By: Dr. Mike Campbell

The EU leaders’ summit is still continuing, but the slim chance that all 27 EU nations would agree to Franco-German proposals aimed at fostering tighter fiscal union has gone. Britain and Hungary declared that they would not agree to the proposal as outlined; Sweden and the Czech Republic will refer their participation to their respective parliaments.

UK Prime Minister David Cameron, had sought assurances aimed to protect the interests of the City of London as a condition for participating in the accord, but his EU partners were not prepared to grant them. The 17 Eurozone nations and six other countries which aspire to join the Euro at some stage, will work towards strengthening fiscal union within the block. Inevitably, this will trigger concerns of a two-speed Europe with the UK on the periphery.

The major sticking point was Mr Cameron’s insistence that the UK should be granted an opt-out on any changes relating to financial services (such as the proposed 0.1% EU wide financial transaction tax), but this was a bridge too far for the Eurozone group. Cameron made it clear that the UK sees resolution of the Euro crisis to be in its own interests, but he was not prepared to sacrifice national interests to the common good to the extent required. "We wish them well because we want everyone to sort out their problems because we all need that growth, but at the end of the day I made my judgment that it was not in Britain's interests. I effectively wielded the veto," Mr Cameron said. The political wisdom of being seen to “wield a veto” to obstruct restoring confidence to the markets and starting (at least) to draw a line under the European sovereign debt crisis is not easily seen in the bigger scheme of things, but no doubt it will play well in the UK tabloids.