LONDON — When he rejected a new European accord on Friday that would bind the continent ever closer, Prime Minister David Cameron seemingly sacrificed Britain’s place in Europe to preserve the pre-eminence of the City, London’s financial district. The question now is whether his stance will someday seem justified, even prescient.

Mr. Cameron refused to go along with the new European plan of stricter fiscal oversight and discipline hammered out in Brussels this week, in great part because of fears that the City would be strangled by regulations emanating from Brussels. He evidently felt he had little choice, and given the virulence of the anti-Europe sentiment in his own Conservative Party, few were inclined to argue that point.

“I said if I couldn’t get adequate safeguards for Britain in a new European treaty, I wouldn’t agree to it,” Mr. Cameron said in a news conference. “What is on offer isn’t in Britain’s interests, so I didn’t agree to it.”

Mr. Cameron said as early as October that the City was coming under pressure from the European Union. Some lawmakers were concerned even then that Brussels would pass laws or financial regulations that would move lucrative financial services from London to Frankfurt or Paris.

“London is the center of financial services in Europe,” Mr. Cameron said in October. “It’s under constant attack through Brussels directives. It’s an area of concern; it’s a key national interest that we need to defend.”

But many experts questioned Mr. Cameron’s decision to take such a hard line, abandoning Britain’s traditional strategy of acting both within and without the European club.

The summit was “a disaster for the U.K.,” Charles Grant, director of the Center for European Reform, a pro-European research group here, said in a statement. “For more than 50 years, a fundamental principle of Britain’s foreign policy has been to be present when E.U. bodies take decisions, so that it can influence the outcome.” What should really worry London now, Mr. Grant said, is that it no longer has a seat at the negotiating table.

In the past, said Olaf Cramme, director of the Policy Network, a left-leaning research group in London, Britain has never lost a single European vote regarding financial service regulations. But since it has “taken itself out of these preparatory negotiations, even as others move closer together,” he said, it is likely to find it much more difficult to get its way.

It was clear after a marathon session on Thursday that Mr. Cameron had alienated his continental counterparts. Angela Merkel, the German chancellor, told reporters, “I really don’t believe David Cameron was ever with us at the table.” Nicolas Sarkozy, the French president, at one point snubbed Mr. Cameron in a hallway, refusing to shake his hand.

“The European Union is very much built on mutual trust, the relationships between leaders and the bonds of different countries,” Mr. Cramme said. “Cameron has taken a very tough line, and this will backfire.”

There was widespread confusion over how this would all play out. One view was that no matter what Mr. Cameron says, Britain will still be subject to European regulations, at least as far as Europe has jurisdiction over its non-British banks. Others doubted that the euro zone would long stand for having its main financial center in a nonmember country, and said it would inevitably begin directing its banking activities to Frankfurt or some other financial capital.

“The concern is that if the U.K. finds itself increasingly isolated,” said Bob Penn, a partner at the law firm of Allen & Overy. “You can see — if you’re a pessimist — that Europe could get its revenge on the U.K. by a whole array of bureaucratic and regulatory reforms.” In that scenario, Continental banks would be prohibited from dealing with the City unless the British firms adhered to Europe’s regulations.

Down that road lies Britain’s possible exit from the European Union, a prospect that many British Conservatives find positively alluring. “There is also an exciting sense that we are at the beginning of a very profound change in which our tortured relationship with Europe will be redefined, at long last,” said The Daily Mail.

An American banking industry official said he would not totally brush aside the possibility of retaliatory actions by Germany and France, but he said such responses were unlikely. After all, those countries have a long history of championing their global banks and would probably want to continue having an outsize presence in the City.

“The City has huge benefits for the E.U., and it’s not in the euro zone’s interest to see that evaporate and moved somewhere else,” Yael Selfin, a director at PricewaterhouseCoopers, said. “This is all part of a much longer bargaining process.”

London, many finance experts noted, is more an international financial center than a purely European one. Even if it were excluded from the euro zone, it would retain many of the attractions that have led Asians and Americans to locate major branches in London and to cut their deals by the Thames.

“It’s the time zone and the fact that English is their native language,” said an official at a European bank in New York. “That has not changed.”

In fact, many of the same questions about London’s competitiveness were raised when the euro zone was created, the official said, and Britain decided not to adopt the single currency but to stay with the pound. Despite fears that London would lose out to Frankfurt, the home of the European Central Bank, the City flourished.

It is possible, however, that over time financial firms may decide to stop investing in Britain, with new hires being placed in Zurich or Frankfurt rather than London. “In the worst case, they may face death by attrition,” one bank official said.

This is apparently the list of what Cameron wanted.

http://www.scribd.com/fullscreen/75193128

The last of those says that countries doing deals in the UK but with no other EU business be exempt from EU financial services regulation.

Funny that the others didn't agree to that, isn't it? It treats Britain as not being in the EU for this purpose. Maybe the others should treat the British exports Osborne wants as not being in the EU, and stick a tarrif on them. Did he think this would be accepted? Seriously?

Labour's Jack Straw says EU leaders had a draft conclusion before them last week. What are the paragraph numbers of the clauses that would damage Britain? And can Cameron confirm that the treaty would not have affected the qualified majority voting rules affecting financial regulation.

Cameron says his judgement was that a new treaty was more of a threat to Britain than an inter-governmental agreement.

John Redwood, the Tory Eurosceptic, congratulates Cameron on the outcome of the summit. He says that Labour was too willing to give in.

Peter Lilley, the former Conservative cabinet minister, says that in Europe, it is best to set out your position in advance and then stick to it.

Cameron says he agrees.

Bill Cash, the Conservative Eurosceptic, says Cameron exerted all his influence to protect Britain. To adapt Pitt's phrase, does he believe Europe will learn from his example?

Labour's Sir Stuart Bell asks what Cameron is doing to help the eurozone.

Cameron says he does not think Britain should be helping Greece. But Britain is a generous country. It has lent £5bn to Ireland.

Bernard Jenkin, a Conservative, says that despite what the BBC says, Cameron's move has the support of the public.

Andrea Leadsom, a Conservative, says Labour do not understand the importance of financial services.

Nadine Dorries, a Conservative, accuses Nick Clegg of cowardice for not turning up in the Commons today.

Cameron says it's best not to antagonise your coalition partners.

Jacob Rees-Mogg, a Conservative, says that Cameron is the toast of Somerset because he stood up for free markets and democracy.

Nicholas Soames, a Conservative, says some businesses in his constituency are concerned about what happened. Will Cameron reassure them that Britain will continue to play a key role in the EU?

Cameron says Britain's role in the EU is unchanged.

Labour's Kate Hoey says a majority of Labour voters support what Cameron did. Shouldn't Britain be more internationalist?

Cameron says he has great sympathy with this view. Britiain should be restoring its links with other parts of the world.

Labour's Willie Bain asks if Cameron has more or fewer allies in Europe now.

Cameron says he has a huge number of allies in Europe, not least because of the 27 countries around the table, only four are run by socialists.

Current protestations allowing Clegg to speak is contrived by Tory Central Office. This is similar to an episode from Only Fools & Horses.
Scene One: Act Two

Dell Boy (Cameron) upsets the Driscoll brothers in Europe with natural consternation in Tower Hamlets.

Rodney (Clegg) rises to Dells defence on 9/12/2011.

Uncle Albert in Central Office has a word in Rodney's 'shell like' on the 'QT' saying: 'Its not good for you to be too close to Dell with this trouble & strife son'.

Two days later Rodney has a right go at Dell in the papers giving him a proper '2 & 8'!

The Lib Dems are pleased to see their leader still has a pulse. The Tories are pleased because Dell put one up the euro.!

And so everyones happy and Rodney still has use of the Ministerial Reliant Robbin.