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Cameron blocks EU Treaty deal, but eurozone members move on to solve crisis
The European Union failed to secure backing from all 27 countries to change the EU treaty, meaning any deal will now likely involve the 17 euro zone countries plus any others that want to join.
British Prime Minister David Cameron arriving for last night's EU Summit in Brussels
An agreement between all 27 EU Member States fell through after British Prime Minister David Cameron demanded concessions that Germany and France were not willing to give in to.
The French President Nicolas Sarkozy said the Cameron's demands for concessions to protect Britain's financial sector were "unacceptable".
France and Germany say they will now pursue a treaty involving members of the euro - along with any other countries willing to take part.
The 27 leaders - amongst whom also Maltese Prime Minister Lawrence Gonzi - spent the first five hours of talks discussing what options they faced in trying to restore eurozone stability and credibility.
Germany insisted that a treaty change was vital for the introduction of strict new rules and sanctions over eurozone members breaching debt limits. The rules would not apply to the UK, even if all 27 agreed them.
A 27-way accord was described by Cameron earlier this week as "the most comprehensive and credible way" to provide the necessary safeguards and restore confidence in the single currency.
But in heated and tense discussions over dinner he was warned that the 17 eurozone countries would go ahead with their own treaty revision if he pushed Britain's demands too far.
The talks turned to treaty change shortly after 1am and ended at 5am with a breakdown of efforts by the 27 to stick together.
The signs now are that the new treaty will be endorsed by "17-plus" - the 17 eurozone nations and as many of the 10 others as wished to do so.
EU officials suggested that the situation now looked like the UK will be joined only by Sweden in isolation.
The problem for the 17 is that the use of the EU institutions - particularly the European Commission - to implement their decisions, would require the unanimous agreement of all 27 countries.
European Commission president Jose Manuel Barroso said that he regretted that unanimity on treaty change had not been possible.
"Those that have today approved this new fiscal compact have stated that they want to put it as soon as possible into a new fully-fledged treaty, after revision of the current treaties," he said.
"Having seen it was not possible to get unanimity, it was the proper decision to go ahead at least with those ready to commit immediately. That includes all 17 in the eurozone, plus some who are not in the euro area but want to take part in this fiscal compact."
Barroso insisted EU lawyers had already stated that it would be possible for the EU institutions to take a full part in policy issues involving the treaty changes.
He added: "We would have preferred a unanimous agreement. This was not possible so I think the only alternative was to do it through this kind of intergovernmental treaty - but that does not mean that the EU institutions are not going to have a role.
"We are determined if we can do it from legal point of view."
Besides the proposed treaty change, EU leaders also debated steps to strengthen their financial resources to tackle the debt crisis.
The leaders also reportedly agreed that the euro zone's permanent bailout fund, the European Stability Mechanism, would have a capacity capped at €500 billion, rather than earlier expectations that it could top that figure.
It was also agreed that the ESM would not be granted a banking licence, as had originally been proposed by European Council President Herman Van Rompuy, the diplomat said.
They also agreed to explore the idea of providing bilateral loans to the International Monetary Fund totalling 200 billion euros, with €150 billion coming from the euro zone, to bolster IMF resources to tackle Europe's debt crisis.
Igor P. Shuvalov •
.....the Economist, the Charlemagne's notebook blog describes the agreement - and Britain's non-participation - as Europe's "great divorce".
The Financial Times says EU leaders are "struggling to cope" with what it describes as "a profound split".
(from the BBC news)
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The ECB would deault, but Eurozone debt would not default, simply losing most of its value obviously,that means a period of extraordinarily high inflation would accompany such a collapse,of course the losers are small savers like my granma, who put her substantial life saveings in GOV BONDS. At her retirement becomse penniless, by the time she died.
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Panicked by big banks, Europe's governments want to change our constitutions and the EU treaty to permanently ban vital public spending. This is nuts: in the 1930s such spending was precisely what allowed Europe and the US to escape the Great Depression. Europe needs to toughen up and regulate the banks, not tie our governments' hands to make them happy.
We live in a democracy -- so Europe's leaders should not be able agree to this plan themselves -- they need to come up with solutions that have the approval of the people or our Parliament.
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After Merkel and Sarkozy shunned Cameron it is now obvious that Gonzi will bow to pressure so that there is tax harmonisation in the Eurozone. This will greatly damage the financial service industry which we have have so carefully nursed in the last years.
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Very good. I am tired to having the Germans along with the French using the economic situation to weaken democracy in Europe. We need to ber very careful not to hand more power and our democratic rights to EU bureaucrates and to those large countries in Europe who are trying to conquer us little by little. I am still in favor of the EU but only as an economic for trading purposes and militarily (as some form of the current Nato Partnership), but not POLITICALLY AND CULTURALLY.
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Araw min ikun irid jiddefendi lil pajjiżu x'jagħmel u min ikun pulċinell imġebbed bl-ispag minn Brussell x'jagħmel u joqgħod għal kollox. ** Morru isimgħu u araw l-aħbarijiet live fuq il-Eurocrisis u s-Summit u l-vot tal-Prim Ministru Ingliż u għalfejn ma aċċettax li jsir trattat ġdid u kif dawn l-affarijiet qed jinħbew mill-poplu Malti. ** Biex insalvaw irridu nitilqu mill-Euro u l-UE jgħidu x'jgħidu l-politiċi mixtrija pulċinelli Maltin. ** http://www.bbc.co.uk/news/world-europe-16093316 ** Live EU summit
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Klabb fejn jidher li hadd ma jaqbel u kullhadd irid jaghmel dak li irid. Nixtiq inkun naf fejn hija l-UNJONI u f'xiex din Unjoni. Nahseb li l-unjoni qeda li jifthemu u iffarku xi pajjiz bhal ma ghamlu l-allat ta l-UE fliemkien ma l-akbar alla tad-dinja, l-Amerika. Wasal iz-zmien lid-dinja tahdem kontra il-faqar,mard, guh, l-injustizzi,diskriminazzjoni, gwerer biex forsi xi darba uliedna jew ulied uliedna jghixu fil PACI u TRANQILLITA.
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Il-Germanja ma rebhitniex fil-gwerra, Franza giet salvata mill-hakma Germaniza mill-Ingliterra u issa ara x'qed taghmel Franza mal-Germanja konfoffa biex ikissru lil Gran Brittanja u ahna Malta taghna, gzira ckejkna li qatt ma giet mirbuha minn hadd imma okkupata ghal ftit zmien biss issa l-Germanja & Co ser jirbhuna ghax m'ghandniex gellieda bhal Prim Ministru Ingliz li jiggieled ghad-drittijiet ta' pajjizu, ahna bil-kontra nappruvaw dak li hemm bzonn biex pajjizi ohra joqghodu tajjeb. Dik tmexxija ta' Gvern sod immexxi minn Prim Ministru b'par idejn sodi? Nistennew u naraw x'se jigri.
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Germany insisted that a treaty change was vital for the introduction of strict new rules----
Gonzi can't even stick to the established rules, so these new rules will also be ignored with the same enthusiasm.
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Good old Malta. Occupied by the French in 1798. Surrendered by the French to the British a couple of years later. The Germans besieged Malta in 1945 but were defeated by the British. Could history be repeating itself!
