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  • Britain isolated as Cameron vetoes treaty changes
  • Changes 'not in our interests'
  • Merkel says Cameron compromise "rotten"
  • 26 countries agree to draft new treaty for more fiscal integration
Merkel, Sarkozy and Barrosso.
France's President Sarkozy talks with Germany's Chancellor Merkel and European Commission President Barroso at a European Union summit in Brussels. REUTERS/Yves Herman

16:30 That's pretty much it for the day's events now.

Prime Minister David Cameron has drawn a line in the sand between Britain and the rest of the EU, as he leaves the summit in Brussels as the only leader not to have agreed in principle to a new treaty that deepens fiscal integration in the area.

This, he says, is because what was being proposed is not in Britain's interests.

Other EU leaders say Cameron's compromises were "unacceptable", as the PM tried to shield London's large financial industry from more EU regulation and taxes.

26 of the 27 EU countries are in near agreement. Britain stands alone in isolation.

Some fear this will leave Britain out of any future decision making in the EU, despite the influence its policy and direction has on the British economy.

Boris Johnson, London's Conservative mayor and a prominent eurosceptic, said Cameron has "played a blinder" in how he's handled the summit.

Labour leader Ed Miliband criticised Cameron's "weakness" within the EU, describing the outcome as "terrible for Britain".

Markets were uncertain about the new EU treaty. European government bond yields edged up slightly, notably Italian and Spanish bonds, though the progress made by eurozone states at the summit towards further integration and stability has staved off a market disaster in the short term, at least.

British banking stocks were up as was the FTSE 100, as UK markets rallied at Cameron's actions.

Now Cameron must return home from this battle in Brussels to another in Britain.

He needs to win the argument justifying his decision to section us off from the rest of the EU, else his credibility will take a blow.

While he has already convinced a large section of his own party, where euroscpeticism is rife, he has work to do in assuring his coalition partners, the pro-EU Liberal Democrats, that what he did is right.

Then there's the public, who Cameron must show that this wasn't a careless move to distance ourselves from crucial economic decision making, at a time when our economy needs all the advantages it can get.

Thanks for reading, and if you want more then see what our reporter Tom Nicolson, who travelled to Brussels for the EU summit, has to say about the day's events.

15:45 The EU has now published its final conclusions on the summit.

The statement from EU heads says: "The European Union and the euro area have done much over the past 18 months to improve economic governance and adopt new measures in response to the sovereign debt crisis.

"However, market tensions in the euro area have increased, and we need to step up our efforts to address the current challenges. Today we agreed to move towards a stronger economic union.

"This implies action in two directions: A new fiscal compact and strengthened economic policy coordination; the development of our stabilisation tools to face short term challenges."

Tom Nicolson, our reporter in Brussels, says: "The most important point is point six, which talks about integration for the "Euro Plus Pact". This is major as it brings up the tax and economic integration within the euro zone countries - much deeper integration than anyone ever even spoke of earlier in the week."

He's also points to analysis by the Spanish news website Aqui Europa, who give Cameron a positive indictment for his performance at the summit.

"Cameron was incredibly brave. What he did for Britain was fantastic. Britain are not out of the EU but they are out of the mess. This is a good day for Cameron," they say.

15:28 Now for some reaction from the French press, courtesy of International Business Times UK reporter Emanuelle Esposti:

Le Monde:

  • In an editorial entitled "Britain, more insular than ever", the newspaper begins by listing some historical British qualities including democracy, the BBC, John le Carré and Elizabethan poetry (yes, really), Then it goes on to say that "Germany, France, and the majority of other EU member countrues were right ... to say no to London."
  • The author concedes that that the UK is not in the eurozone and therefore "bears no responsibility for the ineptitude of eurozone delegates", but adds that "the British have distanced themselves from a movement towards budgetary and economic integration [in the eurozone]."
  • "Britain doesn't believe in the European idea. They are strangers to this project ... that to us seems more important now than ever."
  • It also says that UK is only interested in the eurozone for its single market, and that "they are indifferent to the rest of the European project".

Le Figaro:

  • "David cameron's historical veto marks the beginning of a new era of isolation for Britain in Europe," says one article.
  • A French review of the British press says the media "perplexed after Cameron's refusal".
  • "[William Hague] tried to relativise Britain's isolation," claims another piece.
  • "The ensemble of the reactions [to Cameron's veto], from pro-Europeans as well as eurosceptics, served more to underline the uncertain future of the divergant road chosen by London."
  • "Great Britain is in the process of leaving Europe in numerous domains."


  • Interview with economistCharles Wyplosz: "Great Britain is above all concerned with saving its financial system, it has no intention of sacrificing it."
  • "The separation [of UK from the rest of the EU] is a good thing for everyone. It will without doubt reinforce London's dominant financial position while the continental financial system will contuinue to be dominated by its banks."

15:07 Labour leader Ed Miliband speaking to the BBC in the past hour has said the EU summit is "a terrible outcome for Britain".

"Frankly David Cameron has mishandled these negotiations quite spectacularly," he said.

When asked what he would have done if he was Prime Minister, Miliband said he would have "spent months making alliances" so he didn't face the same barriers as Cameron.

15:04 PoliticsHome have quotes from the Cameron press briefing, where he spoke to a select few journalists after the summit had concluded.

Cameron said: "What I've done is made sure that Britain's interests were protected. [The treaty] didn't have sufficient safeguards for Britain, so I wasn't prepared to support it.

"The point is that we remain in the single market ... we maintain that position and those institutions and that market is protected for Britain.

"I said to the people of Britain that if I couldn't get a treaty that was good for Britain, I wouldn't sign up to it, and I was good to my word."

14:40 As the Italian government bond yields edge up to the danger zone, our reporter Gianluca Mezzofiore looks at how Italy is reacting to today's EU summit:

"The leader of Italy's left-wing Democratic Party praised the deal reached in Brussels. 'It's a big step forward, but it's not enough,' he said. 'It is important that European countries agreed on a fiscal union, but the BCE should have wider margins of intervention.'

"Italian President Giorgio Napolitano expressed his hope Friday morning that 'everything goes well in Brussels'.

"An editorial of liberal newspaper La Repubblica warned of the deal's risk for the future of Europe's economy. 'Let's not think that this agreement could solve the problems we are debating. The proposed amendments to the European Treaty and EU policy draw a dark future and project us into years of economic stagnation, if not depression.'

"'The fiscal union proposed by German Chancellor Angela Merkel ... is just a tighter monitoring tool on EU members' public accounts, but ultimately it is up to them adjusting their debts.'"

"Italian Prime Minister Mario Monti's plan to issue Eurobonds or stability bonds was met with scepticism by Chancellor Merkel. Conversely, it was backed by Jose Manuel Barroso, President of EU Commission and Christine Lagarde, President of FMI."

14:16 The markets have had an uncertain day for the most part, with investors holding off making any hasty deals.

However as the day wore on and European leaders appear to have taken a genuine step towards stability, some markets started to rally.

The FTSE 100 is up as are British banking stocks, as Cameron tried to defend the City from more EU regulations and tax.

There were jitters in the European government bond markets, as yields on Italian and Spanish bonds edged up slightly.

While this is not good - Italian bonds are around 6.6 per cent, close to the 7 per cent bailout zone - it's not the disaster it could have been, if EU leaders had failed to make any progress.

14:02 David Cameron is pouring cool water over his excited eurosceptic party members. They've been out in force today, praising Cameron for his stance on the treaty changes.

Some are possibly a little too excited, thinking this may be the start of a full withdrawal from the EU.

David Cameron is having a press conference after all, though it's behind closed doors and only with a select few journalists.

Reuters report him as saying: "Membership is in our interests. I've always said if that's the case I'll support our membership."

13:55 Our reporter Tom is watching José Mannuel Barroso, president of the European Commission, give his view on the summit.

He tweets the following:

"We did try to make a treaty at 27. But it was not possible. But we will try with 26.

"This formula has some handicaps but we will try to overcome them.

"Three member states they want to consult national parliament about the treaty.

"It would be much more simple to have all the 27 states agreeing. And quicker, says EU pres of Commission."

13:33 Angela Merkel speaking now: "I believe what we have created here ... is a tremendous step forward towards a stable Europe."

Slight sideswipe at Cameron as she says the 26 countries who have now agreed to the treaty "recognise this is for the common good".

She's also talking of "more rigid and stringent" financial rules for member states in a new treaty, including deficit/GDP ratio of 0.5 per cent, else face sanctions.

There'll also be "increased capital" for EFSF - the European Financial Stability Facility - which is the bailout fund for states with failing economies.

Merkel insisted the 10-hour meeting where Britain eventually vetoed changes to the Lisbon treaty weren't tense and that the atmosphere was "constructive and good".

She added that "we regret that Great Britain is not able to go along the same path".

13:04 Looks like Cameron won't be facing tough questions from the media after all.

Tom follows up with this:

"Cameron will not be taking questions from the press. He's chickened out of it. The backroom staff say he gave his press conference (at 6am) this morning. Andrew Bell from Sky News sitting opposite me said he hasn't been to bed yet and is knackered. No Europe, no deal, no press conference for Cameron."

13:00 The EU leaders have now completed the summit and are heading into a press conference, where our reporter Tom will feed back what they are saying.

For now, he gives this:

"In undoubtledy the most significant summit for the UK in 50 years, Cameron will face some really tough questions from the media - even his back room staff have revealed that this has been a catastrophe.

"Britain out in the cold, and no repatriated powers back to the UK. Eurosceptics will now want to go further and will begin by questioning our membership altogether."

He adds that although he thinks this summit has secured the short-term future of the eurozone "the details still aren't there".

12:42 Some political reactions to Prime Minister David Cameron's vetoing of the proposed EU treaty after his suggestions for compromise were rejected.

French president Nicolas Sarkozy described Cameron's offer as "unnacceptable" while Angela Merkel, the German leader, blasted it as "rotten".

Labour MP Denis MacShane has said that notorious Conservative Eurosceptic Bill Cash "has won" and that Britain should leave the EU.

Boris Johnson, the Conservative London mayor, said that David Cameron "played a blinder and he has done the only thing that was really open to him to do".

Lord Oakshott, a Liberal Democrat peer, said: "It is a black day for Britain and Europe. We are now in the waiting room while critical decisions are being taken."

12:32 It's lunchtime in Brussels. Tom lets us know what the atmosphere is like at the summit:

"Both journalists and politicians have had two hours sleep since yesterday morning, and there's lots and lots of coffee cups on tables, as well as bottles of water and snacks to keep everyone beavering away.

"There is almost a sense of: 'Is this really happening?'. UK journalists, most of them left wing, think we have been taken out of europe to satisfy those 81 right wing back benchers that rebelled in October over the EU referendum. Some are even angry about it.

"With no free desks in the press aream the International Business Times UK has set up shop beside the informaiton point in the wings of the hall. It's a pretty good spot, but someone has just come up to me shouting something in French for some 'information'. No idea."

12:06 Reuters is reporting that nine EU countries have now agreed to draft a treaty with the 17 eurozone members, who all want a deeper fiscal union.

Britain is quickly becoming the loneliest country in Europe.

11:49 Another photo from Tom, this time of a mob of press surrounding Belgian MEP Guy Verhofstadt, once dubbed "Baby Thatcher".

Guy Verhofstadt

11:43 A Dutch photographer passed this photo of a tense-looking Sarkozy at the family photo to our reporter Tom.


11:30 Tom's been chatting to the other journalists at the EU summit:

"Senior European correspondent from Trouw Gijs Moes, just joked with me they 'should close the channel tunnel' after today, That's the reality check of how Cameron is seen in Europe today.

"Belgian reporter Anne van der Schoot says: 'He got nothing in return today. He may have saved face saying that he stuck up for Britain, but he's got nothing'."

11:21 BREAKING: From our reporter in Brussels Tom Nicolson: "Hungary are having a change of heart and are now agreeing to the pact as well, leaving the UK the solitary country on the outside of this new treaty. The Hungarians are saying that they will have to ask parliament first."

11:16 Boris Johnson, London's Eurosceptic Conservative mayor, tells the BBC that he thinks David Cameron has "played a blinder" in his handling of the EU summit.

Johnson does, after all, represent the City of London, which is the hub of Britain's financial industry.

11:12 In Brussels our reporter Tom confirmed with Cameron's team that there was an agreement between 23 EU member states, including all 17 in th eurozone, on a new treaty - without Britain.

"Cameron has made this deal simply to appease right-wing members of his own party. It's going to leave Britain even weaker than it was before," Tom says.

"This was one of the worst case scenarios for DC."

11:04 From our reporter Tom: "Spoke to a British couple heading to Brussels for a romantic weekend on the Eurostar who do believe that Cameron is doing the right thing and protecting the UK from Europe at all costs. There were also some other Brits getting drunk at 6am."

10:48 The BBC reports that 17 eurozone countries and six other EU states have agreed to go ahead with a new treaty, after their attempts to revise the Lisbon treaty fell through early this morning.

David Cameron used his veto to quash the changes, which he didn't see as in Britain's interests and damaging to our financial industry.

This means they'll make new financial rules without any British involvement, isolating us from the decision-making process on issues that will affect our economy.

Some people will be happy, though. Cameron's eurosceptic backbenchers will be ecstatic that he faced down other EU members - but at what cost?

10:39 The EU leaders have just had their "family photo", says our reporter Tom Nicolson.

Cameron was standing behind Sarkozy and "everyone seemed fairly relaxed", he adds.

Putting on a brave face, perhaps?

10:32 The markets are fairly stable at the moment, the FTSE 100 stays around the same point it opened at, government bond yields aren't making any significant movements.

It feels like investors are waiting around for a big piece of news to break from the EU summit, before they place their bets.

10:15 Our man in Brussels Tom Nicolson says the Britain just doesn't "get" the EU.

"I think what Brits don't really understand is how integrated the EU is already within Europe. We're not physically attached to it, and we're not a part of the single currency, which kind of means we're not really that fussed about it.

"But here, it is aboolutely a part of their culture, which is why you can understand why the eurozone countries are keen to save it."

He has also been admiring the EU buildings in the city, pointing out the billions of pounds of real estate that would become defunct if the eurozone and EU were to break up.

Tom's also been speaking to Riva Richmond from the Wall Street Journal who is based in Brussels.

"Negotiations went on to around 5am last night and journalists filed copy around 6am," says Tom.

"Leaders from the EU were then showered and dress again to arrive at 10am local time. 'With everything that's going on with the crisis some job being a politician at the moment,' Riva tells me."

10:02 Labour leader Ed Miliband has criticised David Cameron's handling of the summit so far.

He tweeted: "Outcome at last night's EU summit was a sign of weakness from David Cameron - why did he fail to build alliances before the summit?"

09:44 Moody's, the credit rating agency, downgraded three major French banks this morning.

BNP Paribas, Societe Generale and Credit Agricole had their ratings cut because of their difficulty in raising funds and the worsening economic climate.

Credit rating agencies hold a lot of power over the eurozone. Standard & Poor's placed all 17 eurozone countries on "negative watch" earlier this week, which means they think there's a chance they'll have to downgrade the entire eurozone.

This would annihilate what little market confidence there is left in the area and send bond yields upward.

09:30 As the EU summit meeting starts, Italian and Spanish bond yields are up slightly.

Italy is teetering around the 6.6% mark, which is close to the danger-mark of 7 per cent.

The European sovereign debt market will be the one to watch. As the yields rise or fall, we'll get a good indication of how successful the summit has been.

This all hinges on market confidence. If the cost of borrowing for already heavily indebted countries soars to unaffordable levels, you're in bailout territory.

Once one goes, they'll all go, just like dominos.

This will have a very bad affect on Britain, as British banks and financial institutions hold a lot of European sovereign debt.

If those debtors deafult then, well, probably best not to think about that just yet...

Last Chance to Save the Eurozone

It's the final day of the EU summit in Brussels and many are saying it's the last chance to save the troubled eurozone.

Britain has already put itself at odds with the rest of the European Union by vetoing a change to the Lisbon treaty.

The treaty change, which Prime Minister David Cameron said is not in Britain's interests following 10-hour negotiations, would have seen tougher financial rules.

This would have had an impact on Britain's large financial sector.

Now the agreeing EU member states will make their own separate treaty excluding Britain, leaving us out in the cold on important decision-making that will affect our economy.

Markets across the world will be watching today closely, waiting for signs of reassurance of the long-term stability of the eurozone.

International Business Times UK reporter Tom Nicolson, who is at the summit in Brussels, took a look at five challenges facing Cameron.