Cameron to nod through EU treaty

David Cameron will reignite tensions in the Tory party over Europe when he nods through a treaty intended to strengthen eurozone fiscal discipline, even though it contains elements he had previously opposed.

Since his use of the veto at the last European summit in Brussels, Mr Cameron has instructed diplomats to take a constructive approach to help eurozone countries deal with their fiscal crisis – an issue that will dominate an informal EU summit on Monday.

Britain has dropped its opposition to eurozone countries making use of EU buildings and two key EU institutions (the European Commission and European Court of Justice) to impose fiscal discipline in the euro area. The new fiscal rules were agreed outside the normal EU framework after Mr Cameron blocked their incorporation into the EU treaty during bad-tempered negotiations on December 9.

As many as 26 member states are being asked to agree the text in Brussels.

The diplomatic bridge-building by Mr Cameron has unsettled many Tory MPs who saw his use of the veto last month as a defining moment.

Iain Duncan Smith, the eurosceptic work and pensions secretary, said he “absolutely trusted” Mr Cameron to continue to resist the use of EU institutions by those countries that have signed the fiscal compact. “The prime minister vetoed them using the institutions because he had no guarantee that what they were proposing would not damage the single market or cause problems for the financial sector.”

But at the summit Mr Cameron will give the eurozone countries the benefit of the doubt. He has been reassured that the new treaty contains safeguards to prevent it from applying to the EU’s single market, which the prime minister insists is the property of all 27 member states. Germany has been at the forefront of ensuring the treaty has a narrow focus on eurozone fiscal discipline and does not become, as Paris would like, a vehicle for formalising a two-speed Europe, with Britain at the margins.

Although Britain cannot stop other EU members from proceeding with a separate treaty, Mr Cameron could threaten to take legal action if he thought it was illegally making use of EU institutions or undermined the single market. Officials say they see no immediate threat but remain vigilant.

The more conciliatory app­roach has reassured Nick Clegg, but the deputy prime minister has insisted that one of his officials attends the Brussels summit to avoid a repeat of last month’s meeting when contact between Mr Cameron and his deputy broke down.

Separately, Open Europe, a think-tank with strong links to Tory MPs, has published a report heralding the next big European row on the horizon: whether Britain should use a “one-off opportunity to unilaterally repatriate up to 130 EU laws on crime and policing”. Britain must decide before June 2014 whether a raft of police and justice laws, including the European arrest warrant, should continue to apply to the UK. The measures are often popular with police but seen as an infringement of national sovereignty by some Tory MPs.

Mr Cameron sees the meeting as a way to push Britain’s agenda of open markets and the deepening of the single market to help tackle Europe’s economic and employment problems.