UK gets set for battle to defend City from EU bank union
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Wednesday 12 December 2012
David Cameron and George Osborne will today begin a rearguard action to stop the City of London's status as the world's leading financial centre being threatened by plans for banking union inside the eurozone.
Although Britain will not join the banking union, the 17 countries in the euro will form a powerful bloc which could determine rules for the financial sector under the EU's single market. There are growing fears that the 17 will favour Paris and Frankfurt at London's expense.
In a report published today, an all-party House of Lords committee urges the Government to "go into battle" to protect London's "premier position" in Europe and the world. It warns that banking integration in the eurozone poses a significant threat to the single market.
Mr Osborne will discuss the banking plans with EU finance ministers today, before Mr Cameron seeks safeguards for the City at a two-day summit of EU leaders starting tomorrow.
A crunch issue for Britain is the voting power that the 10 non-euro members should enjoy on the London-based European Banking Authority (EBA), which harmonises rules across the EU. Its role could be expanded under banking union, making it easier for Britain to be overruled on regulations affecting the City.
Eight of the 10 "outs" want to join the euro, with only the UK and Denmark determined to stay out. Some EU countries are accusing Britain of demanding a "one-country veto" over banking decisions affecting the all 27 member states.
Britain rejects that charge, but is unhappy about the latest proposal on voting rights by Herman van Rompuy, president of the European Council, which is made up of the 27 EU leaders. It suggests that EBA decisions would be taken by a qualified majority, rather than requiring unanimity among the 27, but also need a simple majority of both the 17 euro "ins" and the 10 "outs". Britain, Denmark, Sweden, Poland, the Czech Republic and Lithuania want the voting bar set higher. But Germany, France, Spain, Belgium, Luxembourg and Austria say non-euro countries should have less power.
Today's report from the Lords EU sub-committee on economic affairs proposes that voting strength on the EBA reflect the size of member states' financial sector, which would boost the UK's clout. But Germany and other EU nations are likely to oppose that.
Lord Harrison, the Labour peer who chairs the sub-committee, said: "It is vital the UK Government get the negotiations right so that the banking union does not undermine the single market as a whole and the single market in financial service in particular, which is so vital to the UK and the City of London. And it must not threaten the position of the UK and other countries who choose to remain outside of the European banking union."
- 1 If I were Prime Minister: I'd give tax cuts to the rich, keep Trident, and get my football team wrong
- 2 Italian police 'reveal' what Jesus looked like as a young boy
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
- 5 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...