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| David Cameron defends decision to block EU-wide treaty | David Cameron defends decision to block EU-wide treaty |
| (40 minutes later) | |
| David Cameron has defended his decision to block an EU-wide treaty change to tackle the eurozone crisis, despite warnings it will leave the UK isolated. | David Cameron has defended his decision to block an EU-wide treaty change to tackle the eurozone crisis, despite warnings it will leave the UK isolated. |
| It looks likely that all 26 other members of the European Union will instead agree to a new "accord" setting out tougher budget rules. | It looks likely that all 26 other members of the European Union will instead agree to a new "accord" setting out tougher budget rules. |
| Labour said the UK would be left out of key decisions affecting its future. | Labour said the UK would be left out of key decisions affecting its future. |
| But the PM said he had done "the right thing" and the UK would continue to be a major player in the single market. | But the PM said he had done "the right thing" and the UK would continue to be a major player in the single market. |
| German Chancellor Angela Merkel said she "regretted" that the UK was "not able to go along the same path" as the rest of Europe. French President Nicolas Sarkozy said an agreement of all 27 EU members was not possible "thanks to our British friends". | |
| National budgets | |
| Mr Cameron told the BBC's political editor Nick Robinson that he had demanded certain safeguards in return for a treaty change, concerning the single market and the City of London but they had not been forthcoming. | |
| Having failed to reach an agreement of all 27 EU members, the 17 eurozone countries and the other EU states apart from the UK are expected to sign up to the new deal, which includes: | Having failed to reach an agreement of all 27 EU members, the 17 eurozone countries and the other EU states apart from the UK are expected to sign up to the new deal, which includes: |
| • a commitment to "balanced budgets" for eurozone countries- defined as a structural deficit no greater than 0.5% of gross domestic product - to be written into national constitutions | • a commitment to "balanced budgets" for eurozone countries- defined as a structural deficit no greater than 0.5% of gross domestic product - to be written into national constitutions |
| • automatic sanctions for any eurozone country whose deficit exceeds 3% of GDP | • automatic sanctions for any eurozone country whose deficit exceeds 3% of GDP |
| • a requirement to submit their national budgets to the European Commission, which will have the power to request that they be revised | • a requirement to submit their national budgets to the European Commission, which will have the power to request that they be revised |
| Mr Cameron said the abandoned treaty change involving all 27 members had been in danger of "distorting the single market". | Mr Cameron said the abandoned treaty change involving all 27 members had been in danger of "distorting the single market". |
| "I think I did the right thing for Britain," he said. "We were offered a treaty that didn't have proper safeguards for Britain and I decided it was not right to sign that treaty." | "I think I did the right thing for Britain," he said. "We were offered a treaty that didn't have proper safeguards for Britain and I decided it was not right to sign that treaty." |
| 'Powerful player' | |
| He added: "This does represent a change in our relationship with Europe, but the core of our relationship - the single market, the trade, the investment, the growth, the jobs that we want to see - that remains as it was." | He added: "This does represent a change in our relationship with Europe, but the core of our relationship - the single market, the trade, the investment, the growth, the jobs that we want to see - that remains as it was." |
| The prime minister said he was "not frightened of the fact sometimes you might not be included in some things". | |
| The UK would not be involved when eurozone leaders met to discuss the single currency but would remain a "full and very powerful player" in the European Council, he said. | |
| The decision was welcomed by some of Mr Cameron's MPs - Conservative Mayor of London Boris Johnson said he had "played a blinder". | |
| But Labour leader Ed Miliband said the prime minister had "mishandled these negotiations spectacularly". | |
| "It's a terrible outcome for Britain because we are going to be now excluded from key economic decisions that will affect our country in the future," he said. | |
| Mr Miliband said Mr Cameron had not "put in the hard yards of negotiation" that were necessary to build alliances and strengthen his position. | |
| "What I find incredible is that he simply ended the negotiations yesterday and said that was it. He could have carried on negotiating today to get a better outcome for Britain." | |
| 'Tough rules' | |
| Mr Sarkozy said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt out of proposed changes to the rules governing financial services. | |
| He said this was "unacceptable" because it was a lack of financial regulation that had contributed significantly to the current debt crisis. | |
| Mrs Merkel - the driving force with Mr Sarkozy behind the new accord - said: "I didn't think David Cameron sat with us at the table. | |
| "We had to get some sort of agreement and we couldn't make compromises, we had to meet tough rules." | |
| UK Independence Party leader Nigel Farage said the outcome was "the worst of all worlds" for the UK, leaving the country in Europe but without power. | |
| Labour and UKIP both warned that Mr Cameron had actually secured no new safeguards for the City of London - despite stating that that was a priority. | |
| Mr Farage said: "We finish this summit with Cameron having gained absolutely nothing, with the prospect of us repatriating powers having disappeared completely and with the City of London, that he sought to protect, now more vulnerable than it has ever been." | |
| 'Marginalised' | |
| Foreign Secretary William Hague said earlier that signing up to the amended EU treaty would have led to the UK handing over more national sovereignty to Brussels. | |
| But others have argued that was not the case as the stricter fiscal rules would only have applied to countries in the euro - or those wishing to join in the near future. | |
| German MEP Elmar Brok told 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." | |
| UK Deputy Prime Minister Nick Clegg - whose Liberal Democrat party is more pro-European than their coalition partners - said Mr Cameron had made "modest and reasonable" demands that were in the interests of the entire single market, not just Britain. | |
| But Lib Dem peer Lord Oakeshott said Mr Cameron had put the interests of the City 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." |