No alliance after UK, Czechs snub European pact

By Karel Janicek

Associated Press

Published: Tuesday, Jan. 31 2012 12:00 a.m. MST

Czech Republic's Prime Minister Petr Necas addresses the media during an EU summit at the European Council building in Brussels, Monday, Jan. 30, 2012. All European Union countries, except Britain and the Czech Republic, agreed Monday to sign onto a new treaty designed to stop overspending on the eurozone in an effort to end the bloc's crippling debt crisis and ensure it never happens again.

Yves Logghe, Associated Press

LONDON — They are two European nations facing off against 25 others, but don't expect a new united front from London and Prague.

Britain and the Czech Republic were the only members of the 27-nation European Union to reject deeper fiscal ties within the bloc, snubbing a new pact agreed on at a Monday summit. The deal aims to halt Europe's crippling debt crisis by ending overspending in the eurozone.

The 17 countries that use the euro hope tighter fiscal rules will help to restore confidence in their joint currency and assure potential investors they are serious about controlling their debts.

Although the new rules only apply to eurozone nations, European leaders sought support from the other 10 EU states who have their own currencies, hoping the fiscal pact could eventually be incorporated into a main EU treaty.

"This is a treaty outside of the EU," British leader David Cameron insisted Tuesday at the House of Commons. "We are not signing it. We are not ratifying it. We are not part of it."

The decision by Cameron and Czech Prime Minister Petr Necas to reject the deal leaves Europe with a clumsy compromise and has thrown up legal questions about using EU-wide institutions like the European Court of Justice to enforce the pact.

Yet they are hardly united in their opposition. Czech and British leaders share a deep skepticism about having the Brussels-based EU override national decision-makers, but don't agree about their future ties to Europe. The Czech Republic is committed to swapping its currency for the euro in the future while Britain is firm on plans to keep its own currency, the pound.

And British officials, political analysts and even the Czech government itself doubt that Prague's rejection of the EU fiscal pact can stand — meaning there will be no political "alliance of skeptics" between the two nations.

"I think we are in very different positions — they are committed to joining the euro, and that would mean at some point they would be bound by this agreement," Cameron spokesman Steve Field told reporters Tuesday in London.

"They have set out their own reason as to why they didn't sign up to it," Field said. "Ours is rather different, we are not committed to joining the euro, we don't have any intention of joining the euro, but we are keen to see there is nothing here that would in any way undermine our interests, or undermine the single market."

Anand Menon, director of the European Research Institute at the University of Birmingham in central England, agreed that Prague is likely to eventually sign up to the pact despite Cameron's efforts to portray the U.K. as not "standing alone" on the issue.

"In terms of substance, I don't know what we've achieved, except ill will," he said of Britain's hardline stance, arguing that Britain has weakened its position by alienating its traditional European allies.

But Raoul Ruparel, head of economic research at the Open Europe think tank, insisted Britain's influence in Europe wouldn't be diluted even if it is the only holdout.

"Even though the U.K. will not be in the room, they will be very much in the minds of all of those who are," Ruparel said.

Although Cameron won't oppose the use of EU buildings and officials by the 25 nations so far signed up to the fiscal pact, he vowed to "watch like a hawk" — and even sue his neighbors — if they attempted to sideline Britain or distort the EU's single market.

"I made clear we will watch this closely and if necessary we will take action, including legal action, if our national interests are threatened by misuse of the institutions," Cameron told British lawmakers Tuesday.

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