French-German Rejection Points to Cameron Isolation on EU

Germany and France rebuffed U.K. Prime Minister David Cameron’s attempt to customize the terms of membership in the European Union and vowed not to let Britain stand in the way of the overhaul of the euro currency.

Cameron’s call today for a new EU deal drew rebukes from government leaders in Berlin and Paris that demonstrated how the debt crisis is driving the 17 euro countries closer together, no matter whether the U.K. stays in the broader 27-country bloc.

“A policy of cherry-picking is not an option,” German Foreign Minister Guido Westerwelle told reporters in Berlin today. Bernard Cazeneuve, France’s European affairs minister, rejected Britain’s vision of a “Europe a la carte.”

Cameron’s plan for a U.K. vote by the end of 2017 on whether to stay or go forced leaders across Europe to take sides, underscoring Britain’s isolation and showing how most European countries see their future as part of a revamped euro area built around Germany and France.

“Germany wants an ambitious reform of the economic and monetary union in such decisive issues as the future of our common currency,” Westerwelle said. “We do not need less, but more integration.”

Cameron’s address at Bloomberg LP’s European headquarters in London entered the annals of the island nation’s soul- searching over its place in Europe, a tradition dating to Winston Churchill’s plea for a United States of Europe in 1946.

The underside of Churchill’s appeal was that as Europe felt its way to unity after two world wars, Britain would stand aside. It stayed out of European integration in the 1950s and was twice blocked by France in the 1960s. It didn’t join until 1973.

Election Hurdle

Cameron offered the next twist in that saga by proposing an in-or-out referendum as long as his Conservative Party returns to power after the 2015 election. Both his coalition partner, Liberal Democrat Deputy Prime Minister Nick Clegg, and opposition Labour Party leader Ed Miliband rejected the plans.

By making the EU a two-year campaign issue, Cameron risks being overwhelmed by an anti-European groundswell that is impossible to control, European Parliament President Martin Schulz said.

Cameron “is playing a dangerous game for tactical, domestic reasons,” said Schulz, a German Social Democrat. He “resembles the sorcerer’s apprentice, who cannot tame the forces that he has conjured -- forces that want to leave the EU for ideological reasons.”

‘Pandora’s Box’

The rest of the bloc “can hardly accept an opt-in and opt- out policy, which would open a Pandora’s box for other countries,” Michel Petite, a lawyer at Clifford Chance and former head of legal services at the European Commission, said in a speech at the World Economic Forum’s annual meeting in Davos, Switzerland.

Cameron experienced the risks of grandstanding to so-called euroskeptics at home in his handling of a European deficit- limitation agreement, one of the measures to combat the debt crisis. He went into a December 2011 summit determined to lead the opposition to the accord, only to find the Czech Republic as his sole ally.

There were echoes of that betrayal across Europe today. Cameron’s initiative found little backing in Denmark, which joined the European bloc at the same time as the U.K. and shares with Britain the legal right to stay out of the euro.

‘Walk Alone’

“If Great Britain should decide to scale down its membership or leave the EU, the U.K. must walk this path alone,” Danish European Affairs Minister Nicolai Wammen said in a phone interview in Copenhagen. “It’s in Denmark’s interest to be as close as possible to the core of Europe.”

Cameron’s call for the repatriation of powers met the sharpest resistance in the EU Parliament, which has a voice over most business legislation including the financial-market regulations that are key to Britain, Europe’s banking center.

First directly elected in 1979, the parliament’s power to co-decide EU legislation with national governments was strengthened in treaties, ratified by Britain, that took effect in 1993 and 2009. It routinely claims to be the sole voice of the European people in EU-level lawmaking.

Cameron challenged that assertion, saying there is no “single European demos” and national parliaments will remain the representatives of the 27 different popular wills. The debt crisis has borne that out, with parliaments from Berlin to Athens determining the fate of the euro.

Cameron appealed for a “new settlement” that would give Britain some things it already has -- an exemption from paying into euro-zone rescues, which he mentioned twice -- plus other things he said won’t be identified until the U.K. government conducts a review of EU powers.

Common Regulations

Critics responded that the single market, Britain’s foothold in the EU’s $17 trillion economy, only works because it is made up of common regulations -- on drug approvals or cross- border bank transfers, for example.

“The British economy is highly interdependent with the rest of Europe,” John Nelson, chairman of Lloyd’s of London, the world’s oldest insurance market, said in an interview in Davos. “It’s very important we’re there. My guess and hope is common sense will break out and we’ll stay.”

Italian Prime Minister Mario Monti agreed, telling delegates at the World Economic Forum’s annual meeting in Davos, Switzerland that he expects U.K. voters to throw in their lot with the EU.

“If there is to be referendum one day, I think the British citizens will choose to remain within the EU and continue to contribute to shape their future,” he said. “I think the EU does not need unwilling Europeans. We desperately need willing Europeans.”

Some, like French Foreign Minister Laurent Fabius, sought to take advantage of Britain’s polemics, telling businesses to relocate in order to maintain a berth in the European market.

“If Great Britain decides to leave Europe, we will roll out the red carpet for you,” Fabius told a U.K. business group recently, he recounted on France Info radio today.

For Related News and Information: Top U.K. stories: TOPB Stories on U.K. politics: TNI POL UK Stories on the U.K. and the EU: TNI EU UK

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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