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David Cameron faces clash with Conservative Eurosceptics

PM drops Britain’s objections to the use of the European court of justice to police tough new fiscal rules for the eurozone

David Cameron is facing a fresh clash with Tory Eurosceptics after dropping Britain’s objections to the use of the European court of justice (ECJ) to enforce a new fiscal compact for the eurozone.

Tory backbenchers met last night to prepare tactics ahead of a statement to parliament in which the prime minister will explain that Britain does not want to stand in the way of action to solve the eurozone crisis.

Cameron told EU leaders at their summit in Brussels that Britain was unlikely to raise any objections to the use of the ECJ to police tough new fiscal rules for eurozone members.

But he pledged to watch eurozone leaders “like a hawk” and to take legal action if they seek to use the court, or any other EU institution, to rewrite the rules of the single market.

Britain will officially reserve its position until a new eurozone treaty is formally ratified after 25 members of the EU, bar the UK and the Czech Republic, endorsed the new measure last night.

Speaking after the summit broke up, Cameron said: “We don’t want to hold up the eurozone doing whatever is necessary to solve the crisis, as long as it doesn’t damage our national interests.”

The prime minister said he would monitor the implementation of the new treaty. “It is in our national interest that the new treaty, outside the EU, does not encroach on the single market. We will be watching like a hawk. If there is any sign that they are going to encroach on the single market, then clearly we would take the appropriate action.”

Tory Eurosceptics accused the prime minister of annulling his vetoing of a revision of the Lisbon treaty last December, which prevented eurozone leaders from embedding the compact in the architecture of the EU.

Bernard Jenkin, the veteran Eurosceptic, said: “This nullifies the effect of the UK’s veto in December and demonstrates how a subset of EU member states can hijack the EU institutions for their own purposes, bypassing any dissenting state … The government cannot retreat from that now, or they will refuel demands for a referendum on the UK’s present terms of membership of the EU.”

The prime minister dismissed Jenkin’s criticism as bizarre. “There isn’t a Brussels EU treaty because I vetoed it. They [eurozone leaders] have had to make a treaty outside the EU. Obviously they’d prefer to have it inside the EU, which is why they are already talking about trying to bring it back inside the EU. So to argue that the veto doesn’t matter seems bizarre.”

Cameron added that eurozone leaders need to step up their efforts to rescue the euro. “Our national interest is that these countries get on and sort out the mess that is the euro.”

Conservative MEPs, who met the prime minister in Brussels before the start of yesterday’s summit, blamed Nick Clegg for forcing Cameron to change his mind.

Martin Callanan, the group’s leader, said: “I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the practical reality that this pact is actually quite hard to prevent.”

The Liberal Democrats will say they have achieved an important victory. The deputy prime minister, who was alarmed by Cameron’s use of the veto, made clear in December that the EU’s institutions would have to be put at the disposal of eurozone leaders.

As recently as 6 January the prime minister voiced doubts about the ECJ when he said that it “tends to come down on the side of whatever ‘more Europe’ involves”.

Labour added to the pressure on the prime minister by saying that his change of heart on the use of EU institutions showed that his actions in December had amounted to a “phantom veto”.

Douglas Alexander, the shadow foreign secretary, said: “The unanswered question after this summit remains what exactly David Cameron achieved by walking out of the EU negotiations last month? With the EU institutions now involved, it seems clear that all his earlier phantom veto achieved was to undermine British influence, and make it harder for Britain to protect its own interests in Europe and push for an effective solution to the eurozone’s problems.”

The prime minister sought to maintain the focus on the formal agenda of yesterday’s summit – how to promote growth across the EU. He was given a taste of the challenge when José Manuel Barroso, the president of the European commission, said Britain had the same number of young unemployed people as Spain, where almost one in two young people who are available for work is unemployed.

In a slide presentation, Barroso told the summit: “You can also see that the number of young unemployed is close to 1 million in Spain and in the UK. While the UK percentage is lower, 1 million unemployed young people is a big problem.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds