Asked about the Prime Minister’s reaction to Angela Merkel’s call for fiscal union and treaty changes, the Prime Minister’s Spokesman (PMS) said he had not spoken to the Prime Minister since her speech. She was setting out broadly the same position on fiscal union as she had previously. As the Chancellor of the Exchequer had said fiscal union which flows logically from monetary union and clearly that was what the discussion in Europe was all about: how do you put in place a set of strong rules to govern fiscal policy in the Eurozone. European Council President Herman Van Rompuy would present a paper for the European Council next week which would look at this issue.
Asked if there would be a Treaty change by 27 countries as Mr Merkel had indicated, the PMS said he had not seen a read out of what she has been saying. The Eurozone needed to look again at the rules for dealing with fiscal policy. The Growth Stability Pact had not worked and it needed to be replaced with something else. It was right that the Eurozone was discussing these issues.
Asked if we were heading towards a two speed Europe and if the Prime Minister was comfortable with that phrase, the PMS said the issue for the UK was that we had appropriate protections in place for the single market. Some countries were members of the Euro and some were not; some opted into European legislation and some opted out. Asked if the single market would remain in place, the PMS said we needed to make sure that discussions among 17 countries did not in any way cut across the interests of the 27.
Asked if this was an opportunity for the UK, the PMS said the priority was for the Eurozone to put in place a set of rules that worked. We accepted the need for reform, and there was a general agreement that a new set of rules was required. A number of different options were being discussed at the moment.
Asked if it was inevitable that the UK would lose influence in Europe, the PMS said a successful and stable Eurozone was in Britain’s interests. We accepted that monetary union needed greater fiscal integration.
Asked if we could use any Treaty change to get some powers back, the PMS said there were a number of proposals being discussed and there will be a paper which sets out a number of options. The PMS said that we would seek to further our national interest and if there were negotiations on changes to the Treaty we would approach the negotiation in that way. At the moment we were waiting to see what proposals would be on the table.
Asked if the Prime Minister would be seeking a change to the working time directive, the PMS said the UK Government had an established view on the working time directive. The Coalition Agreement said we would work to limit the application of the working time directive in the UK.
Asked if reform of the Eurozone was more important than reclaiming powers, the PMS said that the UK would approach every negotiation in the same way - we would pursue the UK’s national interest. We wanted to see a stable Eurozone, a successful single market, sensible regulation of financial services. The PMS said there would be lots of negotiations in Europe in coming years and we would seek to further our national interest through the negotiations.
Asked if there would be a Treaty change, the PMS said there would be a discussion at the European Council and that he did not know what it would conclude.
Asked about President Sarkozy’s speech on Thursday 1 December in which he spoke about more qualified majority voting and substantial reform of Schengen, the PMS said we have views on both of those things, but that he had not seen the full translation of President Sarkozy’s speech. He added that President Sarkozy was talking about how the Eurozone should work; there is a discussion to be had about fiscal arrangements for the Eurozone and that was now underway.
Asked again about the extension of qualified majority voting the PMS said we had a position on the transfer of sovereignty from Westminster to Brussels: any transfer would be subject to a referendum.
Asked if extradition arrangements with the USA were unbalanced, the PMS said the Government’s position was that we had commissioned an independent review which was published on 18 October and we were considering the recommendations of that review.
Asked if the matter was at an end, the PMS said the review found the current system was appropriate, but we were considering the results.
Asked if the Government view had changed since the last Commons debate, the PMS said no, adding that the Home Office was looking into the findings of that review.
Asked if the Prime Minister had met the American ambassador in the last few days, the PMS said he did not think so.