis-sold pensions, mortgages, investments and protection to millions of UK citizens) when he should have been looking at the bigger picture of the European economy which has invested heavily in the UK (eg BMW, Airbus, Siemens etc) and trying to resolve the euro crisis. Shameful middle England attitude.


    An EU decision on whether to grant Serbia candidate status will be taken by foreign ministers in February, the European Council President, Herman Van Rompuy, has said. He praised the "bold steps" taken by Serbia to bring to justice alleged war criminals.


    Standing alone: David Cameron shares a joke with French President Nicolas Sarkozy as European Council President Herman Vam Rompuy looks on, during a photo session with EU leaders.

    British Prime Minister David Cameron, left, touches the arm of French President Nicolas Sarkozy, as they speak with European Council President Herman Van Rompuy during a group photo
    Louwieke DeVos, in Amsterdam

    emails: I am not surprised at Britain's decision to not sign over any control over her finances in an effort to save a currency she does not use. It should only apply to the 17 eurozone countries. I am surprised though that six to eight other countries not using the euro would sign up.


    An editorial in the French newspaper, Le Monde, is not surprised by Britain's position: "Let's be fair. The British have nothing to do with the euro crisis. They are not responsible for the inability of the eurozone leaders to resolve their sovereign debt problems. It makes sense that the British resist a move towards greater economic and budgetary integration. They don't believe in it. They do not believe in the idea of the European Union. Britain, which joined the then European Economic Community in 1973, is interested just in one thing: the single market. They [the British] are indifferent about the rest of the European project, when they are not hostile to it."

    Rob Schwarzenberg in Munich, Germany

    emails: I am sick and tired of the UK. You guys only care about yourself and whinge about Germany all the time... where would Europe be without the German taxpayers? My message to the Brits is: European Union... love it or leave it.

    Faisal Islam, Economics Editor, C4 News

    tweets: It's very very handy for France and Germany that there unlikely now to be a referendum in Ireland and Denmark. And to get to blame Britain.


    The German Chancellor, Angela Merkel, has expressed regret that Britain will not take part in any new agreement. "Everybody knew that we were talking about something very important, very important decisions," she said. "We regretted that Great Britain is not able to go along the same path but David Cameron reiterated that of course he has an interest in a successful Europe."


    How will the euro crisis end? Here are some possible scenarios mapped out in an interactive feature on the BBC News website.


    The majority of BBC News website readers in the UK who have been getting in touch with us today believe David Cameron made the right decision - here is a selection of your views

    Patrick Kelly from Drogheda, Ireland

    emails: Does anyone not see anything wrong with Germany and France deciding what the rest of Europe has to do? Europe is getting less and less democratic. I am Irish and I no longer care if the euro survives. It was bad for my country and still is. It is now been used as a tool to create a federal Europe controlled by Franco German interests. What about my country's interests?


    More from the news conference given by the German Chancellor, Angela Merkel, The agreement made at the summit was "a tremendous step towards a stable Europe," she said.

    Alan Beattie, World Trade Editor, Financial Times

    tweets: UK govt: we don't need EU to impose bonkers austerity on us - we have homegrown bonkers British austerity of our own! [wipes away tear].


    British political reaction has been mixed. Conservative MP Stewart Jackson has criticised critics within his party's coalition government partners, the Liberal Democrats, following the UK prime minister's decision to effectively veto an EU-wide treaty change. Speaking on BBC Radio 4's The World at One, he called for "a degree of humility from the Liberal Democrats". He said: "They have got no credibility on this issue. They were champions of the euro - a disastrous error of judgment."


    Ed Balls, of Britain's opposition Labour party, said Mr Cameron had found himself "completely isolated". "Rather than glorying in isolation, our prime minister should have been building alliances to get political backing for the European Central Bank to act as lender of last resort, which is urgent and imperative to restore market confidence," he said.

    1410: Matthew Price BBC News, Brussels

    says all the EU's plans are predicated on economic growth leading the eurozone out of recession and the debt crisis. There is no sign yet of that growth, he says.

    Denis MacShane, Labour MP and former Europe Minister

    tweets: Die Welt publishes satellite shot of Europe. For some reason they choose one in which cloud covers Britain


    BBC political correspondent Iain Watson says Mr Cameron's decision is likely to boost his standing within his Conservative party.

    Cesare Capitani in Rome, Italy

    emails: Europe will always make it, even with the UK's veto. It has been proven in the past. In this case it will have to tax those that benefit from the speculation harming its currency. Financial transactions, and those who profit from them, will have therefore to be taxed, whether the UK is willing or unwilling.


    Confused by the goings-on in Brussels? Our guide to the stance taken by the 27 members of the EU over the Euro should provide some clarity.


    Ed Miliband, leader of Britain's opposition Labour party, says David Cameron "mishandled these negotiations spectacularly".

    Ed Miliband
    Sergio Arizona in Belgrade, Serbia

    emails: Britain should wake up and see itself as the part of Europe. Even my fellow Serbians are coming to that realisation despite our euro-scepticism. This agreement is something that was inevitable and it is strange that the EU has waited for so long.

    William Middendorf in Berlin, Germany

    emails: The summit will surely resolve the euro-crisis. There is no EU crisis apart from Britain being foolish and not looking towards the future. The euro can easily live without Britain, but can Britain live without the eurozone?


    Writing on the Guardian's website, David Marsh, author of The Euro - The Battle for the New Global Currency, argues that the eurozone crisis endgame is still some way off. Likening the bid for European fiscal union to a "multi-dimensional game of chess", he predicts efforts to move forward with the Euro will be "long, draining and immensely complex".


    The German news magazine Der Spiegel thinks the deal was only a partial victory for Merkel, and that the exclusion of Britain poses serious risks. It says: "26 against one - that sounded quite a clear win. And yet, it is a high price to pay for Merkel."


    Former European Commission president Romano Prodi tells BBC World Service the "problem" of Britain has become a "yes or no" issue. "We need European countries to take a step ahead and I don't think the United Kingdom is in a position to answer yes", he says.

    Alberto Nardelli, co-founder of @tweetminster

    tweets: It's slightly ironic that the EU disagreement is over the regulation of the financial industry, which is the heart of the problem. Said that, Cameron didn't really have a choice - the proposed changes would trigger a referendum, which he clearly doesn't want.


    Romano Prodi, who was twice Prime Minister of Italy, tells Newshour "We arrived at the strict problem of sovereignty-sharing...and Cameron, he couldn't escape, he was for the first time in front of a yes or no".

    1456: Breaking News

    "I think I did the right thing for Britain," David Cameron tells the BBC's Nick Robinson. He says it would not have been in Britain's interests to sign up to a fiscal compact. "I absolutely did what I said I was going to do," Mr Cameron says. "I think it is right for Britain to ask which bits of Europe most benefit us as a nation."


    David Cameron says he is not frightened that Britain may sometimes not be included in certain European situations. "I don't think it's a bad thing that we are not part of that treaty," he said. He said his stance is squarely in Britain's best interests.

    David Cameron

    Meanwhile, on the ground in Spain, the fight against spending cuts goes on, as a small protest hints at the difficulties ahead for European nations trying to slash outgoings.

    a protest against spending cuts in Catalonia"s public healthcare system, in Badalona, near Barcelona city, Spain

    Asked by BBC World Service if Britain would lose power by taking the position it has, former Italian PM Romano Prodi replies: "Of course. you've gained freedom but you've lost power!"


    Returning to the eurozone debate taking place simultaneously on the BBC News Facebook page, Tom Carter says: "the UK's position is as wrong as Germany's," but Gary Herring is not surprised by the current argument and warns, "monetary union was never going to work without fiscal union".


    Former Italian PM Romano Prodi tells Newshour: "Europe will become more and more two-speed or many speed, or a mosaic of different clubs. Any time you are out of the clubs that comprise the new Europe you lose power",


    Serbian President Boris Tadic says his country will not give up after the EU delays a decision on its candidate status until February. "We belong to Europe," he says.

    David Purbrick in Vosselaar, Belgium

    emails: As someone with both British and Belgian nationality, I can't help thinking that Cameron's self-exclusion from economic decision-making (and probably from a lot more) in the EU is to the benefit of the EU. It reduces the ability of successive British governments, most of whom have been at the very least least mildly hostile to the European idea, to sabotage progress towards a united Europe.

    Jim Christie in Caen, France

    emails: Just read Mr Cameron's comments. Couldn't sign up to fiscal union and only wants bits that he/Britain wants. Or to put in another way, the London financial markets (ie, the people that run Britain ) didn't want any rule change that would curtail their huge profits. Not in Britain's interest - read "not in Cameron's interest" in case his back benchers had a collective nose bleed.


    Sir Menzies Campbell, former leader of Mr Cameron's coalition government partners the Liberal Democrats, backs the British prime minister. He says the course of action taken by Mr Cameron would not have been necessary if other European leaders had been "more accommodating".


    US stocks have opened higher in the wake of the eurozone's agreement on a new fiscal deal. After the first half hour of trading, the Dow Jones Industrial Average was up 113.30 points (0.94%) at 12,111.00, while the broader S&P 500 rose 11.87 (0.96%) to 1,246.22.

    David Kendrick in Carlisle, UK

    emails: David Cameron was right to use his veto. If the other EU members cannot make a concession to Britain's need to protect activities in the city of London which generates so much of the UK's revenue, then Britain is better off out of the deal. In any case it is the euro countries that have created their own crisis - not the UK - and they should deal with it.


    A photographer spots an opportunity to make a point, as a woman walks past a vacant discount shop in Buncrana, County Donegal.

    A woman walks past a vacant discount shop in the village of Buncrana in County Donegal

    tweets: @BBC_HaveYourSay PM Cameron will be proved correct when EU citizens realise they are no longer governed by the people they elect.


    The Daily Mail newspaper focuses on the moment it refers to as "le snub", when, in its words, Nicolas Sarkozy "dodged" a handshake from David Cameron with a "swift body swerve".

    Nicolas Sarkozy and David Cameron
    Martin O'Rourke in Roquebrun, France

    emails: The creation of the euro was a political move to calm French fears about a re-united Germany. Little thought was given to the financial and economic consequences. We now have an economic/financial fix to suit the Franco/German interest. It is essentially undemocratic, almost Napoleonic, in its disregard for the rights of individual nations.


    Writing on the BBC World Service Facebook page, Brian Duval says: "Here in the US we had to go through a civil war about the issue of sovereignty, I guess we shall see how it ends up for you folks". Meanwhile, Heinrich Wilhelm Seekamp says simply: "Europeans! Let's move forward together- but without Britain!"


    A bit of reading for a quiet moment: This is the seven-page statement by the euro-area heads of state or government setting out the planned changes to the way the eurozone is run.


    Former British finance minister Lord Lamont says Mr Cameron is "absolutely right". He argues that the situation the UK prime minister was in meant "he had no alternative". Lord Lamont, who as finance minister in the early 1990s was advised by Mr Cameron, adds that he doesn't believe the consequences for Britain will be damaging.


    The Associated Press's latest take, in video, on a dramatic day in Brussels. Key line: "The landscape is shifting for European leaders inside and outside the eurozone."


    Writing in the Daily Beast, financial blogger Felix Salmon concludes that Europe's leaders have set a course that leads directly to a gruesome global recession.

    Carl Douglas from Chertsey, UK

    emails: I run a small, exporting, manufacturing business. I'm appalled by what Cameron has done. His grandstanding has wrecked relations with our biggest trading partners.


    Former Belgian prime minister Guy Verhofstadt, who is currently an MEP, tells the BBC that Britain's David Cameron made a "tactical and at the same time a strategic mistake" in putting Britain outside the new European deal.

    Guy Verhofstadt
    Andrew Rogers in Guildford, UK

    emails: I'm amazed by the differences of opinion being expressed today. What it says to me is that nobody with any degree of confidence can tell what is going to happen. I don't see how these changes will stop people from trading with us, if it made sense before, it makes sense now. Its going to be an interesting few hours, days and months as this draws out.


    Latest from the Italian markets: Stocks have jumped more than 3% in trading towards the end of Friday's session. Shares in Italy's biggest bank, UniCredit, led the rally.


    The New York Times says Prime Minister David Cameron's "fateful decision to veto the idea of renegotiating the European Union treaty on Friday has left Britain as isolated as it has ever been in postwar Europe and effectively left out of future European decisions".

    1640: Norman Smith Chief political correspondent, BBC News Channel

    says: "We really are, at the moment, in a position we have never been in before. John Major never walked out of the negotiating room. Margaret Thatcher - although she pushed very, very hard and metaphorically swung the old handbag - never walked out either. David Cameron has, and that's a first. It's the first time we have been on our own, so it's an almighty big call by him and we genuinely don't know how it's going to play out."

    Paul Caruana in Malta

    emails: It had to happen, sooner or later! Is this the beginning of the end for the ever reluctant EU membership of the UK?


    European stock markets have closed higher on Friday: London's FTSE-100 rose 0.83% to close at 5,529.21 points. Meanwhile, in Paris, the CAC-40 jumped 2.48% to 3,172.35 points and, in Frankfurt, the DAX-30 added 1.91% percent to 5,986.71 points.


    This is interesting: According to news agency AFP, the top US military officer General Martin Dempsey says he is "extraordinarily concerned" about the potential for civil unrest and the breakup of the European Union. Gen Dempsey, chairman of the Joint Chiefs of Staff, says: "... in some ways we're exposed literally to contracts but also (we are concerned) because of the potential of civil unrest and break-up of the union that has been forged over there."


    More on US General Martin Dempsey's concerns over the potential for "civil unrest" in the eurozone. He has been speaking today at a conference in Washington examining "security and partnership in an age of austerity". The full video of the speech is available on C-Span.

    General Martin Dempsey
    1708: Norman Smith Chief political correspondent, BBC News Channel

    says: "I rather suspect that once you start getting further down amongst core Liberal Democrat activists, they will find it hard to reconcile their instinctive pro-European views with the jubilation on the side of many Tory sceptics. It seems to me a curious mismatch to expect Liberal Democrats who are, and have historically been, very, very committed to the European project to be sitting down calmly with Euro sceptics who believe their moment has come."


    Serbia's European Integration minister Bozidar Djelic tenders his resignation after the EU delayed a decision on whether to grant his country candidate status, according to AFP.

    Ben Chu, Economics Editor of The Independent

    tweets: Sarkozy's technique is to scupper what he doesn't really want to do - transaction tax, new treaty - and then pin blame on UK obstruction.


    The British prime minister was given a "a tongue-lashing from President Sarkozy" in last night\u2019s European Council session, according to Channel 4 News political editor Gary Gibbon.

    Jon Williams, BBC foreign editor,

    tweets: Ouch. Former Commission President Romano Prodi damns UK & David Cameron with faint praise over #Eurocrisis: "Gained freedom but lost power".


    British Deputy Prime Minister Nick Clegg warns Euro sceptics to be careful what they wish for because, he feels, there's now a heightened risk of a "two-speed Europe".

    UK Deputy Prime Minister Nick Clegg
    Stephen Lovelock from Hampshire, UK

    writes: No 'silver bullet' here as far as I can see. The lack of total unanimity will continue to breed nervousness in currency, debt and equity sectors until tangible results start to feed through in the shape of improved costs of borrowing for the shakier EU members. The real short-term issue is still whether speculators will be tempted to mount an attack.


    The New Statesman's chief political commentator, Rafael Behr, considers what might happen next. He writes that there will now be "a lot of wrangling over what competences this new inner European core has to enact economic reforms that affect the outer tier". Outlining one possible scenario, he goes on: "If it becomes clear that smaller states have signed up for something that gives Germany and France all of the power with no economic security in return there is bound to be a significant nationalist backlash in many countries. The whole thing could unravel, in which case the hardline British eurosceptics' ambition of getting out altogether would be realised even sooner."


    Writing in the Spectator magazine, Alex Massie's take on David Cameron's stance is that "the price of a short-term tactical success may be a longer-term strategic defeat". He goes on: "With Britain out of the picture - on many issues and, I fancy, more than we presently imagine - France is stronger and Germany, whose views are often closer to the British position than is sometimes thought, has lost a counterweight to French protectionism."

    Simon Nixon, European editor of WSJ's Heard on the Street column

    tweets: How long will Cameron post-summit boost last? Could be huge backlash when folk realize he put political advantage over national interest.

    Fraser Nelson, Editor of The Spectator

    tweets: Puzzle: why didn't Sarko grant Cameron the trivial concession he sought on the City? Is the UK being not-so-softly booted out?


    Simon Miller, editor of Financial Risks Today, writes: "The 'historic' agreement between the eurozone and europlus countries may have pleased Sarkozy, but with no real action plan announced, Britain is better off not putting its keys in the fruit bowl."

    Stef from Turin, Italy

    writes: Globalisation is unstoppable. Europe is losing its leadership. A divided Europe will lose a lot faster. The British must decide quickly. If you stay with the EU you can have a voice, if you are with the US then you will be driven like sheep. There is no nation that can survive alone.

    1810: Gavin Hewitt BBC Europe editor

    The arguments are not yet over. Even though there will now be an inter-governmental treaty the Germans want to see European institutions enforcing the new rules. If EU officials are in the room, the British will insist on being involved. This will be a recipe for further tension. The European people will be in a closer Europe that they never voted for, but one of the EU founders, Jean Monnet said Europe was forged in a crisis, it has been proved so yet again.

    Yvan Duvant from Olargues, France

    writes: What I understand as a French person and as a European is that the UK is slowing down the EU integration, and they have always done that. So what's the point of keeping this country in the EU? The British people should put pressure on their government to quit. Maybe The British would do better without the EU. Europe will definitely do better without the UK.

    1816: Nick Robinson BBC Political Editor

    says a senior cabinet minister has just told him: "I fear we may have sacrificed our place at the European table in order to satisfy Conservative eurosceptics."

    Matt Frei, Channel 4 News Washington correspondent,

    tweets: UK may have opted for "glorious" isolation. But when it comes to Euro crisis we are still all joined at the hip.

    Douglas Alexander MP, shadow foreign secretary

    tweets: Britain's been left isolated by Cameron's shambolic negotiation strategy-where were Poles, Danes, Dutch, Swedes? A bad outcome for Britain.

    1839: Robert Peston Business editor, BBC News

    Few believe what has been achieved is a sustainable, lasting solution. That is clear from the volatility on the yield on Spanish or Italian government debt, or the interest rate that they have to pay to borrow. The fundamental concerns are that new mechanisms for preventing excessive deficits are both cumbersome and fail to get to grips with the basic causes of the current crisis. Also the resources of the new bailout funds may seem substantial, at 500bn euros, but they would only be enough to prop up Italy for about 14 months if the worst came to the worst. A permanent solution probably requires much greater commitments - from France to surrender its budget-making independence and from Germany to hand over much more of its taxpayers' money.

    Tom Johnston from Stockholm, Sweden

    writes: To everyone attacking Britain for not playing along in this last-minute and panic-based treaty, you need to view he decision through the prism of finance. David Cameron has done the right thing in protecting Britain's right to govern its own key and arguably lone source of economic activity. Whereas Britain has been too reserved in the past when embracing the benefits of the EU, in this situation, Cameron has made the right call.


    French central bank chief Christian Noyer says the situation in the eurozone does not require a greater intervention by the European Central Bank. "There is no need for something more massive," said Mr Noyer, who also sits on the ECB's governing council, according to remarks carried by news agency AFP.


    The White House hails "signs of progress" at the European summit in Brussels.


    The full quote from White House spokesman Jay Carney, the first US reaction to the developments, according to AFP: "There has been some progress and that's a good thing."


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