CORRECTED-UPDATE 1-UK's Cameron rallies EU countries outside euro zone

Fri Oct 28, 2011 12:02pm EDT

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By Mohammed Abbas

PERTH, Australia Oct 28 (Reuters) - British Prime Minister David Cameron on Friday said he would work with other European Union members outside the euro zone to ensure their interests are not compromised in efforts to fix the region's sovereign debt crisis.

Cameron reminded the European Commission, the EU executive body, it had a duty to safeguard the 27-member EU bloc, amid concerns of "caucusing" -- decision making by only some members of a group then pushing others to sign up -- by the 17 euro zone states that share the embattled currency.

The prime minister, in Australia for a Commonwealth summit, said London's status as Europe's financial centre was one of the main risks of being frozen out of talks on EU reforms, describing the city as under "constant attack through Brussels directives".

"There are a lot of things the euro zone is doing together. Having more meetings alone, establishing machinery -- it raises the question of could there be caucusing?" said Cameron, who had attended Wednesday's emergency EU summit in Brussels.

Britain is also wary of possible changes to the EU single-market, as euro zone leaders pursue efforts for greater fiscal integration to bolster the currency union.

"It's important that we safeguard the integrity of the single market of the 27, that is our key national interest .... There are other members who are not in the euro who care very deeply about the single market," Cameron told a news conference in the western Australian city of Perth.

At Wednesday's summit, European leaders agreed a plan to provide debt relief for Greece, recapitalise European banks and boost the bloc's rescue fund, though details have yet to be hammered out.

Following a meeting of all EU members, Cameron held separate talks with some of the leaders of the 10 countries not in the euro zone; Sweden, Poland, Denmark and the Czech Republic.

"There is common agreement that this was an important issue (caucusing) and that we should be working together to make sure the arrangements provide a safeguard," he said.

Senior British officials highlighted what they said was the sudden decision by some EU members to cancel a meeting of European finance ministers, set for Wednesday, as an example of the importance of ensuring EU processes are maintained.

"It is very important that the institutions of the 27 are properly looked after and that the (European) Commission does its job as the guardian of the 27," he said.

Cameron's efforts to safeguard Britain's voice in the EU comes at a sensitive time, with the prime minister berated last week by French President Nicolas Sarkozy for wanting to be involved but at same time pandering to eurosceptics at home by lecturing Europe from afar and gloating over the euro crisis.

The prime minister has come under intense pressure from his own predominantly eurosceptic ruling Conservative Party to use the euro crisis to push for the return of powers from the EU altogether.

Cameron insists that Britain's interests Brussels, amid wider calls for a vote on leaving are best served by staying within the EU, where he can better defend London's crucial financial services industry.

"London is the centre of financial services in Europe. It's under constant attack through Brussels directives. It's an area of concern. It's a key national interest that we need to defend."

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