Cameron talks tough over EU's threat to City

City of London feels under threat from EU directives
City of London feels under threat from EU directives

By Alex Stevenson

David Cameron says the City of London is a "key national interest" that needs protecting from the EU.

The prime minister told journalists on the way to a two-day summit of Commonwealth leaders in Australia that the City was "under constant attack through Brussels directives" and that he viewed the issue as an "area of concern".

The European Union is moving forward with its plans for a financial transactions tax, favoured by the 'Robin Hood tax' campaign, which traders fear could deter international companies from investing on European stock exchanges.


London is by far the largest of Europe's trading centres, meaning the tax would hit Britain's markets - and therefore the broader economy - hard.

Concerns about the growing influence of Europe were reinforced this week as the 17 eurozone countries appeared to favour closer fiscal integration - an approach advocated by chancellor George Osborne as the only logical way of maintaining the euro.

"There are a lot of things the eurozone is doing together," the prime minister added.

"Having more meetings alone, establishing machinery – it raises the question of could there be caucusing?"

Increased prospects of a 'two-tier' European Union come at the end of a bruising week for Mr Cameron, who suffered a huge backbench revolt over Europe on Monday.

The need for him to be seen to be standing up for Britain's interests in Europe has intensified as a result.

Mr Cameron's authority has clearly eroded among Tory rebels, while stories have even emerged about members of the Cabinet being extremely frustrated about Monday's vote.

Work and pensions secretary Iain Duncan Smith reportedly had a stand-up row with chief whip Patrick McLoughlin about the issue, in which he threatened to resign if put in a similar position again.

Mr Duncan Smith, appearing on BBC1's Question Time programme last night, denied such a clash had ever taken place.

"I haven't had that kind of conversation with the chief whip but that shouldn't stop the press having a good time with it," he said.

Meanwhile, Wednesday's emergency summit in Brussels saw the creation of a package to deal with the eurozone's debt crisis, which includes a controversial extension of the European Financial Stability Fund to one trillion euros.

Attempts to convince China to help provide the financing for the reinforced fund are getting underway today.

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