David Blackburn

Cameron’s euro battle is just beginning

Cameron's euro battle is just beginning
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David Cameron sold himself a hospital pass in Europe this week. His failure to secure a budget freeze has revealed that Britain's clout has been wildly exaggerated. The likely 2.9 percent budget increase is mildly inconvenient for Cameron politically, but it is immaterial in the grand scheme of the next round of budget discussions and the mounting wrangle about the Lisbon treaty.

He will have to compromise, as he did this week. He made some ground, finding allies to resist an untrammelled treaty change - the Irish, the Dutch, the Danes, the Czechs and the Poles. The biggest prize will be Sarkozy, whose antipathy towards Merkel is arch - the ongoing diplomatic and military discussions between Britain and France must be about more than sharing aircraftless carriers. 

Cameron will work with Merkel where he can on economic questions. The Germans will pay no longer and their resentment is Cameron's greatest weapon. The clauses Merkel seeks to stave off political disaster at home will be agreed, but subject to budget concessions. Cameron has made progress here, securing 10 signatures, including Merkel's (and Sarkozy) to agree that the EU's budget be restrained and Europeans' sense of entitlement curbed. That has laid the ground for a victory in the future.