Cameron and Clegg disagree over rebalancing of powers with EU
Clash reveals Lib Dem concern that the prime minister will be pushed into demanding full repatriation of powers
David Cameron and Nick Clegg clashed over the need to rebalance powers between Westminster and Brussels, with the prime minister claiming work was already under way in Whitehall, and his deputy insisting: "We are nowhere near that point."
The difference reflects a Lib Dem anxiety that Cameron will be pushed into making premature demands for a repatriation of powers in the face of a development of a two-speed Europe, with an inner euro-core at the centre of policy making.
Clegg said: "I'm very clear there's no question of us unilaterally repatriating powers from the European Union. That simply isn't on the cards. It wouldn't work. If there is going to be a debate about the rebalancing of powers between the EU and all its member countries our priority as a country will be to promote British interests and particularly the kind of open economic reforms that I think are necessary for jobs and growth in this country. But we're nowhere near that yet because we don't even know whether these treaty changes are really going to take place."
Cameron, at the Commonwealth summit in Australia, said: "We are looking at the balance of powers. That work is now under way in Whitehall. I think it is right that it looks at the different powers that are exercised in Brussels and Westminster. The coalition agreement also says there is no question of powers being passed from Westminster to Brussels."
The two men are nevertheless working hard to try to develop a common front to resist EU directives on the City. Cameron indicated he was even prepared to use the UK veto to protect the position of the City of London in any future EU treaty negotiations on shoring up the euro.
Clegg took a more cautious position saying: "Everybody agrees that after the spectacular implosion in the City of London in 2008 we need to get regulation better, because that was a failure of regulat! ion. And some of that, not all of it, has to take place at European level.
"But the devil's in the detail, and some of the details, frankly, aren't quite right. Some of the details disproportionately affect Britain compared with other countries and of course we want to make sure there's a proper open level playing field for the City of London and for all British businesses in all sectors."
He said the best way to protect British interests was by "making sure that there is a loud British voice at the top table, at the heart of the EU, even as it changes, as it will change in the months and years ahead, as the eurozone sorts itself out.
"One of the ways that we can do that is not by sort of cowering on the sidelines, but actually actively arguing for open, competitive liberalisation in the single market, which is after all the world's largest borderless single market of 500 million consumers right on our European doorstep, which is of massive benefit."
Cameron said: "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."
Ministers are currently involved in lengthy EU negotiations as Michel Barnier, the European internal market commissioner, presses for a series of financial services regulations.
Britain is concerned about the European markets infrastructure regulation, which deals with derivatives, and the markets in financial instruments directive, which would create a new category of trading venue.
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