Posts tagged "CAP"

Cameron rejects EU budget compromise over rebate cuts

Herman Van Rompuy’s plan, which would cut Britain’s multibillion pound rebate, comes under discussion in Brussels

David Cameron is to tell the president of the European council in Brussels that a compromise plan for the EU budget is unacceptable because it includes drastic cuts to Britain’s multibillion pound rebate.

The prime minister, who told MPs on Wednesday that he would not agree to any further cuts to the €3.6bn (£2.9bn) annual rebate, is to raise the highly sensitive matter at the start of Thursday’s meeting with Herman Van Rompuy.

British sources fear there will not be a breakthrough at the summit, which could last into the weekend, as two core groups of countries line up to reject a proposal by Van Rompuy to cut the European commission’s planned €1,053.2bn budget to €973.2bn.

Britain accepts that the Van Rompuy plan, which covers the “commitment ceiling” akin to a credit card limit, represents a substantial cut on the original commission proposal. Source say Van Rompuy has acknowledged Britain’s demand for an inflation freeze in the budget which will cover the years 2014-20.

But Britain is concerned by his plan to ask every EU country, including Britain, to contribute to the UK rebate. Sources believe this could cut the rebate by as much as 25%.

Paris has rejected the Van Rompuy proposal out of hand on the grounds that it would cut €25bn from the Common Agricultural Policy (CAP) which benefits France. Poland and Spain, beneficiaries of structural funds which fund infrastructure developments in poorer regions, have also rejected the compromise.

Cameron showed he would fight hard to retain the rebate when he was asked on Wednesday by the Tory MP David Nuttall to give a commitment that he would not agree to further reductions. “I can certainly give [you] that assurance,” the prime minister told Nuttall.

“The rebate negotiated by Margaret Thatcher is an incredibly important part of Britain’s position in Europe and making sure that we get a fair deal. It is absolutely extraordinary that the last government gave away almost half that rebate and we have never heard one word of apology or regret for the fact that however hard we fight in Europe – and I will fight incredibly hard this week for a good deal – they have cut away our footing by giving away half the rebate.”

Tony Blair agreed to significant cuts to the rebate when he chaired the last seven-year budget negotiations during Britain’s EU presidency in 2005 after the expansion of the EU into eastern Europe the previous year. Without the changes, Britain would have become one of the EU’s largest net beneficiaries, paid for in large part by the new member states whose accession was the realisation of Thatcher’s dream of enlargement.

Cameron’s decision to signal that he planned to fight hard to retain the rebate did not cause much surprise in Brussels.

Some interpreted his intervention as cover for a possible climbdown by Britain on the overall level of the EU budget. He wants that to be subject to an inflation freeze, but has acknowledged that Britain’s net contributions will rise regardless of the outcome of the negotiations because the addition of 12 new member states since 2004 means that rich countries such as Britain will have to contribute more to the EU.

Cameron is likely to have to give ground on his demand for Van Rompuy to go further in his cuts by proposing a lower than expected “payment ceiling” – the cap on what the EU will actually pay out. This is seen as highly unlikely.

French officials are letting it be known that they expect Van Rompuy to increase CAP spending while maintaining the same overall level of cuts to the original European Commission proposal. Any increases in CAP spending lead to automatic increases in Britain’s rebate.

Paris is also indicating that it expects a plan B to kick in at the summit in which Van Rompuy declares that he cannot broker a deal and he will summon EU leaders to reconvene next year to discuss the budget. Van Rompuy’s officials insist there is no plan B.


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Posted by admin - November 22, 2012 at 08:26

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Weather-beaten UK farmers lament a dismal year for food production

Already squeezed by supermarket dominance, all types of farmer have had to endure drought and flooding this year too

“It’s been the worst year in living memory,” says Jonathan Lukies, who farms 288 hectares (720 acres) of arable and fruit orchards near Stansted, Essex. “It was horrific.”

This year’s weather has been a rollercoaster for British farmers that most now just want to forget. With a record drought afflicting most of England in the early spring – one so severe it prompted a series of emergency meetings with government – farmers desperately needed above-average rainfall to replenish the soil for planting. Their prayers for rain were answered – but in the worst possible way, with the wettest early summer ever recorded, followed by a near-sunless summer and torrential downpours in many areas late in the growing season.

This combination of extreme weather was disastrous for staple crops such as wheat and vegetables, first putting off growth and then washing out crops and preventing them from ripening.

“Starting from Easter weekend, we had a year’s rainfall in three months,” says Lukies. “That was the killer. I’ve never seen anything like it, and my father who is in his 60s says he’s never seen the like either.”

His views are echoed across the farming community. Guy Gagen, crops adviser at the National Farmers’ Union (NFU), says: “Speaking to farmers who have been in business for decades, they don’t remember anything being as difficult as this year. There have been bad years before, of course, but this has been terrible right across the growing season, from beginning to end.

“One of the problems was that it was just so dark – there was too little sunlight for crops to grow. If you think back, some days in June were like November. That really reduced productivity.”

Every sector of farming has been hit. Arable farmers have seen yields of wheat fall by 14%, according to the NFU, reducing the UK’s wheat crop to levels not seen since the 1980s – before many farmers invested in modern technology such as grain driers. Vegetable growers have suffered, with half the pea crop wiped out across the country. Meat producers, from poultry to pig farming, have seen their overheads soar due to the poor global grain harvest raising feed prices. Salad and fruit growers have also had a dreadful year, with fresh produce being thrown away or fetching abnormally low prices during June and July, as people were simply not buying summery foods because of the miserable weather.

Prices to consumers are rising sharply as a result of all these factors. That might appear to mean a bonanza for farmers – at least the food they have been able to grow is now fetching top prices. But most farmers are not profiting.

For many arable farmers, one reason is that they hedge their risks on future yields by contracting to sell their grain at an agreed price before the harvest, which gives them a guaranteed income on what they can produce. Lukies was typical, contracting for about two-thirds of his crop in advance. But prices early in the season were low – about £150 a tonne. As the harvest came in, prices soared to £205. Lukies was unable to cash in even on the third he had not sold in advance, as most of his crop was of too poor quality, owing to the weather. Thousands of farmers are likely to have found themselves in a similar bind.

For other farmers, such as vegetable growers, any price rises are outweighed by the much lower yields of their crops. “People have invested money in growing these crops, and seen the yields sinking,” says James Hallett, chief executive of the British Growers Association.

As has been increasingly the case in recent years, the fate of most UK farmers will be dictated by the supermarkets. The “big four” have such a huge market share that they can determine the margins farmers receive. They even manage to soak up much of the one source of income farmers can rely on even in tough years – farm subsidies.

An average family of four in the UK was paid £426 a year in farm subsidies under the EU’s common agricultural policy (CAP) in 2009, according to the Department for Environment, Food and Rural Affairs (Defra), and poor people are hit hardest as that represents a higher proportion of their disposable income than for the rich. That figure, amounting to more than £8 on every weekly shop, is likely to have increased since 2009 but no new research has been done. The money is supposed to support hard-pressed farmers. But the stranglehold of the supermarkets means that much of it goes to the big firms’ bottom line.

That is because the big retailers know how much farmers receive in subsidy – it is public information – and can calculate the farmers’ cost of production, so that they push down the prices they pay farmers. For thousands of farmers, this means producing food such as milk, poultry and pigs at a loss – what the supermarkets pay is below the cost incurred. Only the subsidies they receive keep these farmers in business, making them just about profitable enough to carry on.

So the subsidies paid by UK households are in effect boosting the supermarkets’ profits more than the farmers – the big retailers can reap higher margins from the food they buy from farmers by paying less than the cost of production, leaving taxpayers to pick up the bill for keeping farmers in business. That is one of the reasons consumers on mainland Europe pay less for their shopping – the rise of 6.4% to UK consumers’ weekly shop is double the EU average.

Defra said the government was trying to reform the CAP. However, while the big supermarkets are able to dictate prices, farmers and consumers are likely to continue to be squeezed.

Matthew Sinclair, chief executive of the TaxPayers’ Alliance, said: “The CAP is a disaster for Britain, forcing up our food bills and costing taxpayers a fortune in administration – it undermines the competitiveness of British farmers while cheaper imported food becomes more expensive because of tariffs and quotas. This keeps prices artificially high at a time when so many families are struggling to even put food on the table.”


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Posted by admin - October 12, 2012 at 17:35

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Cameron to bargain over UK’s status in the EU – and the CAP

PM to warn Hollande that he will block eurozone governance plans if the EU refuses to allow a renegotiation

David Cameron will warn François Hollande that he will block new governance arrangements for the eurozone if the EU refuses to allow a renegotiation of Britain’s relationship with Brussels. In his first meeting with the new French president in Downing Street, Cameron will also ask Hollande to uphold an informal deal with his predecessor on Britain’s EU rebate.

Cameron agreed not to demand major changes to the Common Agricultural Policy, which benefits French farmers, in exchange from an undertaking from Sarkozy to leave alone Britain’s £2.7bn annual EU rebate. French officials have made clear in recent weeks that they are not minded to uphold the informal arrangement during the forthcoming negotiations on the EU budget for the period 2014-2020.

Downing Street is hoping that Tuesday’s meeting will foster a warmer relationship with Hollande after Cameron declined to meet him during his visit to London at the height of the French presidential election.

But the prime minister is planning to explain in greater detail his warning at last month’s EU summit that Britain will demand “safeguards” to protect its position when eurozone leaders draw up new governance arrangements. Britain fears that moves towards a fiscal union in the eurozone could undermine the EU’s single market which applies to all 27 member states.

Cameron will also make clear that Britain would use the discussions to demand a renegotiation of Britain’s position in the EU, possibly by demanding the repatriation of social and employment laws.

The prime minister’s spokesman said: “The agenda will focus on the range of bilateral issues. I would expect them to cover the economy, the situation in the eurozone. I would expect them to cover a number of foreign policy issues and our ongoing co-operation with the French on defence.”

William Hague will underline the government’s commitment to repatriating powers from Brussels at the launch of a report by the Fresh Start group of eurosceptic Conservative MPs. The report has a line-by-line analysis of every policy area, with an assessment of the likelihood of of success in repatriating powers.

It breaks these down into three areas using traffic lights: green lights for changes that can be made immediately, such as opting out of 130 justice and home affairs laws; amber lights for changes that would need treaty change, such as repatriation of social and employment laws; and red lights for confrontational proposals such as unilateral withdrawal from the CAP.

George Eustice, one of the report’s authors, said: “Our timetable for action sets out what the government could achieve and by when. We reject the view of defeatists who say it is impossible to renegotiate our membership of the EU. There are things that the government could do right now, such as opt out of 130 justice and home affairs laws. There are other things, such as repatriating control of employment law which may be matters for our next manifesto. But the important thing is to begin the process now.”

Andrea Leadsom, one of the driving forces behind the Fresh Start group, said: “Events in Europe mean that the way the EU operates is bound to change significantly. Over the coming years, there will be a series of opportunities for the UK to take back power from Brussels. This is the perfect chance for us to negotiate a radically different relationship with the EU, one which properly serves Britain’s interests.

“We believe strongly that the government must adopt an approach to these negotiations which is completely different from previous practice. There must be no more of Britain’s traditional reserve – we must get the best deal for Britain and not worry about others’ feelings. This is not the time for Whitehall’s ‘two key points’ negotiating approach – we need a shopping list of requirements, which will enable ministers to secure the right package.”

Chris Heaton-Harris, the former Tory MEP who is now MP for Daventry, said: “When the renegotiation is complete, the British people must have their say – there must be a referendum on what any new relationship looks like.”


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Posted by admin - July 10, 2012 at 07:40

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David Cameron vows to protect British EU rebate from French demands

Fears that François Hollande is planning to abandon an informal non-aggression pact on funding made with Sarkozy

David Cameron is facing renewed pressure over the EU on two fronts – a group of 100 Tory MPs have demanded a referendum and the new French government indicated it would adopt a tough stance over Britain’s EU rebate.

As the prime minister arrived in Brussels for the EU summit, the Conservative Home website reported that nearly 100 MPs want a referendum in the next parliament. The move came as the prime minister signalled to eurosceptics that he would fight hard to preserve Britain’s £2.7bn annual EU rebate in forthcoming budget negotiations.

Cameron told EU leaders the rebate remained “fully justified” amid fears that François Hollande is planning to abandon an informal Anglo-French non-aggression pact on EU funding.

Meanwhile, a third of the parliamentary Conservative party signed a letter, organised by MP John Baron, demanding a guarantee of a referendum in law. The letter called on Cameron “to place on the statute book before the next general election a commitment to hold a referendum during the next parliament on the nature of our relationship with the European Union”.

As he arrived in Brussels, the prime minister said: “I completely understand and in many ways share people’s concerns about Brussels getting too much power. That is why this government legislated to put in place an absolute lock so that governments cannot pass powers from Britain to Brussels without asking people first in a referendum.”

Cameron’s remarks show that, for the moment at least, ministers will only envisage a referendum if powers are transferred from Britain to the EU. But the MPs believe that the current negotiations in Brussels, which will see greater fiscal co-ordination in the eurozone, may transform the EU so deeply that a referendum is necessary.

Ministers may also be tempted to offer a referendum along the lines of the Baron letter in the Tory manifesto for the next general election to ward off a threat from the UK Independence party in the 2014 European parliamentary elections.

The letter was disclosed as the prime minister made clear in Brussels that Britain would fight any moves by France to dilute Britain’s rebate. His intervention was aimed at Hollande, who appears to be distancing himself from an informal deal agreed by Cameron and Nicolas Sarkozy.

The prime minister will use an imminent meeting to ask Hollande to uphold the deal in which Britain agreed not to press too hard for reform of the common agricultural policy (CAP). In exchange, Sarkozy agreed to ease traditional French demands for the scrapping of the rebate.

A UK official said the prime minister would outline the strength of his feeling at the EU summit on Thursday night. “The prime minister … will make very clear that the UK abatement is not up for negotiation. Our view is that the UK abatement remains fully justified because of the distortions in the EU budget. That is not an issue that we are willing to negotiate.”

The official added that the prime minister had decided to raise the rebate before the EU embarks on a fresh set of negotiations over the its budget for 2014-2020. The official said: “We are going to raise the abatement because we think that as we enter this process, it is important for people to have absolute clarity about our position.”

Britain receives £2.7bn back from the EU each year as part of a deal negotiated by Margaret Thatcher in 1984. The former prime minister said that Britain received an unfair budget deal when it joined the then EEC in 1973 because it paid a disproportionate amount into the CAP. France, which had vetoed British membership of the EEC in the 1960s, has traditionally benefited from CAP spending, which still accounts for 40% of the EU budget. Britain has pointed out that agriculture only accounts for 1% of the EU’s economy.

The prime minister is determined to resist any dilution of the British rebate because he has been highly critical of Tony Blair’s decision to forego £7bn in the past seven year budget negotiations. These were concluded in the final days of the UK presidency of the EU in December 2005.

The former prime minister said he had no choice but to agree to a cut in the rebate after ten new EU members, mainly from eastern Europe, joined in 2004. Every EU member contributes to the British rebate. The arrival of the new member states meant that, without reform, Britain would have become one of the largest beneficiaries of EU spending. As one of the EU’s largest and richest members Britain is traditionally a net contributor.

Blair says he resisted a French move to abolish the rebate altogether by placing the CAP on the table.

The current budget negotiations are being led by the senior treasury official Peter Curwen who was heavily involved in the 2005 negotiations as the Treasury representative in Brussels. John Cunliffe, another Treasury official who is now Britain’s EU ambassador, was despatched by Gordon Brown to monitor the negotiations at the EU summit in December 2005.

Jonathan Powell, Blair’s former chief of staff, wrote in his memoirs that Brown was highly secretive about the Treasury’s numbers during the negotiations. Powell said he and Blair were forced to kidnap Curwen to discover the then chancellor’s thinking in the run up to an EU summit under the Luxembourg presidency in June 2005.

Powell wrote: “Given the Treasury’s refusal to share information with us, we had real trouble working out what the financial implications for Britain of the Luxembourg proposal would be. In desperation, we kidnapped the Treasury’s expert at the UK mission in Brussels and took him with us to Luxembourg so that he could explain to us what the offer really meant.

“He was enormously relieved when we finally let him go. He didn’t mind that he was being dumped in Paris, the next stop on our trip, without a passport or any money. He just wanted our assurance that we wouldn’t tell the Treasury that he had been travelling with us: that would blight his career for ever.”


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Posted by admin - June 29, 2012 at 08:46

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Cameron to warn Hollande on EU rebate

PM to tell president: abide by deal struck with Nicolas Sarkozy or UK will demand major cuts in EU subsidies to French farmers

Britain is to tell the new French government that it will demand major cuts in generous EU subsidies to farmers in France if President François Hollande challenges the annual £2.7bn British rebate.

In a sign of how traditional tensions could complicate the prime minister’s attempts to woo the new president, Britain is planning to warn Paris that Hollande would be well advised to abide by an informal deal struck with Nicolas Sarkozy.

The prime minister agreed with Sarkozy not to push too hard for reform of the Common Agricultural Policy, which favours French farmers. In exchange Sarkozy undertook not to demand a watering down of Britain’s EU budget rebate.

Britain is hoping to deliver the message in a friendly way to Hollande who has not forgotten that David Cameron declined to meet him during the presidential campaign, all but endorsing Sarkozy.

But the prime minister is under pressure to take a tougher stance on Europe with a more radical reform of the next seven year EU budget which will run from 2014-2021. A tough round of negotiations, not expected to conclude until next year, is gathering pace.

Andrea Leadsom, a central figure in the eurosceptic Fresh Start group of MPs, said the prime minister needed to be “more aggressive” in his negotations with other EU leaders.

Leadsom, former head of corporate governance at Invesco Perpetual, said the EU’s overall budget could be cut by 15% if a series of reforms are made to structural funds which are meant to support poorer member states. The budget is worth £112bn a year which would mean it would be cut by 15% – £16.8bn.

In a chapter of a new green paper, to be published by the Fresh Start group, Leadsom says that structural funds should only be distributed by the EU to countries whose gross national income is less than 90% of the EU average. Britain would have been handed back £13bn of the £33bn it contributed during the current budget period from 2007-2013 had the plans been in place then. The £9bn spent in Britain on structural funds would have been administered in Britain while a further £4bn, spent on relatively rich EU regions, would have been repatriated to Britain. The remaining £20bn would have remained with the EU to distribute to poorer regions.

Leadsom said: “We should be far more aggressive in our negotiating position. Advisers tell me you can’t have a shopping list but reforming structural funds would be a razor sharp reform.”

The demands by the Fresh Start group may help ministers as they explain to the French that the prime minister will face intense domestic pressure during the budget negotiations that are expected to last well into 2013. One senior government source said Britain will tell the new administration in Paris of the need for each country to respect their interests.

The source said: “The prime minister and Nicolas Sarkozy had an informal understanding that we would not push the French too hard on the CAP if they keep their hands off the rebate.”

If Hollande demands major cuts to the rebate Britain will explain that the CAP and the rebate are linked. If the first element of the CAP, known as Pillar 1 which provides direct support to EU farmers, were to fall then the rebate would fall at a commensurate rate. Margaret Thatcher negotiated the rebate in 1984 because Britain paid a disproportionate amount in the CAP Pillar 1 under the terms of its EEC accession terms when it joined in 1973. “The rebate is never as simple as the French think,” the government source said.

Cameron wants to avoid a repeat of the last EU budget negotiations, concluded in December 2005 under the British presidency of the EU, when Tony Blair agreed to cut the rebate by about £7bn in a seven year period. Blair has always maintained that he achieved a good deal because the rebate had to be reformed after the arrival of ten new member states in 2004. The former prime minister says he rejected French demands for larger rebate cuts by placing the CAP on the table.

Leadsom said, “With the eurozone in absolute crisis the impact on all European economies is going to be disastrous. At a time like this it is complete nonsense for the EU to bury its head in the sand. We have got to really start to fight back.”

Pressure from backbenches to take a tougher stance on Europe could interfere with Cameron’s attempts to minimise tensions with his Liberal Democrat coalition partners.

On Sunday those tensions were increasing when Nick Clegg dismissed suggestions by the home secretary Theresa May that Britain was planning to “pull up the drawbridge” on any exodus of workers from crisis-hit eurozone nations.

May said on Friday contingency planning was under way to deal with a potential influx of would-be immigrants.

Clegg said she had only been talking about “keeping an eye on migration patterns”.

He told the BBC’s Andrew Marr: “I really do think some of the breathless talk in the media about do we pull up the drawbridge to stop hordes of people migrating across Europe is both far-fetched, somewhat apocalyptic in tone and deeply unhelpful. We are not there yet.”


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Posted by admin - May 28, 2012 at 19:23

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David Cameron to warn François Hollande against challenging EU rebate

PM to tell president: abide by deal struck with Nicolas Sarkozy or UK will demand major cuts in EU subsidies to French farmers

Britain is to tell the new French government that it will demand major cuts in generous EU subsidies to farmers in France if President François Hollande challenges the annual £2.7bn British rebate.

In a sign of how traditional tensions could complicate the prime minister’s attempts to woo the new president, Britain is planning to warn Paris that Hollande would be well advised to abide by an informal deal struck with Nicolas Sarkozy.

The prime minister agreed with Sarkozy not to push too hard for reform of the Common Agricultural Policy, which favours French farmers. In exchange Sarkozy undertook not to demand a watering down of Britain’s EU budget rebate.

Britain is hoping to deliver the message in a friendly way to Hollande who has not forgotten that David Cameron declined to meet him during the presidential campaign, all but endorsing Sarkozy.

But the prime minister is under pressure to take a tougher stance on Europe with a more radical reform of the next seven year EU budget which will run from 2014-2021. A tough round of negotiations, not expected to conclude until next year, is gathering pace.

Andrea Leadsom, a central figure in the eurosceptic Fresh Start group of MPs, said the prime minister needed to be “more aggressive” in his negotations with other EU leaders.

Leadsom, former head of corporate governance at Invesco Perpetual, said the EU’s overall budget could be cut by 15% if a series of reforms are made to structural funds which are meant to support poorer member states. The budget is worth £112bn a year which would mean it would be cut by 15% – £16.8bn.

In a chapter of a new green paper, to be published by the Fresh Start group, Leadsom says that structural funds should only be distributed by the EU to countries whose gross national income is less than 90% of the EU average. Britain would have been handed back £13bn of the £33bn it contributed during the current budget period from 2007-2013 had the plans been in place then. The £9bn spent in Britain on structural funds would have been administered in Britain while a further £4bn, spent on relatively rich EU regions, would have been repatriated to Britain. The remaining £20bn would have remained with the EU to distribute to poorer regions.

Leadsom said: “We should be far more aggressive in our negotiating position. Advisers tell me you can’t have a shopping list but reforming structural funds would be a razor sharp reform.”

The demands by the Fresh Start group may help ministers as they explain to the French that the prime minister will face intense domestic pressure during the budget negotiations that are expected to last well into 2013. One senior government source said Britain will tell the new administration in Paris of the need for each country to respect their interests.

The source said: “The prime minister and Nicolas Sarkozy had an informal understanding that we would not push the French too hard on the CAP if they keep their hands off the rebate.”

If Hollande demands major cuts to the rebate Britain will explain that the CAP and the rebate are linked. If the first element of the CAP, known as Pillar 1 which provides direct support to EU farmers, were to fall then the rebate would fall at a commensurate rate. Margaret Thatcher negotiated the rebate in 1984 because Britain paid a disproportionate amount in the CAP Pillar 1 under the terms of its EEC accession terms when it joined in 1973. “The rebate is never as simple as the French think,” the government source said.

Cameron wants to avoid a repeat of the last EU budget negotiations, concluded in December 2005 under the British presidency of the EU, when Tony Blair agreed to cut the rebate by about £7bn in a seven year period. Blair has always maintained that he achieved a good deal because the rebate had to be reformed after the arrival of ten new member states in 2004. The former prime minister says he rejected French demands for larger rebate cuts by placing the CAP on the table.

Leadsom said, “With the eurozone in absolute crisis the impact on all European economies is going to be disastrous. At a time like this it is complete nonsense for the EU to bury its head in the sand. We have got to really start to fight back.”

Pressure from backbenches to take a tougher stance on Europe could interfere with Cameron’s attempts to minimise tensions with his Liberal Democrat coalition partners.

On Sunday those tensions were increasing when Nick Clegg dismissed suggestions by the home secretary Theresa May that Britain was planning to “pull up the drawbridge” on any exodus of workers from crisis-hit eurozone nations.

May said on Friday contingency planning was under way to deal with a potential influx of would-be immigrants.

Clegg said she had only been talking about “keeping an eye on migration patterns”.

He told the BBC’s Andrew Marr: “I really do think some of the breathless talk in the media about do we pull up the drawbridge to stop hordes of people migrating across Europe is both far-fetched, somewhat apocalyptic in tone and deeply unhelpful. We are not there yet.”


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Posted by admin -  at 08:21

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