Two-speed Europe

After this weekend's EU summit, we are further away from a EU single market than ever and Britain looks to be on its own. This brings back to mind how Henry VIII separated England from Rome in 1534.

Theological history aside, what Cameron has disagreed with the other EU states means that Britain will be outside a new intergovernmental treaty that has the backing of EU's other 26 states.

Below is a summary of the treaty details:
- The EU commits to a new “fiscal rule” that will be legally enforceable and will seek limits on structural deficits
- States running large deficits will face automatic consequences including sanctions
- The EFSF leveraging will be deployed more quickly, using the ECB as an agent in transactions
- EFSF financing will remain active until mid-2013
- The ESM will enter into force with a target date of July 2012
- The overall ceiling of the EFSF/ESM remains at €500bn, but will be reviewed in Mar 2012
- The EU will ensure that ESM paid in capital is at least 15% of ESM issuances
- Member States have 10 days to confirm provision of additional €200bn in bilateral loans to the IMF
- The EU “look forward” to parallel bilateral loan contributions from the “international community”

Looks like the Prime Minister will win some plaudits from his backbenchers tomorrow, but in the long term, Britain's influence in Europe has started diminishing...

Eric Tan,
London