Brussels red tape is an attack on the City, claims Cameron

David Cameron: Pictured arriving in Perth for a meeting with Commonwealth leaders
12 April 2012

The City of London is under "constant attack" from European directives and red tape, said David Cameron.

The Prime Minister spoke up amid fears that the emergence of a two-tier European Union will mean Frankfurt and Paris ganging up to undermine London as a global financial centre.

"London is the centre of financial services in Europe," he said. "It's under constant attack through Brussels directives. It's an area of concern, it's a key national interest that we need to defend."

The comments, made while flying to Australia for a Commonwealth summit overnight, were welcomed by City chiefs and by Conservative MPs who are eager to see the Government fight for British interests.

Stuart Fraser, from the City of London Corporation, said: "We've been saying for some time that a deal in Europe, in the eurozone, could marginalise the City and I think it's probably one of the biggest threats we've seen to the City in my career of 40-odd years."

Yesterday, the 17 countries of the eurozone announced they will embark on closer fiscal union in an attempt to stabilise the currency in future. They plan to hold twice-yearly summits as the Euro Group and appoint their own president.

Chancellor George Osborne admitted there was a "danger" that the groups could start acting as a caucus to advance its members' interests in EU summits because they outnumber the 10 countries, including Britain, who do not have the euro.

The plans have caused alarm among Eurosceptics who fear that the Square Mile could be the greatest casualty.

Mark Field, MP for the Cities of Westminster and London, said: "I am very positive about what [Mr Cameron] said. Rather than just talk about repatriating powers, we have got to be very forensic about identifying our key national interests.

"Clearly, this rush to fiscal union by the Euro Group could be bad news for the City of London. There will be a massive power grab by the Euro Group at the expense of the 10 countries outside the euro."

Mr Cameron has already discussed the issue with the premiers of Sweden and Poland, both outside the euro. London Mayor Boris Johnson has written to European Commission president José Manuel Barroso to oppose a tax on financial transactions.

"At a time when many EU member economies are struggling, some on their knees, it would be madness to weigh them down with this new millstone," the Mayor wrote.

The tax has been proposed by the European Commission and backed by France and Germany to help pay for a bailout. Mr Osborne said it would be vetoed by the UK as it would hinder London's ability to compete with New York and Tokyo.

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