Eurozone crisis: David Cameron claims EU victory – but Italy is big winner

By DAVID MADDOX
Published on 29/06/2012 11:26

DAVID Cameron claimed last night to have safeguarded British interests, as the eurozone took a major step towards banking union to save the beleaguered single currency.

After two days of tense negotiations, the Prime Minister hailed a deal he said would mean the UK still having fair access to the single market while keeping out of further European integration.

The biggest winner from the summit in Brussels was Mr Cameron’s Italian counterpart, Mario Monti, who faced down the Germans and forced a deal on helping his country, Spain, Greece and Portugal.

The deal, agreed by the EU leaders in Brussels in the early hours of yesterday, saw Germany give ground on providing more money for economies such as Italy and Spain to reduce the cost of their debt, as well as allowing the European Central Bank to play a larger role.

Crucially, the deal will enable cash from EU bail-out funds to be channelled directly to struggling banks without adding to government debt.

The agreement came after Mr Monti and Spain’s Mariano Rajoy took on German chancellor Angela Merkel. Mr Monti said he would block discussions on all other issues until the Germans relented.

Mr Cameron said the deal could be the first step towards ending the eurozone debt crisis, which is also harming the UK economy. “For the first time in some time, we have actually seen steps taken that I think the markets will see are trying to get ahead of the game,” he said.

“They need to be followed through, and I hope there won’t be a lot of quibbling and worrying about ‘is it too far’ and the rest of it. If they want to save their currency, they have got to get on and do it.”

Mr Cameron said he had fought during the negotiations to remove language implying banking union could be extended to all 27 EU member states. He said that ensured British banks would continue to be regulated by the Bank of England.

“We have to stand behind our own banks, but I don’t want British taxpayers guaranteeing eurozone banks, Spanish banks or Greek banks,” he said.

The PM said he won an agreement that the part of the new European patent court covering pharmaceuticals would be based in London, bringing “millions of pounds and hundreds of jobs”.

Officials said Mr Cameron and European Commission president Jose Manuel Barroso had worked together on summit declaration language designed to emphasise that the smooth running of the 27-nation single market would not be compromised by new 17-nation rules for the running of the single currency.