Cameron to push 'growth agenda' at EU summit

David Cameron will today urge a big push for jobs, growth and trade across Europe at another EU summit overshadowed by the Greek economic crisis.

The meeting is intended to revive market confidence by looking at the economic “big picture”.

A statement due to be agreed by EU leaders warns that months of efforts to restore financial stability in the eurozone is not sufficient.

“We have to actively enhance growth and competitiveness, so as to create jobs, preserve our social models, and ensure the well-being of our people,” the document says.

But new tensions over Greek efforts to qualify for a second massive cash bail-out and avoid default on its debts is hindering efforts to move the focus onto longer-term recovery.

The Prime Minister has used a series of pre-summit events to urge the rest of Europe to get behind a jobs and growth agenda, boost trade and complete the EU single market.

But his refusal at an EU summit last month to back treaty change to boost eurozone discipline has soured the mood, with relations still rocky, particularly with France.

Now German proposals for EU control of Greek sovereign tax and spending decisions have raised new tensions with Athens as well as giving British eurosceptics fresh ammunition against Brussels.

On the eve of the summit Greek ministers angrily rejected losing sovereign budget control, raising new questions about the chances of agreeing a Greek bail-out of 130bn euros (£109bn) before a March deadline for the next Greek debt repayment.

Today's “informal” summit gathering will have little time to resolve a series of disputes - it is scheduled for little more than three hours, with no firm decisions expected, and another, formal, summit already on the diary in early March.

Mr Cameron made phone calls last week to EU Commission president Jose Manuel Barroso and EU Council president Herman Van Rompuy emphasising the need for “bold action” to restore Europe's competitiveness.

A Downing Street spokesman said Mr Cameron had urged that today's meeting should “concentrate on how the EU can support economic growth across the continent and set specific targets to liberalise EU trade with other markets and to reduce the burden of EU regulation on business”.

The first summit session this afternoon will focus on growth and competitiveness, but then talks turn to the details of a new “fiscal pact”, which does not involve the UK thanks to Mr Cameron's veto last month of a 27-nation treaty change.

Key issues are the scope of new sanctions on eurozone nations breaking debt and deficit rules, and the formation of monthly eurozone-only summits while the crisis continues.

Mr Cameron's concern is that those meetings, seeking deeper fiscal and political union among the 17 eurozone states, do not stray into single market areas which could affect the UK, particularly its role as a financial centre.

Yesterday Work and Pensions Secretary Iain Duncan Smith insisted that the Prime Minister would carry out last month's threat to block the eurozone countries from using institutions paid for by EU nations to carry through any decisions reached at such meetings.

The former Tory leader said he had absolute “trust” in Mr Cameron to stick to the ban, amid mounting speculation that he is rowing back on the pledge.

He said Mr Cameron had vetoed the others using the institutions, such as the Commission and European Court of Justice, “because we had no guarantees that what they are proposing would not damage the single market, or for that matter, would actually cause problems for the financial sector”.

He added: “He (the PM) stands on the basis that we must protect the single market, we want them to get their economies sorted out because that's causing us problems over here but we do not want them thrashing around the very thing that we set up, which was the access to the market place and the free flow of capital in the financial sector.”

Mr Duncan Smith also took a swipe at Germany's proposal for an EU budget commissioner with veto powers over Greek taxes and spending.

He said: “You need to be very careful about how you deal with sovereign states and their ability to govern themselves and I know the Prime Minister has said this to them, and I think as one of the great historical democratic nations, we should always stand up for democratic freedoms all over Europe.”

The Prime Minister's hardline stance at last month's summit provoked widespread anger among Liberal Democrat MPs, with former leader Charles Kennedy today warning the party would not tolerate a repeat performance at the latest meeting.

In a letter to the Guardian he urged Mr Cameron to take an active and confident role at the heart of the EU, saying: “We want to see the British government work with our EU partners to make the EU a vehicle for growth and employment. Britain's place is at the centre where decisions are made.”

Foreign Secretary William Hague told the BBC Radio 4 Today programme that the UK would not formally veto use of the EU institutions by the fiscal pact group.

"This group cannot cut across the EU treaties," he said.

"If the use of the EU treaties at any point threatens Britain's fundamental rights under the EU treaties, or damages our vital interests such as the single market, then we would have to take action about that, including legal action.

"So we will reserve our position on the specific question about the use of the court.

"We are not signing a treaty that permits that."

Downing Street insisted that Britain's position on the use of the institutions - such as the European Court of Justice and the European Commission - to support the fiscal compact had not changed.

Following his dramatic refusal to sign a treaty of all 27 member states at last month's summit, Mr Cameron indicated that he would not allow the institutions to be used to support an agreement of 26 if there was a danger it would cut across existing treaties or undermine the single market.

A Downing Street spokeswoman said today: "The Prime Minister has always been clear that we want to be constructive and open-minded in our approach, but that we will be vigilant to ensure that our national interests are protected. The position hasn't changed.

"Our national interest is to ensure that the single market is not undermined."

The Prime Minister arrived at the summit this afternoon insisting on the need to "get really serious" about jobs and growth across Europe.

He said the key was to complete the single market, establish global trade deals and make serious efforts to reduce red tape for small business.

He said: "That's the agenda I shall be pushing (at this afternoon's summit talks) and I hope to find a lot of support."

Leader of Britain's Tory MEPs Martin Callanan acknowledged this afternoon that Government policy on the fiscal compact had changed - partly because of a need to mollify Nick Clegg, he said.

Mr Callanan commented: "There is no doubt that the Government's position has altered since the December summit when they were insisting the institutions could not be used.

"I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the practical reality that this pact is actually quite hard to prevent: the Government would have to ask the European Court of Justice to rule against itself having a role."

He added: "Any action could easily take two years, we would probably lose and, if the euro collapsed in the meantime, the UK would get the blame.

"It's particularly ironic when the EU lectures developing countries about the importance of good governance and the rule of law."

European Parliament president Martin Schulz told the summit to address issues of concern to the public.

He warned: "Our fellow citizens cannot understand why, in the midst of the crisis, we should be arguing about arcane matters such as institutions and Treaty articles.

"They are looking to us to provide answers to their everyday problems.

"If we don't come up with those answers, confidence in political institutions, at both national and European level, will be undermined even further. It is time to talk about how we are going to lead Europe out of the crisis."

PA