Cameron sees 'legal difficulties' in fighting new fiscal treaty

Cameron, whose veto on EU treaty changes in December led to the creation of this new inter-governmental pact, told BBC 4 Radio on Friday that there are "legal difficulties" over blocking the 26 members from using the EU institutions.

"Part of the problem is that the legal position is unclear. One of the strengths of there not being a treaty within the European Union is that the new thing, whatever it is, can't do things that are the property of the European Union."

The British leader vowed to do "everything possible" to ensure that the single market and competitiveness were not discussed outside the full EU framework.

"We will be very clear that, when it comes to that, you cannot use the European institutions for those things because that would be wrong. You can't have a treaty outside the European Union that starts doing what should be done within the European Union, and that goes back to the issue of safeguards."

Asked what he had achieved for the UK through his veto, Cameron said: "What I stopped was that if you have a treaty within the framework of the European Union that didn't have safeguards on the single market and on financial services, Britain would have been in a worse position. I am not making some great claim to have achieved a safeguard, but what I did do was stop a treaty without safeguards."

Cameron's stance was criticised domestically not only by the Labour opposition but also by his Liberal governing partner and vice-premier Nick Clegg, who warned against Britain being "isolated" in Europe after the veto.

France's Nicolas Sarkozy reportedly called Cameron an "obstinate kid" for insisting on safeguards which ultimately would have benefited only bankers and traders, while Angela Merkel suggested the British leader was negotiating in bad faith. "I really don't believe David Cameron was ever with us at the table," she said at the time.

EU officials privately point to the equally intransigent Merkel's insistence on a full treaty change, which has become a "political mantra" in Germany, when much of the fiscal rules could have been dealt with through other legal ways, instead of creating this "mess" of a new treaty at 26-level but relying on EU institutions.

EUobserver understands that a legal u-turn by the council's own legal services also left Cameron in the cold, as his line of defence was based on an initial assessment that EU member states cannot use the community institutions outside the EU treaties.

As for the EU commission itself, it took a cautious line on Friday on the matter. "The enforcement capacity of this international treaty is a matter that should be decided at the end of negotiations based on the provisions in the text," commission spokesman Olivier Bailly said during a press conference.

German centre-right MEP Elmar Brok, who participated as an observer at the talks on Friday on the new legal text, told this website on the issue of involving the EU commission that "nothing is decided until everything decided."

But he was confident that in the end, the EU executive would get an "even stronger role" than the current wording which allows it to take countries to court "on behalf" of other signatories to the fiscal pact. "It's still an ongoing process," he said after the meeting, as more follow-ups are being scheduled in the coming two weeks.

As for Cameron's opposition to using EU institutions, Brok, a long-standing federalist said: "He should go to the European Court of Justice then."