Tories at war over Europe as sceptics told: ‘sober up’

David Cameron vows to face down Eurosceptic MPs as eurozone finance ministers close in on cash deal for banks The Conservative party has descended into open warfare over Europe as David Cameron vows to face down the expanding ranks of Eurosceptic MPs demanding a referendum on the UK’s EU membership. Ahead of a Commons vote on Monday that is likely to see the biggest revolt of Cameron’s premiership so far, with up to 60 MPs defying the whip, Downing Street struck a defiant note, insisting that the prime minister would not give an inch to the rebels. “We have to have a fight on these issues some time and there is no time like the present,” said a senior official. “People have to sober up. Having a referendum on membership is not our policy.” In a high-risk move that could inflame sentiment in the party even further, the prime minister will stick by his insistence on a three-line whip, effectively ordering MPs to reject the referendum motion. Downing Street said the prime minister would take a “dim view” of those who defied him, and indicated they could say goodbye to chances of promotion. As Tory MPs voiced their disgust at the stance, former Tory leadership contender and ex-minister for Europe David Davis suggested the government was fighting shy of a referendum because it fears the British public would vote to leave the EU or drastically change the terms of membership. In a message to Cameron and his ministers, Davis said: “Do not refuse the people their right to answer the question just because you’re afraid of what the answer could be.” Another senior MP, the Tory chairman of the public administration committee, Bernard Jenkin, said that if Cameron did not lift the three-line whip, the Conservative party would become “irrelevant in the eyes of voters”, many of whom were deeply concerned about the EU and wanted a say. In a further development that will fuel the Eurosceptic fire, one of the most vocal proponents of the European single currency, Lord Turner, admits he was incorrect to propose that the UK should have joined the euro at the start of the last decade. “I got it wrong,” Turner tells the Observer in an interview . Turner, who is now chairman of the Financial Services Authority, led a vociferous campaign for the UK to join the euro while he led the employers’ body, the CBI, during the late 1990s – and in 2002, when at City firm Merrill Lynch, he co-authored a seminal paper on “Why Britain should join the euro”. Downing Street said the prime minister was very sympathetic to the wider Eurosceptic cause and would fight for powers to be repatriated if and when a new treaty was negotiated. But, with the eurozone in crisis, the UK had to play its part now in sorting out the mess, rather than being distracted by a referendum. Nick Clegg, who has been demanding that EU leaders concentrate on long-term growth and competitiveness, said talk of a referendum was a “dangerous form of displacement activity”. Clegg said: “I think we have to deal with the emergency on our doorstep, rather than tilting at windmills.” As chancellor George Osborne joined fellow finance ministers in Brussels, it emerged that the EU could tap sovereign wealth funds from Asia and the Gulf in order to boost its financial firepower to bail out countries suffering debt distress in an attempt to prevent the contagion spreading. Finance ministers from the 17 eurozone countries are discussing the option of creating a “special purpose vehicle” for the European financial stability facility (EFSF) in order to boost its current €440bn [£383bn] lending capacity. This emerged as finance ministers from all 27 EU countries approved in principle plans to recapitalise some of Europe’s most important banks with around €90bn, so that they can withstand contagion from potential debt problems in other eurozone countries. Banks are also being told they face losses, or “haircuts”, of at least 40% on their exposure to Greek debt, according to ministers. Senior EU officials have been dispatched to speed up negotiations with holders of sovereign bonds. But one source cautioned: “Nothing has been agreed until everything has been agreed.” Desperate EU leaders are trying to stitch together a “comprehensive and ambitious” deal to solve the sovereign debt crisis over the next few days, starting with an EU summit, at which David Cameron will be present, and then a eurozone summit later today. A deal is due to be sealed at a second eurozone summit on Wednesday, but rumours have swept Brussels that yet another summit, possibly extended to non-euro countries such as Britain, could also be called. The idea of creating a special purpose vehicle for the EFSF, according to sources, would be to attract further money from both official and private investors, with the sovereign wealth funds of countries such as China, Singapore or Qatar a prime target. Some of these already invest in European banks such as Barclays and UBS. Qatar has already invested in distressed Greek banks and is thought to be looking at other devalued European assets. Its premier, Sheikh Hamad bin Khalifa al-Thani, said of EU efforts to solve the crisis: “If there is nothing positive then we will find a very difficult situation, not only in Europe but in the world, that would take a decade to fix.” Downing Street officials said Cameron, who will attend a meeting of EU heads of government in Brussels today, might cut short a visit this week to New Zealand and Australia, where he is due to attend the Commonwealth heads of government conference, if a further, full EU summit of all 27 nations is called. Conservatives European Union Europe David Davis European banks Banking David Cameron Toby Helm Jill Treanor David Gow guardian.co.uk

Posted by on October 22, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.