As David Cameron’s plans for EU reform enter a critical week, the UK faces a stark choice if renegotiation fails: either to join the euro or leave the bloc altogether by 2020 to protect the City, new research warns today.
The nation is losing its grip in Europe and is likely to be overruled on important financial decisions in favour of Eurozone interests before the end of the decade, research by Europe Economics claims.
The UK’s influence on EU-level financial regulation has already declined markedly and the situation is likely to get worse, with an end to double majority voting within a decade and UK interests shifting from Europe, the report concludes.
The findings come as David Cameron prepares to force a vote this week to head off the candidacy of Jean-Claude Juncker, a pro-European politician, as the next EU commission president. Juncker would make the possibility of reform increasingly difficult for the Prime Minister, who has vowed to fight his appointment.
“EU-wide financial regulation may have opened up markets to the UK in the past, but now it looks set to ensure the UK is comprehensively overruled by the Eurozone’s needs – at the expense of our greatest global asset,” Matthew Elliot, chief executive of Business for Britain, who commissioned the research, warned.
“This loss of influence and the fact that we have had to resort to the European courts is a clear indicator that Britain must seek a new deal over how financial regulations are formed,” he added.
Alisdair McIntosh, director of Business for New Europe said the report is “scaremongering”, adding: “The PM doesn’t need reminding of the importance of the UK’s financial services industry. Warning of diminishing influence and issuing thinly veiled calls for exit are hardly the kind of support the industry needs.”
Fifty-five UK business leaders signed a letter in the Sunday Times yesterday, calling on the government to ensure regulation is determined by the UK parliament, not MEPs in Brussels.