It is becoming increasingly clear what the Conservative party expects of its Prime
Minister. If he is going to agree to 17 eurozone countries pushing ahead with the Franco-German plan for fiscal union, he needs to secure a new deal for Britain in exchange.
Just what this new deal should look like is a matter of intense debate in Conservative circles. If France and Germany turn the eurozone into a ‘fiscal union’, what does that mean for
Britain’s standing in the European Union? At the weekend, Iain Duncan Smith suggested that the nature of the EU would change so much that a referendum would be necessary. No. 10 quickly ruled
that out. Cameron confided to Cabinet colleagues on Monday that he feared another referendum would bring down the coalition. But by Tuesday night, he was pledging to veto any treaty that did not
contain safeguards for the City of London.
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