MercoPress. South Atlantic News Agency

“I think I did the right thing for Britain”, says PM Cameron

Chancellor Merkel said she “regretted” the UK was “not able to go along the same path” as the rest of Europe

British PM David Cameron has defended his decision to block an EU-wide treaty change to tackle the Euro zone crisis, despite warnings it will leave the UK isolated.

It looks likely that all 26 other members of the European Union will instead agree to a new “accord” setting out tougher budget rules.

Labour said the UK would be left out of key decisions affecting its future. But the PM said the UK remained a “full and very influential member” of Europe on the issues that mattered to it.

German Chancellor Angela Merkel said she “regretted” that the UK was “not able to go along the same path” as the rest of Europe. French President Nicolas Sarkozy said Mr Cameron had made “unacceptable” demands for exemptions from EU financial regulation for the City of London.

Having failed to reach an agreement of all 27 EU members, the 17 Euro zone countries and the other EU states apart from the UK are expected to sign up to the new deal, which includes:

• a commitment to “balanced budgets” for Euro zone countries - defined as a structural deficit no greater than 0.5% of GDP - to be written into national constitutions
• automatic sanctions for any Euro zone country whose deficit exceeds 3% of GDP
• a requirement to submit their national budgets to the European Commission, which will have the power to request that they be revised
• Euro zone and other EU countries to consider, within the next 10 days, providing up to 200bn Euros to the International Monetary Fund to help debt-stricken Euro zone members

Mr Cameron said the abandoned treaty change involving all 27 members had been in danger of “distorting the single market”.

“I think I did the right thing for Britain,” he said. “We were offered a treaty that didn't have proper safeguards for Britain and I decided it was not right to sign that treaty.”

He added: “This does represent a change in our relationship with Europe, but the core of our relationship - the single market, the trade, the investment, the growth, the jobs that we want to see - that remains as it was.”

He said the UK was a leading European player in Nato and an important member of the single market - but was not in the Euro zone or the Schengen agreement on open borders.

“I think it's right for Britain to say: 'Well, which bits of Europe most benefit us as a nation?' and to focus on those things and I'm not frightened of the fact sometimes you might not be included in some things.”

He said on the “key decisions” that mattered - such as the single market and trade, Britain remained a “full and very influential member” of Europe.

The decision was welcomed by some of Mr Cameron's MPs. Mark Reckless said the PM had been “as good as his word” while Conservative Mayor of London Boris Johnson said Mr Cameron had “played a blinder”.

But Labour leader Ed Miliband said the prime minister had “mishandled these negotiations spectacularly”.

“It's a terrible outcome for Britain because we are going to be now excluded from key economic decisions that will affect our country in the future,” he said.

Mr Miliband said Mr Cameron had not “put in the hard yards of negotiation” that were necessary to build alliances and strengthen his position.

“What I find incredible is that he simply ended the negotiations yesterday and said that was it. He could have carried on negotiating today to get a better outcome for Britain.”

Foreign Secretary William Hague said earlier that signing up to the amended EU treaty would have led to the UK handing over more national sovereignty to Brussels. (BBC).