Britain to review impact of EU laws

(LONDON) - The groundwork is under way for a review of the balance of powers between Britain and the European Union, the Foreign Office said Thursday.

The ministry confirmed that preparatory work for such a review is "ongoing", following reports in the Financial Times newspaper of a planned audit on the impact of EU law in Britain.

The development comes as Brussels hosts an EU summit seen as crucial to the future of the eurozone.

The FT said the review, to be to be launched by Foreign Secretary William Hague, could push forward a drive by members of Prime Minister David Cameron's Conservative Party to repatriate powers from Brussels.

The promise to examine the "balance of competences" is contained in the coalition agreement drawn up in May 2010 between the governing Conservative and Liberal Democrat parties.

"We are committed, under the coalition agreement, to examining the balance of competences between Britain and the EU," a Foreign Office spokesman said.

"Work has been under way for some time to determine what form that review should take and we expect to set out further details soon."

European leaders are meanwhile preparing to meet at a summit in Brussels on Thursday in the latest attempt to find a solution to the spiralling eurozone crisis.

Many Conservative lawmakers want to renegotiate Britain's EU membership in order to claw back powers from Brussels such as employment laws, fisheries policy and judicial competences.

But Cameron, who rejected a new European fiscal pact strengthening budget policy cooperation across the EU, is torn between pressure from the eurosceptics within his party and his more europhile coalition partners.

Any move to renogotiate EU membership would face fierce opposition from Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, who has said distancing Britain from the bloc would be "economic suicide".

Graham Mather, president of the London-based European Policy Forum, welcomed the idea of an audit.

"I think that it will reveal in Britain that we are happy with many EU laws and regulations which, of course, we negotiated," he said.

But he added that any review was likely to highlight discontent with the employment and social laws, including the working time directive and rules on redundancy.

"A lot of those were really designed for a different economy in which growth was assumed to be happening," he said.