Liar: Cameron Vows To Protect UK In EU Crisis Plan

Prime Minister David Cameron has insisted British interests will be paramount if the European Union treaty is changed to help resolve the eurozone crisis.

David Cameron says that saving the euro does not necessarily require a treaty change, but EU institutions needs to get behind the currency "with everything they've got".

The Prime Minister was speaking after a working lunch with President Nicolas Sarkozy in Paris to discuss proposals by France and Germany to bring Eurozone countries together in a tighter "fiscal union".

The eurozone's two biggest economies believe the single currency can only be saved if the 17 countries which use the single currency co-ordinate their fiscal policies much more closely.

German Chancellor Angela Merkel signalled in a speech to the Bundestag that she would want national governments in the new union to conform to agreed limits on spending, and any "debt sinner" could be forced to answer for their transgressions at the European Court of Justice.

There is little doubt that Germany's official line is much tougher than that of France, which sees a far greater role for the European Central Bank (ECB) in buying up sovereign debt and the possibility of issuing "elite bonds" to spread the risk across the zone's wealthiest.

However, Sky sources suggest that Germany may be softening its stance behind closed doors and that the proposed treaty change is part of a deal cooked up with the ECB allowing it to legally intervene more aggressively, using the International Monetary Fund (IMF) as cover.

So far its role has been limited to buying bonds of vulnerable countries on the secondary markets to keep yields low.

The ECB's governing council will meet on Thursday, as European leaders start arriving in Brussels for the council summit.

The suggestion is that the IMF may be used as a mechanism to siphon, or at least underwrite, extra support to troubled economies, such as Greece and Portugal.

The IMF is funded by countries including the UK and the US, so this would not be without controversy, exposing British taxpayers to debtor nations.

It is also understood that the European Commission has been modelling so called 'tight/loose' scenarios, and the impact that would have on countries, like the UK, which do not use the Euro.

Britain's influence at next week's summit will be inevitably relegated to the sidelines, as the Eurozone's powerhouses lead the debate about the currency's future, but Mr Cameron knows there could be an opportunity there.

Any attempt at a treaty change would allow him to suggest the powers he would like to return to the UK, which is red meat to those restive eurosceptic backbenchers from his own party.

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News & Politics

Tags:

• Liar
• Cameron
• David Cameron
• British interests
• European Union treaty
• EU institutions
• Nicolas Sarkozy
• Eurozone
• fiscal union
• Angela Merkel