Britain should lose its power to veto some of Europe's important economic decisions, the European Commission said yesterday, in the clearest evidence yet that the Treasury could be sidelined if Britain stays outside the euro.
Pedro Solbes, the commissioner for economic and monetary affairs, called for a substantial boost to the powers of the 12 finance ministers from countries that are members of the single currency.
At present, the ministers meet informally in the so-called eurogroup and cannot take any final decisions. These have to be referred to the full Ecofin council of all 15 EU finance ministers, which includes the UK.
But in a speech yesterday, Mr Solbes called for the "creation of an Ecofin council for the eurozone – a clear institutional response to help take decisions in the eurozone". This would, he said, mean reconstituting the Ecofin council when decisions on policy in the eurozone were taken – excluding those outside the euro.
Such a deal, which could be agreed as part of a plan to re-write the EU's main treaty in 2004, would undermine a pact reached with the Chancellor, Gordon Brown, in Luxembourg in 1997. Mr Brown, who had argued for a British seat inside the eurogroup, had to accept that he would be left on the outside. He insisted that any formal decisions would have to be referred to Ecofin.
Since the launch of the euro the compromise has been under strain as the eurogroup grows in importance. Earlier this year a leaked letter from Britain's permanent representative in Brussels, Sir Nigel Sheinwald, underlined the extent to which the UK worries it may become sidelined.
In his speech to members of Valerie Giscard d'Estaing's convention on the future of Europe, Mr Solbes also called for a strengthening of the powers of the European Commission.
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