EU treaty will not 'place obligations' on UK, says PM
(40 minutes later)
The UK will not veto the use of EU-wide institutions by members of a eurozone fiscal pact, William Hague has said.
David Cameron has said a new treaty paving the way for closer fiscal co-operation among EU members will "not place any obligations" on the UK.
The foreign secretary said the UK had "some real legal concerns" about the use of the European Court of Justice.
The prime minister said he believed a new treaty on budgetary rules set to be signed by 25 EU countries would not "encroach" on UK national interests.
But he told the BBC UK was "reserving its position", and would only "take action" if use of the institutions threatened Britain's interests.
But he said he would be watching the new arrangements "like a hawk".
David Cameron says he wants the focus to be on growth and jobs as he attends the latest EU summit.
He also said there had been "good steps" forward on promoting growth at Monday's EU summit in Brussels.
Twenty six other EU states are expected to join the fiscal agreement.
The Czech Republic has joined the UK by saying it will not sign an EU-wide agreement on budgetary co-operation but 25 other EU states are set to sign a new treaty, paving the way for closer fiscal union, as early as March.
Mr Hague spoke ahead of the summit in Brussels on Monday which has been dominated by the ongoing eurozone debt crisis.
'National interest'
Arriving at the summit, the prime minister said all of those attending the summit needed "to get really serious about the growth agenda in Europe".
Mr Cameron vetoed an outline accord in December, saying the UK had not got sufficient safeguards over the future workings of the single market and financial regulation affecting the City of London.
David Cameron has come to Brussels to show - unlike on his last visit - that he isn't isolated.
The UK has said it will not veto the use of EU-wide institutions by the new group but insists this must only be done with the consent of all 27 members. The governent has also said it has "some legal concerns" about the use of the European Court of Justice to enforce the new rules.
In fact he wants to be seen in the vanguard of the jobs and growth agenda, with calls for more burdens on small businesses to be lifted. But he has run in to a little local difficulty.
At a press conference, Mr Cameron said the UK would not be "bound by" by the terms of the new treaty and while he wished the 25 countries well, the UK would be monitoring the new arrangements closely.
Last month when he refused to sign up to the new fiscal pact, he suggested EU institutions shouldn't be used in the service of a smaller group of countries (even if that group, in the end, consists of 26 of the 27 EU members), stating: "We will insist that the EU institutions - the court, the commission - work for ALL 27 nations of the EU."
He said: "Our national interest is that these countries get on and sort out the mess that is the euro.
But the latest draft of the fiscal pact - which is being discussed today - does envisage a role for the European Court of Justice.
"It is also in our national interest that the new treaty - outside the EU - does not encroach on the single market or the things we care about.
It suggests that the process of 'fiscal pact' countries writing into their legal systems a provision for balanced budgets should be "subject to the jurisdiction of the European Court of Justice".
"That is the outcome we want to achieve. We will be watching like a hawk and if there is any sign they are going to encroach on the single market then we will take appropriate action."
This - say some Eurosceptic Conservative MPs - proves the government has been backsliding on its commitments, and bending to Brussels pressure by not objecting to the use of the court.
Mr Cameron said EU leaders had made progress on measures to support growth and jobs including cutting tape, reducing barriers to digital investment and pursuing free trade deals.
The government would say they have done well - against opposition from France - to limit the role of EU institutions in the new arrangements.
After the summit, French President Nicolas Sarkozy said he expected a "definitive agreement" within the next few days over Greece's debts amid pressure on banks to write down the value of their Greek investments.
British ministers now talk of opposing the "inappropriate use of EU institutions" rather than any use of EU institutions.
They hope with the challenges facing the Eurozone currently, few MPs will transform their qualms over their subtle shift into rebellion.
"That means completing the single market, it means signing trade deals with the fastest growing parts of the world and it means a serious effort at deregulation, particularly for small businesses, so they can support the jobs and the growth they need," he said.
"That's the agenda I'm going to be pushing and I hope to get a lot of support."
In December, Mr Cameron vetoed treaty changes involving all EU states, which were aimed at bringing about closer fiscal union within the eurozone to help tackle its debt crisis.
But Labour's shadow foreign secretary Douglas Alexander said: "William Hague has been forced to admit this morning that the deal on the table today does not include any direct requirements of the UK, making David Cameron's decision to walk away from the negotiations last month even less understandable."
The foreign secretary's comments appear to be in conflict with those of fellow Conservative cabinet minister Iain Duncan Smith, who said he trusted the prime minister to prevent the use of EU-wide institutions.
"The fact is the prime minister vetoed them using the institutions and he has always said that veto was because we had no guarantees that what they are proposing would not damage the single market, or for that matter, would actually cause problems for the financial sector," he told BBC One's Andrew Marr Show.
But Mr Hague said that despite legal concerns about the European Court, "we're not intending to take action about that now".
"If the use of the EU institutions at any point threatens Britain's fundamental rights under the EU treaties, or damages our vital interests such as the single market, then we would have to take action about that, including legal action, so we will reserve our position on that," he told BBC Radio 4's Today programme.
"On the specific question about the use of the court, we are not signing a treaty that permits that, but we are reserving our position."
He said the fiscal pact countries would give "assurances" that no damage would be done to UK interests, and ministers would wait to see if that was the case.
"If we were to say 'you cannot use these things at all' what we would be up against would be that many of the provisions are already taken care of in the existing EU treaties."
'Legal difficulties'
At the time of Mr Cameron's veto, Conservative MPs urged him to ensure that institutions built for all 27 member states were not used by the new grouping of other EU states.
Mr Cameron told MPs at the time: "In the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, Britain included."
He later told BBC Radio 4's Today programme he would do "everything possible" to stop other EU states from discussing the single market without the UK.
But he admitted there were "legal difficulties" surrounding the use of institutions like the European Commission and European Court of Justice.
UK Independence Party MEP Paul Nuttall - whose party campaigns for Britain to leave the European Union - accused Mr Cameron of "capitulating" in the face of EU demands.
"Just when a strong stand is required he shows weakness. If you give the EU an inch they will take a mile. It weakens his position for years to come, both at the EU negotiating table and at Westminster," he said.
The UK has secured official observer status in negotiations over the fiscal pact, but some suggest it will still suffer for being left outside a powerful new club.
Eurosceptic Conservative MP Douglas Carswell said it was not the job of UK politicians "to cosy up to unaccountable elites in Brussels".
"If the rest of the European member states create a fiscal agreement with its separate architecture and separate institutions that's a very good thing," he said.
"It's the beginning of the end of our participation and that should be welcomed and encouraged."
