A NEW draft of the Eurozone’s “fiscal compact” emerged yesterday that appeared to show some movement towards the UK’s negotiating position.
The draft, published by the think-tank Open Europe, takes out all reference to the single market – the whole EU – in favour of applying new fiscal rules only to Eurozone members.
But it is still very far from the “safeguards” Britain wanted and chancellor George Osborne has vowed to fight “directive by directive” to stop an ongoing Brussels power grab that he says goes against past treaties. Osborne said yesterday that the UK is concerned about more and more powers being taken over by supranational regulators like the European Banking Authority.
City A.M. understands that this problem was highlighted to the government by senior British bankers on the morning of the 9 December “veto” summit. Since the UK did not win ground at the summit, it is now being tackled in technical negotiations.
The new draft treaty scales back the proposed use of EU-wide institutions such as the European Court of Justice. And it removes the commitment in the original draft to “foster fiscal discipline and deeper integration in the internal market”, which could be taken to apply to the entire European single market, not just the Eurozone.