Skipper

The Euro-sceptic fault-line in the Conservative Party is again causing the Coalition government no end of grief. Cameron is being urged by his gung ho right-wing to repatriate powers from the EU back to London but Merkel and Sarkozy do not want to see a major EU power fragment existing arrangements and maybe encourage others to regard EU powers on a 'pick and mix basis.

Merkel, Sarkozy and the inner eurozone nations are hell bent on forming a much more disciplined inner core. Now not so long ago Cameron and Osborne agreed with such a development in a comment to the Liaison Cmmittee, 6th September. On the same day, Osborne, agreed, saying, “In the eurozone, member countries must follow the remorseless logic of monetary union and make more progress on institutional reform and fiscal integration. This is the only way to convince financial markets that the euro has a stable future,”

However, Cameron seems to have changed his mind and is now intent on avoiding a smaller more integrated euro-zone immune from UK influence. According to the London Evening Standard, the government's position has changed. It now:

"fears the formal "two-tier" EU Britain and is trying to avoid it is trying to avoid, for fear of being left outside key decision making in the non-eurozone margins British ministers are convinced a two-tier system, splitting the 17 eurozone member from the other 10, is unworkable, particularly the setting up of a separate treaty, European court and even a European parliament "second chamber" with legislative powers, as suggested by Paris.

"The pattern of relationships in the EU is much more complex than the model of two tiers suggests," said one government source. Neither the 17 in the eurozone nor the other 10 are monolithic or cohesive blocks - there are different constellations of relationships."

Britain is also dead set against the Tobin tax, unlike Gordon Brown who favoured it. Certainly it would raise millions but when 30% of financial transactions take place in London this might cause business to divert to other centres, to the UK's disadvantage.

In the event, the outcome of the meeting has proved a stalemate which will please nobody, especially Cameron's rabid right-wing who will gnash their teeth over his failure to extract concessions from what they view as a weakened EU leadership.