UK threatens to block new EU treaty if demands not met

(LONDON) - British Prime Minister David Cameron threatened on Tuesday to block a new European Union treaty designed to save the euro from the debt crisis if London's demands are not met.

Cameron said Britain's huge financial sector and the single market would have to be protected if he were to sign up to a new EU-wide treaty aimed at resolving the crisis in the euro, which Britain does not use.

His threat increases the likelihood that France and Germany, who proposed rewriting the treaty Monday, will end up pushing for an agreement between just the 17 nations who use the euro and not all 27 EU states.

For the EU treaty to be reformed to allow greater eurozone integration, all members of the bloc must agree.

Cameron's remarks are likely to anger under-fire eurozone leaders as they scramble to come up with a convincing rescue plan after the Franco-German proposal was overshadowed by Standard & Poor's threat of a debt downgrade.

He said his main aim at a crunch summit of European leaders in Brussels this week was "to defend and promote British interests", although he recognised it was in London's interests for eurozone leaders to quickly resolve the crisis.

"If they choose to use the European treaty to do that, then obviously there will be British safeguards and British interests that I will want to insist on," he said.

"I won't sign a treaty that doesn't have those safeguards in it, around things like, of course, the importance of the single market and financial services."

The British leader has come under pressure from the eurosceptic wing of his Conservative party to use the reopening of EU treaties to claw back powers from Brussels.

Central to British concerns will be protecting the City of London, one of the world's biggest financial hubs.

Britain has previously voiced opposition to a Franco-German plan for an EU-wide financial transaction tax, insisting any such measure must be applied worldwide to be effective.

Urging protection of other British interests, Cameron said: "Britain is a member of the European Union, we benefit from our membership of the European Union. Key to that is the single market."

He also said that if eurozone countries "choose to go ahead with a separate treaty, then clearly that is not a treaty that Britain would be signing or would be amending."

After a cabinet colleague called at the weekend for a referendum on a new treaty, Cameron was forced to insist Monday that a public vote was unnecessary as significant powers would not be passing from London to Brussels.

Under legislation passed last year, Britain must hold a referendum if such a transfer of power takes place.

The issue also threatens to cause tensions with the junior partner in Cameron's coalition government, the pro-European Liberal Democrats.

The issue of Europe has long been divisive for the Conservatives.

In October, Cameron suffered the largest rebellion of his premiership when 79 Tory lawmakers voted in favour of a referendum on Britain's relationship with Europe.

The government won the vote by 483 votes to 111 due to support from the Liberal Democrats and the main opposition Labour party.