EU summit: UK and Czechs refuse to join fiscal compact


Germany's Chancellor Angela Merkel says EU leaders have taken an "important step forward"

Twenty-five of the EU's 27 member states have agreed to join a fiscal treaty to enforce budget discipline.

The Czech Republic and the UK refused to sign up. UK Prime Minister David Cameron said his government would act if the treaty threatened UK interests.

He still has "legal concerns" about the use of EU institutions in enforcing the fiscal treaty, he said.

The Czechs cited "constitutional reasons" for their refusal, France's President Nicolas Sarkozy said.

Czech President Vaclav Klaus, a Eurosceptic, may be reluctant to sign the treaty, analysts say.

The goal is much closer co-ordination of budget policy across the EU to prevent excessive debts accumulating.

Germany - the eurozone's biggest lender and most powerful economy - was particularly keen to get a binding treaty adopted to enforce budget rules.

The treaty will empower the European Court of Justice to monitor compliance and impose fines on rule-breakers.

The treaty also spells out the enhanced role of the European Commission in scrutinising national budgets.

British PM David Cameron: "We will not be ratifying this treaty and it places no obligation on the UK"

The Czech Republic is not yet in the euro, but like the other new EU member states it is committed to joining.

European Union leaders also discussed ways to stimulate economic growth despite the stringent austerity budgets in many countries - and focused on how to reduce unemployment across the eurozone.

UK concerns

The UK and Denmark are the only states with explicit opt-outs from the euro.

Mr Cameron said "it's good that the new treaty is absolutely explicit and clear that it cannot encroach on the competences of the EU".


No-one believes that this treaty on its own will solve anything, and it could face an uncertain future. The Socialist candidate in the French presidential election Francois Hollande has promised to renegotiate it if he wins, and President Nicolas Sarkozy has now confirmed that the treaty will not be ratified in France before the election takes place.

In fact given general agreement on the need for measures to promote growth, some critics have described the fiscal treaty as little more than a distraction. But Germany has pushed hard for its implementation - partly to persuade political opinion in Berlin that there really will be strict rules in place to ensure that another debt crisis can't happen in the future. Only then will Germany consider spending more money to help other countries which are struggling with their debts now. The fear is that if Germany doesn't act, the current crisis will only get worse.

"They must not take measures that in any way undermine the EU single market," he said, adding: "we'll be watching like a hawk".

He insisted that the treaty would impose "no obligations on the UK".

Mr Cameron used his veto last month to opt out of the treaty, arguing that the UK needed to keep its authority over financial services in the City of London.

The eurozone crisis dominated Monday's summit, with debt-laden Greece still at risk of defaulting.

A general strike in Belgium, paralysing transport, reminded EU leaders of public discontent with austerity as they arrived for the summit.

The talks also concentrated on reducing unemployment, which is averaging 10% across the eurozone, though youth unemployment is often much higher.

There are fears that wide-ranging budget cuts will harm enterprise and training.

The leaders discussed measures to support small and medium-sized enterprises (SMEs), many of which complain of excessive administrative costs imposed by Brussels.

In a joint statement on economic growth they noted that cutting budget deficits was "not in itself sufficient".

"We have to modernise our economies and strengthen our competitiveness to secure sustainable growth," the statement said.

The EU will help to fund schemes to get young people into work or training in member states with the highest youth unemployment levels.

They pledged to speed up measures to develop the EU single market, including:

  • agreement on a common EU patent system by July;
  • better targeting of EU funds towards SMEs;
  • national legislation to create a functioning single market in services and energy.

The European Commission says 82bn euros (£69bn; $107bn) of EU money is available for countries to spend on projects to boost jobs and growth.


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  • rate this

    Comment number 366.

    Despite the unrelenting criticism of the European Union by the UK, the EU has left the door open should the UK change its mind. Members of the Union should play by the same rules. Financial and economic stability are at the heart of the matter. What is irksome is that the UK cannot decide whether to support the EU wholeheartedly or to oppose it tooth and nail. The British have to decide NOW!

  • rate this

    Comment number 365.

    So 25 of the Member states of the EU have signed a treaty to enforce budget discipline. If one then overspends I assume it will be fined (which they won't be able to pay?). This from an Organisation whose own Auditors have refused to sign off their accounts for 12 (or is it 13 years?). Lewis Carroll could have written the Childrens story for this one.

  • rate this

    Comment number 364.

    Well done Dave. Your finest hour to date. Keep it up.

  • rate this

    Comment number 363.

    Jeremy need to use a dictionary and check how to spell "zenophobes".....

  • rate this

    Comment number 362.

    Hey, Good news. The EU has £69Bn pounds to hand out to member countries to help stimulate employment.
    Now where did they get that from?
    Might it have been us in the first place plus a bit for paying pointless bureaucrats to have fat person lunches in their ivory towers?
    Do we really need the EU to do this? Why dont we spend our money where we want in the first place?
    UK Independence, nice idea?

  • rate this

    Comment number 361.

    Hello zenaphobes and there are a lot on these pages.
    Just looking at your comments:
    "The unelected evil Eurpean dictatorship that has set out to subvert Britain - land of the free" etc. etc. etc.
    Ah! - That would be all of the democratically elected governments of the rest of Europe, i.e. the countries which overcame their bigotry to form a union of pooled resources.

  • rate this

    Comment number 360.

    The U.K. is part of the E.U. but only ever wanted the trade and hand outs and rebates, Not law justice or the social chapter now they are full members they dont like whats happening it has cost us in jobs and migrates' and will become worst when other countrys join the E.U. The European grants have helped other countries into modern times time to quit or not? vote please!!!!!!

  • rate this

    Comment number 359.

    Calm Down everybody - Just think quietly and calmly - Work through the EU Talk, The Gobbledegook, The Complicated words etc., This is just another disguise for The EU to exert total control over all it's members !
    France and Germany seek to have domination under whichever disguise you choose !
    Restriction - Regulation - Supplication will follow !
    We Should Get Out Now while we can - BEWARE !

  • rate this

    Comment number 358.

    Isnt it time they stopped talking and did something?

  • rate this

    Comment number 357.

    He's right to reject the treaty as it doesn't go far enough. The only way for the Euro to survive going forward is to have a single monetary policy, not rules and treaties, and allow each member state to impose additional taxes on top of the European wide standards if they so wish. For this to be democratic you'd need a single elected European govt too, until this happens best to stay outside.

  • rate this

    Comment number 356.

    Motivation? - Cameron's wants to get the bankers (who caused this mess) let off the tiny percentage of EU transaction tax.
    Strategy? - to alienate the UKs biggest export market while trying to see an export led recovery.
    Nice plan (NOT)
    Will it work? - Only insofar as he will gain votes by appealing to the anti-Euro zenophobic brigade.

  • rate this

    Comment number 355.

    The E.U. was supposed to eradicate the conditions which have led to conflicts down the centuries between European nations. Now Germany has proposed appointing a Gauleiter to ensure the Greeks toe the Euro Commission line, with possibly more to come when other nations fall by the wayside. Haven't seen that for 70 odd years.

  • rate this

    Comment number 354.

    I just don't recall being consulted about this, time for ANOTHER firm letter to my MP!"

    Were you personally consulted on the changes in student fees, the NHS reforms, public pension reforms, education reforms, deficit reduction details, tax changes, intervention in Libya, policing changes etc etc. In case you were unaware, we elect MPs and a government to make decisions for us.

  • rate this

    Comment number 353.

    In ten years time the UK is not unlikely to be out of the EU.

  • rate this

    Comment number 352.

    If the EU can't even get the implementation of chicken farming standards achieved by all members on a defined time with 10 years warning, what chance have they of getting these fiscal rules imposed and implemented. As usual the UK gets criticised for questioning new proposed rules, whereas other states agree to anything then quietly ignore those that don't suit it and no-one complains.

  • rate this

    Comment number 351.

    VAT registration threshhold in the UK is £73,000; in most of the other states it is effectively zero. That means that traders can come from, for example, France and sell in the UK on a casual basis - always claiming to be under £73,000. We can't sell anything abroad without registering for VAT and tax in each country. There never has been a single market - it has always been a big lie.

  • rate this

    Comment number 350.

    I just don't recall being consulted about this, time for ANOTHER firm letter to my MP!

  • rate this

    Comment number 349.

    Well done Mr Cameron at last a PM with some backbone, the EU and the Euro are about as corrupt as it gets, I can see no benefits whatsoever from the UK being Europes bail out fund, and I see no point whatsoever in allowing a wounded German premier and an arrogant unpopular Frenchman dictate to us. You got yourselves into this mess and you're not dragging us down with you...

  • rate this

    Comment number 348.

    UK: Just leave the EU altogether already!

  • rate this

    Comment number 347.

    So 25 of the 27 states have said they will sign up. That will probably be reduced slightly when it comes to the actual signing. That will be further reduced by those unwilling, or actually unable, to stick to the terms of the agreement. How do you actually fine someone who is deep in debt? You lend them the money to pay the fine, increasing the debt. Eurofudge carried out successfully.


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