Analysis: Semi-detached island nation faces EU isolation

Fri Dec 9, 2011 1:18pm EST
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By Keith Weir and Matt Falloon

LONDON/BRUSSELS (Reuters) - Prime Minister David Cameron has made history by blocking EU treaty change in a move that has isolated Britain and this detachment will define the next chapter in this island nation's notoriously tricky relations with continental Europe.

Cameron, who styles himself a "eurosceptic," seems to have pushed Britain further from the heart of Europe than even "Iron Lady" Margaret Thatcher dared to do in her battles in the 1980s when she said "No, No, No" to Brussels increasing its powers.

The prime minister was left out in the cold in Brussels on Friday when France and Germany failed to give him the safeguards he wanted for the powerful City of London financial services industry, which accounts for 10 percent of economic output.

Cameron's hard line may appease elements of his Conservative Party but is likely to open up a rift with his pro-Europe Liberal Democrat allies. It could also leave Britain at risk of being excluded from Brussels decisions that affect business across the nation.

"It is a black day for Britain and Europe," Liberal Democrat Lord Oakeshott said. "We are now in the waiting room while critical decisions are being taken."

Cameron's tough talk, described by one senior diplomat as "clumsy," is likely to give him short-term relief from the demands of a restive right wing of his Conservatives who have been clamoring for him to claw back powers from Brussels.

But they will be back for more, with some seeking nothing short of a complete exit.

Britain, the EU's third-biggest economy, was left on its own with an overwhelming majority of countries led by Germany and France agreeing to forge ahead with a separate treaty to build closer fiscal union to preserve the euro.   Continued...