Prime minister to tell Angela Merkel and François Hollande he wants cast-iron legal protections for UK financial sector
David Cameron is to use separate meetings over the next month with Angela Merkel and François Hollande to demand cast-iron legal protections for the City of London as part of reforms to prevent the UK leaving the EU.
The prime minister will tell the French president and the German chancellor, who are due to visit Britain, that the Lisbon treaty will have to be changed to prevent a "caucus" of eurozone members imposing financial services legislation on Britain.
George Osborne underlined Britain's determination to seek wide-ranging reforms when he warned that a failure to change the rules would prompt Britain to leave on the grounds that it would face a choice between exit or euro membership.
The chancellor told a conference organised by the Open Europe thinktank: "I believe it is in no one's interests for Britain to come to face a choice between joining the euro or leaving the EU. We don't want join the euro."
But Britain's isolation within the EU was highlighted on Wednesday when José Manuel Barroso, the president of the European commission, spoke out against chauvinism after the principle of the freedom of movement was questioned.
Barroso did not name any countries but it is understood he had Britain in mind after Theresa May leaked details from a draft report which raised the prospect of imposing a 75,000 cap on EU migration.
Barroso told the European parliament in Strasbourg: "Let us not give in to scaremongering and obfuscation. Let us, together, preserve a precious good for the sake of all of us as it's good for Europe's competitiveness, it's good for Europe's markets, it's good for European citizens, it's good for all of us that enjoy freedom in Europe and have an open idea of Europe and not a narrow, chauvinistic idea of the protection of the different countries."
The prime minister is expected to focus on the need for major EU structural reforms to protect the City of London when he hosts Hollande at an Anglo-French summit later this month and when he hosts Merkel and her husband for an informal weekend.
The chancellor outlined Britain's concerns when he said that from 2016 the euro group would have enough votes under the Lisbon treaty to pass financial services legislation that would apply across the whole EU, including the 10 member states outside the single currency.
Warning that the euro group had already started to discuss EU directives in private, the chancellor said: "If we cannot protect the collective interests of non-eurozone member states then they will have to choose between joining the euro, which the UK will not do, or leaving the EU.
"Europe urgently needs economic reform. Eurozone integration is necessary for the euro to survive, but proper legal protection for the rights of non-euro members is absolutely necessary to preserve the single market and make it possible for Britain to remain in the EU."
The Treasury is expected to examine a proposal by Andrea Leadsom, a member of the prime minister's policy board, who told the Guardian in 2012 that Britain should be given an effective veto over financial services legislation.
Leadsom, who introduced Osborne at the Open Europe conference, said Britain should be able to formalise the "Luxembourg compromise", which allows a member state to call a halt to votes held under the qualified majority voting system if a vital national interest is at stake.
Leadsom believes Britain could argue this would apply in this case on the grounds that 60% of the EU's financial services industry is based in the UK.
Osborne went further in his speech and said EU member states committed to a liberal economic approach should be free to press ahead with greater co-operation just as those with a different approach were seeking to introduce a financial transaction tax.
He said: "If enhanced co-operation can be used by others to create expensive, job-destroying ideas like a financial transaction tax, why don't we think about using it for job-creating measures that others oppose?"
Osborne depicted his approach as a middle course as he sought to draw a likeness between hardline sceptics who want to leave the EU and pro-Europeans who supported British membership of the euro in the late 1990s.
The chancellor said: "The one thing that unites those who urged Britain to join the euro and those who advocate leaving the EU is their shared conviction that any change is impossible and that there is no other way.
"There is another way. It is time to change the EU and to change Britain's relationship with it and then to place the decision in the hands of the British people."
The Tory leadership is trying to regain the initiative on Europe after 95 MPs signed a letter calling for parliament to be given a veto over all EU laws.
Ministers have said the proposal outlined by the backbencher Bernard Jenkin is unrealistic because it would dismantle one of Margaret Thatcher's main European legacies – denying member states a national veto in deciding the rules of the single market to prevent the likes of France from imposing protectionist measures.
While Osborne believes the rules of the single market need to be updated to protect the interests of non-eurozone member states, the government is dismissive of the Jenkin letter on the grounds that it is in effect designed to take Britain out of the EU.
Osborne made clear he had no time for what Downing Street regards as defeatist approaches on both extremes of the argument.
He said: "Strong feeling must never be allowed to cloud clear judgment about where this country's real long-term economic interests lie. It is clear what the British people want.
"They refuse to accept that we just have to take the EU as it is, that one size must fit all, that change is impossible, that reform is doomed.
"Nor do they accept that the only course open to us is to pack up and leave, to abandon the single market and the common rules from which we benefit and to walk away.
"There is a simple choice for Europe: reform or decline. Our determination is clear: to deliver the reform, and then let the people decide."
Britain faced further pressure on Wednesday night when Kristian Vigenin, the Bulgarian foreign minister who attended the Open Europe conference in London, echoed Barroso's concerns about populist messages from Britain.
Vigenin, who met the Labour chairman of the Commons home affairs select committee, Keith Vaz, told the Guardian: "We have seen a debate which was dominated by populist messages and which was not grounded in the real statistical data.
"We need to warn that creating obstacles for one of the four EU freedoms [movement of labour] will make us less competitive. The whole debate is how to make us more competitive.
"I am confident that after 1 January, when the broader public saw there was no influx of immigrants from Bulgaria and Romania, these fears that were not grounded will disappear and the whole debate will become focused on the real issues." Reported by guardian.co.uk 2 hours ago.
David Cameron is to use separate meetings over the next month with Angela Merkel and François Hollande to demand cast-iron legal protections for the City of London as part of reforms to prevent the UK leaving the EU.
The prime minister will tell the French president and the German chancellor, who are due to visit Britain, that the Lisbon treaty will have to be changed to prevent a "caucus" of eurozone members imposing financial services legislation on Britain.
George Osborne underlined Britain's determination to seek wide-ranging reforms when he warned that a failure to change the rules would prompt Britain to leave on the grounds that it would face a choice between exit or euro membership.
The chancellor told a conference organised by the Open Europe thinktank: "I believe it is in no one's interests for Britain to come to face a choice between joining the euro or leaving the EU. We don't want join the euro."
But Britain's isolation within the EU was highlighted on Wednesday when José Manuel Barroso, the president of the European commission, spoke out against chauvinism after the principle of the freedom of movement was questioned.
Barroso did not name any countries but it is understood he had Britain in mind after Theresa May leaked details from a draft report which raised the prospect of imposing a 75,000 cap on EU migration.
Barroso told the European parliament in Strasbourg: "Let us not give in to scaremongering and obfuscation. Let us, together, preserve a precious good for the sake of all of us as it's good for Europe's competitiveness, it's good for Europe's markets, it's good for European citizens, it's good for all of us that enjoy freedom in Europe and have an open idea of Europe and not a narrow, chauvinistic idea of the protection of the different countries."
The prime minister is expected to focus on the need for major EU structural reforms to protect the City of London when he hosts Hollande at an Anglo-French summit later this month and when he hosts Merkel and her husband for an informal weekend.
The chancellor outlined Britain's concerns when he said that from 2016 the euro group would have enough votes under the Lisbon treaty to pass financial services legislation that would apply across the whole EU, including the 10 member states outside the single currency.
Warning that the euro group had already started to discuss EU directives in private, the chancellor said: "If we cannot protect the collective interests of non-eurozone member states then they will have to choose between joining the euro, which the UK will not do, or leaving the EU.
"Europe urgently needs economic reform. Eurozone integration is necessary for the euro to survive, but proper legal protection for the rights of non-euro members is absolutely necessary to preserve the single market and make it possible for Britain to remain in the EU."
The Treasury is expected to examine a proposal by Andrea Leadsom, a member of the prime minister's policy board, who told the Guardian in 2012 that Britain should be given an effective veto over financial services legislation.
Leadsom, who introduced Osborne at the Open Europe conference, said Britain should be able to formalise the "Luxembourg compromise", which allows a member state to call a halt to votes held under the qualified majority voting system if a vital national interest is at stake.
Leadsom believes Britain could argue this would apply in this case on the grounds that 60% of the EU's financial services industry is based in the UK.
Osborne went further in his speech and said EU member states committed to a liberal economic approach should be free to press ahead with greater co-operation just as those with a different approach were seeking to introduce a financial transaction tax.
He said: "If enhanced co-operation can be used by others to create expensive, job-destroying ideas like a financial transaction tax, why don't we think about using it for job-creating measures that others oppose?"
Osborne depicted his approach as a middle course as he sought to draw a likeness between hardline sceptics who want to leave the EU and pro-Europeans who supported British membership of the euro in the late 1990s.
The chancellor said: "The one thing that unites those who urged Britain to join the euro and those who advocate leaving the EU is their shared conviction that any change is impossible and that there is no other way.
"There is another way. It is time to change the EU and to change Britain's relationship with it and then to place the decision in the hands of the British people."
The Tory leadership is trying to regain the initiative on Europe after 95 MPs signed a letter calling for parliament to be given a veto over all EU laws.
Ministers have said the proposal outlined by the backbencher Bernard Jenkin is unrealistic because it would dismantle one of Margaret Thatcher's main European legacies – denying member states a national veto in deciding the rules of the single market to prevent the likes of France from imposing protectionist measures.
While Osborne believes the rules of the single market need to be updated to protect the interests of non-eurozone member states, the government is dismissive of the Jenkin letter on the grounds that it is in effect designed to take Britain out of the EU.
Osborne made clear he had no time for what Downing Street regards as defeatist approaches on both extremes of the argument.
He said: "Strong feeling must never be allowed to cloud clear judgment about where this country's real long-term economic interests lie. It is clear what the British people want.
"They refuse to accept that we just have to take the EU as it is, that one size must fit all, that change is impossible, that reform is doomed.
"Nor do they accept that the only course open to us is to pack up and leave, to abandon the single market and the common rules from which we benefit and to walk away.
"There is a simple choice for Europe: reform or decline. Our determination is clear: to deliver the reform, and then let the people decide."
Britain faced further pressure on Wednesday night when Kristian Vigenin, the Bulgarian foreign minister who attended the Open Europe conference in London, echoed Barroso's concerns about populist messages from Britain.
Vigenin, who met the Labour chairman of the Commons home affairs select committee, Keith Vaz, told the Guardian: "We have seen a debate which was dominated by populist messages and which was not grounded in the real statistical data.
"We need to warn that creating obstacles for one of the four EU freedoms [movement of labour] will make us less competitive. The whole debate is how to make us more competitive.
"I am confident that after 1 January, when the broader public saw there was no influx of immigrants from Bulgaria and Romania, these fears that were not grounded will disappear and the whole debate will become focused on the real issues." Reported by guardian.co.uk 2 hours ago.