Lib Dems crow over Cameron's retreat on veto as Tories seethe

The PM tries to laugh off criticism from Tories over his European retreat (PA)

Liberal Democrats rubbed salt in the wounds of Conservative Eurosceptics yesterday by praising David Cameron’s retreat over the deal to impose budgetary discipline in the eurozone.

As the Prime Minister came under pressure from Tory Europhobes in the Commons, senior Lib Dems praised his pragmatism after he allowed the 25 nations who have signed a “fiscal compact” to use EU bodies including the European Court of Justice and European Commission. In December, Mr Cameron had claimed this could be illegal after he vetoed a 27-strong new treaty. But on Monday he angered many Tory MPs by nodding through the compact.

Yesterday’s praise from the Lib Dems was in stark contrast to the Prime Minister’s frosty reception from them after the December summit. Nick Clegg, furious about Britain’s isolation, refused to attend the Commons statement about it. Yesterday he was at Mr Cameron’s side after persuading him to “re-engage” with Britain’s EU partners and to allow them to use EU bodies after all.

Although the Deputy Prime Minister issued a “no crowing” edict to his party, some Lib Dems could not hide their delight that Mr Cameron had backed down from his hardline stance. Simon Hughes, the Lib Dem deputy leader, welcomed the Prime Minister's actions at “a much more successful and satisfactory summit” than the previous one. In a sideswipe at Tory Eurosceptics, he said the EU should focus on jobs and growth, not “obsessing” about constitutional niceties.

Sir Menzies Campbell, the former Lib Dem leader, welcomed Mr Cameron's “pragmatism” at this week’s summit, saying he had “pursued a policy of re-engagement with our European partners”.

Ed Miliband, the Labour leader, told the Commons the veto had been exposed as a “phantom”. He said: “With this Prime Minister a veto is not just for life, it's for Christmas…It talks like a European treaty, it walks like a European treaty, it is a European treaty.”

Tory Eurosceptics challenged the Prime Minister over his retreat. Mark Reckless asked him pointedly: “Would you explain what it is that you vetoed?”

David Nuttall asked Mr Cameron: “Can you explain how the United Kingdom in practical terms will actually be able to prevent those countries which sign up to the fiscal union treaty from utilising the European Commission and European Court of Justice in such a way that would damage UK interests?”

Bernard Jenkin complained that a “subset of [EU] member states can bypass a veto, hijack their institutions for their own purposes without the consent of a dissenting member state”.

Mr Cameron insisted it was in Britain’s national interest to allow the fiscal compact to go ahead to bolster the euro. He said: “This is a treaty outside the EU. We are not signing it. We are not ratifying it. We are not part of it. And it places no obligations on the United Kingdom. It does not have the force of EU law for us, nor does it have the force of law for the EU institutions, or the force of EU law for the countries that have signed it. And there will be no inner group of European countries distorting the Single Market from inside the EU Treaty. That is the fundamental protection we secured with our veto in December – and that protection remains.”