The Historic Decision
Last December’s European Council will go down in history. The Eurozone leaders agreed on a so-called new fiscal compact, but David Cameron took the historic decision to veto changes to the EU Treaties. This European Councils took place 20 years precisely after the Maastricht summit where EU leaders reached an agreement on the draft Treaty on the EU concerning political union and on the draft treaty text concerning Economic and Monetary Union. On his Commons Statement on the 1991 European Council meeting, John Major said, “This is a treaty which safeguards and advances our national interests. It advances the interests of Europe as a whole.” John Major has now been proved wrong. Bill Cash who has been warning against the dangers of the EU common currency, who led the rebellion against the Maastricht Treaty, has been proved right. He has campaigned for a EU referendum since Maastricht and gathered up over 700,000 signatures on the Maastricht referendum petition. It is now generally accepted, including by David Cameron that the Maastricht Treaty should have been subject to a referendum. In fact, John Major should have vetoed that treaty. It is now crystal clear that the opt out from the euro has not excluded Britain from this damaging process, which has been the creation of the common monetary policy.
The Common Monetary Policy does not work
The eurozone has learnt the hard way that the Euro and the common monetary policy do not work. All measures to prevent the current debt crisis have failed, including the creation of the EFSF and the ESM, as the Greek debit crisis has spread to other countries. The bailouts are just piling up debt. However, Brussels refuses to accept the failure of the eurozone. German Chancellor Angela Merkel said: ‘The task of our generation is to complete economic and monetary union, and build political union in Europe, step by step. That does not mean less Europe, it means more Europe. If the euro fails, then Europe will fail.’ The Eurozone should accept once and for all that the Euro does not work. However, they now want to move towards a fiscal and political union in order to save it. Contrary to what has been said, the fiscal union will not stabilize or make any positive difference for the debt crisis. As Bill Cash said, “fiscal union will not work either for the Eurozone or for the United Kingdom”, in fact it “will lead to greater implosion, greater sovereign debt, more defaults and more trouble.” Bill Cash pointed out “The dream of ever-closer union and, indeed, political and economic union has failed” yet “All the mistakes that have been made in the past are being reinforced in the new arrangement, which clearly will not work. It did not work before and it will not work now.”
Merkel and Sarkozy
At the October’s Summit, the Eurozone leaders agreed on “exploring the possibility of limited Treaty changes” in order to “strengthening of economic convergence within the euro area, on improving fiscal discipline and deepening economic union (…)” At Germany insistence the "limited treaty changes" were included in the European Council Conclusions as well as they “must be decided by the 27 Member States.”
The EMU has been the product of negotiations between the two main protagonists, France, with its demand for co-ordination of economic policies and Germany, with its requests for ECB independence and for excessive budget deficits to be avoided. Angela Merkel wants to direct supervision of national economic and budgetary policies in the eurozone. She has been planning a fundamental overhaul of the Stability and Growth Pact to avoid a repeat of the current crisis. Angela Merkel has been calling for debt and deficit limits to be enforceable in the European Court of Justice as well as for automatic sanctions for those violating the budget rules. In fact, as Bill Cash noted "Germany is pushing with determination to have a Europe made in its own image."
It is now common practice Merkel and Sarkozy meet in advance of every summit and hammer an agreement which is then presented to the other member states as a given fact. On 5 December, they come up with plans on how to save the euro, both agreed that a new treaty is needed. Then, they wrote to European Council President, Herman Van Rompuy, putting forward their proposals to move towards a fiscal union and overcome the euro crisis. The deal agreed by Sarkozy and Merkel is reflected in the Eurozone statement. In fact, the letter from Merkel and Sarkozy informing Van Rompoy of their plans has been converted in statement of the Eurozone leaders. As Bill Cash noticed "We are witnessing the creation of a kind of German zone driven very much by the needs of Germany and France and not in the interests of the UK (…)" The very notion of a Treaty for a fiscal union within the Eurozone is contrary to the UK national interests. It could have had profound economic, political and constitutional consequences for the UK national interests. According to Bill Cash “Whether it is the Eurozone-17 or the EU-27, he must recognise that the intention expressed by the Germans and the French is to pursue a model which is entirely unsuited to the UK and will create a fundamental change in the relationship between the European Union and the United Kingdom.” Therefore, Bill Cash has called on David Cameron to veto the treaty, and he did it.
The veto
In his statement at the House of Commons on the European Council, David Cameron acknowledged that “(…) creating a new eurozone treaty within the existing EU treaty without proper safeguards would have changed the EU for us, too.” David Cameron rightly has not yield to Brussels, particularly to France and Germany arguments. The Prime Minister decided to veto a treaty change among the 27 member states, on the grounds that the deal was not in Britain’s interests, as it did not contain safeguards to protect the single market and the UK financial services. Moreover, David Cameron said "We want the eurozone countries to come together and solve their problems. But we should only allow that to happen within the EU treaties if there are proper protections for the single market, for other key British interests." According to Nicolas Sarkozy “Very simply, in order to accept the reform of the treaty at 27, David Cameron asked for what we thought was unacceptable: a protocol to exonerate the UK from financial services regulation,” Contrary to what has been said in Brussels, David Cameron asked for safeguards “on the single market and on financial services”, which “were modest, reasonable and relevant.” He stressed that “We were not asking for a UK opt-out, special exemption or a generalised emergency brake on financial services legislation” but “for a level playing field for open competition for financial services companies in all EU countries, with arrangements that would enable every EU member state to regulate its financial sector properly.” As Bill Cash said “The Germans and the French precipitated this with their demands, throwing down the gauntlet and saying we had to do what they wanted.” He stressed that David Cameron “has vetoed the treaty as they were making demands upon us which were quite unacceptable.”
The fiscal compact
According to a statement issued, on 9 December, by the euro area heads of state or government, they believe that “further qualitative moves towards a genuine "fiscal stability union" in the euro area”, are required for “The stability and integrity of the Economic and Monetary Union and of the European Union as a whole.” Aiming at overcoming the current crisis, they agreed on the so-called "fiscal compact" as well as on “significantly stronger coordination of economic policies in areas of common interest.” Merkel and Sarkozy agreed that each euro area member state must adopt rules on a balanced budget translating the objectives and requirements of the Stability and Growth Pact into national legislation at constitutional or equivalent level. Hence, unsurprisingly, the eurozone leaders commit to establish a new fiscal rule, whereby “General government budgets shall be balanced or in surplus”, defining such balance as the annual structural deficit not exceeding 0,5% GDP. The eurozone member states commit to enshrine this national debt brake or "golden rule" in their constitutions. Moreover, the rule will also include an automatic correction mechanism that shall be triggered in the event of deviation. The mechanism will be defined by each Member State but “on the basis of principles proposed by the Commission.” The eurozone leaders, in their statement, “recognise the jurisdiction of the Court of Justice to verify the transposition of this rule at national level.” However, under the existing treaties the ECJ does not have such power. Therefore, one could say the treaties would have to be amended to provide for such requirement. They are likely to say that this would be possible under article 273 TFEU however unanimous agreement is required to confer powers upon the EU institutions, which are not foreseen in the treaties. The European Court of Justice, without amending the treaties, cannot strike down national laws that conflict with such rule.
It was also agreed that Member States in Excessive Deficit Procedure would have to submit to the Commission and the Council for approval, “an economic partnership programme detailing the necessary structural reforms to ensure an effectively durable correction of excessive deficits.” The Commission and the Council will monitor the implementation of the programme, and “the yearly budgetary plans consistent with it.” The eurozone leaders also want to put in place a mechanism for “the ex ante reporting by Member States of their national debt issuance plans.”
According to the Eurozone Statement, they also want to reinforce for euro area Member States the rules governing the Excessive Deficit Procedure (Article 126 TFEU). Hence, according to the statement, as soon as the Commission deems that a Member State is in breach with the 3% ceiling, there will be automatic consequences unless euro area Member States, acting by qualified majority, are opposed. According to the statement “Steps and sanctions proposed or recommended by the Commission will be adopted unless a qualified majority of the euro area Member States is opposed.”
Under the so-called six-pack on economic governance, approved by all 27 Member States and the European Parliament in October, which entered into force on 13th December, the Commission first warning to the member state which failed to respect the Stability and Growth pact principles (preventive arm of the Stability and Growth Pact) has to be adopted by a qualified majority of eurozone member states. If a member state deviates from the adjustment path toward its medium term budgetary objective, on the basis of a Commission’s recommendation, the Council will decide by qualified majority voting, on non-compliance by a member state. However, if the Council does not take this decision, and if the noncompliance continues, after one month the Commission can recommend, again, to the Council to decide on non-compliance, but this time such decision is taken by reverse qualify majority. Hence, it is considered adopted by the Council if not rejected by qualified majority. Under the corrective arm of the pact (excessive deficit procedure), the Commission's proposal for imposing sanctions related to non-compliance with the SGP will be deemed adopted by the Council unless it decides, by qualified majority, to reject the proposal. This, obviously, entails further transfer of powers from member states to the European Commission. Presently, the treaties require qualified majority to support sanctions but not a qualified majority to stop them. One could say that the so-called “reverse majority voting" have no legal basis on the Treaty. Nevertheless, the ‘six-pack’ already provides for a ‘reverse qualified majority voting’ in the Council. It is important to note that, within the eurozone, France and Germany have a ‘blocking minority’. Therefore, in the end of the day, the Commission proposals would be always adopted if they have the backing of France and Germany.
According to Barroso “In future, the euro area member states will commit to accept true automaticity for triggering the deficit procedure from the moment when a member state breaches its commitment to reduce deficits. The same automaticity will apply throughout the whole procedure for any ensuing steps proposed by the Commission, including the preventive arm. Only a qualified majority against the Commission proposal, would be able to stop the process.” He noted that this commitment “will add to the Six-Pack automaticity” During the negotiations of the original SGP, former German Finance Minister Theo Waigel proposed the imposition of automatic sanctions against Member States with excessive deficits, however Jacques Chirac could not accept such idea of a fine being imposed without a vote among the Member States. The ECOFIN does not automatically impose sanctions, but it takes a decision at each step of the EDP. The Treaty would have to be amended to provide for automatic sanction to be imposed by EU institutions against member states that break the rules on excessive deficits, and all 27-member states have to agree to it.
The Eurozone leaders called for a speedy approval by the Council and the European Parliament of the Commission proposals, presented in November, for a regulation on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member states in the euro area and a proposal for a regulation on the strengthening of economic and budgetary surveillance of Member states experiencing or threatened with serious difficulties with respect to their financial stability in the euro area. The proposals are based on Article 136 whereby the eurozone member states are allowed to “strengthen the co-ordination and surveillance of their budgetary discipline.” The draft regulations are subject to the ordinary legislative procedure, and QMV is required at the Council, but only eurozone Member states are allowed to vote. The Eurozone leaders noted that the proposals would strengthen the powers of the Commission in surveillance of national budgets. Under the Commission proposal, eurozone member states “should consider their budgetary plans to be of common concern and submit them to the Commission for monitoring purposes in advance of the plans becoming binding.” They would be required to submit annually to the Commission and the Eurogroup their draft budgetary plans for the forthcoming year for monitoring purposes before the plans being submitted to national parliaments. The aim is to enable the Commission and the Eurogroup to examine national budgets in order to assess whether draft national budgets are in line with EU economic guidelines and rules on fiscal discipline before they are adopted by national parliaments and recommend changes. If the Commission believes that a member state is not complying with the Stability and Growth Pact’s budgetary policy obligations, it would be empowered, under the draft proposal, to request a revised draft budgetary plan from the Member State concerned. Under the draft regulation, the Commission would adopt an opinion about whether they are in accordance with both the requirements of the SGP and the recommendations from the European semester that Member States would be invited to take into account in the process of adopting the budget. In the other hand, the eurozone member states that are already subject to an excessive deficit procedure would be monitored more closely. The European Commission also proposed a regulation on the strengthening of economic and budgetary surveillance of Member states experiencing or threatened with serious difficulties with respect to their financial stability in the euro area. The European Commission would be allowed to decide whether to subject a member State experiencing severe difficulties with regard to its financial stability to enhanced surveillance. The Commission would carry out, in liaison with the ECB, regular review missions in the member state under surveillance to verify the progress made in the implementation of the measures required. Such missions would take place even if the member state concerned has not requested financial assistance. If the Commission reaches the conclusion that the financial situation of the member state concerned has significant adverse effects on the financial stability of the euro area, it would put forward a proposal to the Council recommending to that member state to seek financial assistance and to prepare a macro-economic adjustment programme.
These proposals are a step towards fiscal integration. The Commission would be allowed to interfere in member states’ budget decision making. There would be closer co-ordination, and direct supervision of the eurozone member states economic and budgetary policies. The plan is to transfer fiscal policy decisions from national parliaments to Brussels, restricting national sovereignty and undermining democracy. The Commission may request an alternative draft budgetary plan if it identifies particularly serious non-compliance with the obligations laid down in the Stability and Growth Pact. The proposal does not give the Commission the power to veto draft budgets, the treaties would have to be amended to confer such power upon the Commission and the ECJ. However, one can wonder whether the Commission has legitimacy to intervene in member states’ matters in this way. It seems that Article 136 TFEU is being stretched to the limit.
The Eurozone leaders also commit to “continue to work on how to further deepen fiscal integration.” The President of the European Council in cooperation with the President of the Commission and the President of the Eurogroup will report on this issue in March 2012 as well as “on the relations between the EU and the euro area.” It remains to be seen if further measures on “deepen fiscal integration” would be taken before of after the intergovernmental agreement in March 2012.
Enhanced cooperation
There was also an agreement on making “more active use of enhanced cooperation on matters which are essential for the smooth functioning of the euro area, without undermining the internal market.” The eurozone leaders are referring to the possibility of using the general rules on enhanced cooperation within the current EU Treaties, to adopt EU measures that will apply solely to the member states that participate in the intergovernmental agreement. It is important to note that not all measures can be decided by enhanced cooperation between Member States within the EU legal system.
Under Article 20 TEU enhanced cooperation is reserved for areas of the “Union’s non exclusive competence.” Enhanced cooperation measures must be based on a Commission proposal, which is then blocked in the Council, the decision to enter into enhanced cooperation is therefore “a last resort.” Following a request by the Member States that wish to establish enhanced cooperation, the Commission may submit a proposal to the Council to that effect. The Council will grant authorisation to proceed with the enhanced cooperation by a qualified majority of all Member States in the Council and after obtaining the consent of the European Parliament. Under Article 326 TFEU “Any enhanced cooperation shall comply with the Treaties and Union law.” The use of enhanced cooperation must respect the Treaties, consequently, it is impossible to amend the EU’s primary law. Moreover, “Such cooperation shall not undermine the internal market or economic, social and territorial cohesion. It shall not constitute a barrier to or discrimination in trade between Member States, nor shall it distort competition between them.” Furthermore, enhanced cooperation shall be open to all Member States, consequently it cannot be address just to eurozone States. Hence, if these criteria are not complied with, the use of enhanced cooperation could be challenged at the ECJ.
The Economic Union
Nicolas Sarkozy and Angela Merkel have been arguing that the crisis had exposed the necessity to complement monetary union with an economic union, they agreed in December 2010 that steps towards political integration, including the harmonisation of tax and labour policies should be taken. The aim is to achieve greater economic convergence in the eurozone. Germany and France want to have a say on how the other Member States run their economies. As proposed by Sarkozy and Merkel, the Eurozone leaders, in their recent statement, stressed, “Alongside the single currency, a strong economic pillar is indispensable.” They said that they want to “foster fiscal discipline and deeper integration in the internal market as well as stronger growth, enhanced competitiveness and social cohesion.” The Eurozone leaders commit “to working towards a common economic policy.” They said “A procedure will be established to ensure that all major economic policy reforms planned by euro area Member States will be discussed and coordinated at the level of the euro area” According to the European Council conclusions, the Heads of State or Government of the Member States taking part in the Euro Plus Pact welcome "structured discussions on the co-ordination of tax policy issues" and that "particular attention should be paid to how tax policy can support economic policy co-ordination and contribute to fiscal consolidation and growth."
It is important to mention that Sarkozy and Merkel in their letter to Van Rompuy called for a common corporate tax base and a financial transactions tax, at the eurozone level. They said, “We need to foster growth through greater competitiveness as well as greater convergence of economic policies at least amongst Euro Area Member States.” They believe that “a new common legal framework” based “on Article 136 and/or on enhanced cooperation” should be created “to allowing for faster progress in specific areas such as: Financial regulation; Labor markets; Convergence and harmonisation of corporate tax base and creation of a financial transaction tax; Growth supporting policies and more efficient use of European funds in the euro area.” In fact, David Cameron mentioned that Angela Merkel and Nicolas Sarkozy´s letter shows that “they specifically wanted the 17 to look at issues such as financial services and the market within that treaty.” He stressed that “Without safeguards, a treaty within a treaty would have been far more dangerous than a treaty outside the EU.”
It is important to recall that it has already been mentioned if unanimity is not reached, the FTT as well as the CCCTB would be introduced by the so-called ‘enhanced cooperation’. According to the Commission the FTT has to be introduced to ensure the proper functioning of the internal market. However, one could say if enhanced cooperation is used to adopt the FTT, it could no longer be justified to avoid fragmentation in the internal market for financial services. Hence, one of the requirements for enhanced cooperation, “not undermine the internal market”, would not be fulfilled.
Economic Governance
The Eurozone leaders also reiterated that the “Euro area governance will be reinforced as agreed at the Euro Summit of 26 October”, particularly by “regular Euro Summits will be held at least twice a year.” The eurozone leaders also decided to create a new post "president of the Euro summit”, who is presently Herman Van Rompuy. He may call for “additional meetings” if necessary. It is important to mention that the Lisbon Treaty formally recognises the Eurogroup, it recognizes the European Council as a EU’s institution and provides for the post of President of the European Council but there is no reference in the Treaties for the establishment of this new EU institution and for the new post of president of the Euro summit. Hence, there is no legal basis. The existing practice of holding summit meetings of euro-zone Member States, chaired by the President of the European Council cannot be confirmed and therefore enshrined in the Treaties without the agreement of all member states. One could wonder where the money for the budget to be allocated to eurozone summits would come from.
The so-called Euro Summits “will define strategic orientations for the conduct of economic policies and for improved competitiveness and increased convergence in the euro area.” This has been considered a victory for Sarkozy who has been calling for the so-called economic government, to steer policymaking in the euro zone. According to the Euro Summit statement from last October “The President of the Euro Summit will keep the non euro area Member States closely informed of the preparation and outcome of the Summits.” Hence, the UK Government will have no say but would be “informed” of measures, which might have a terrible impact on British economy. David Cameron is aware of the risk of fiscal union and economic government, hence he decided to veto the treaty. Indeed, fiscal union within the eurozone would mean solidarity between eurozone member states, and the UK would be outvoted by 213 votes to 132. The eurozone leaders by having their own meetings, they would agree a position on financial and economic issues, which they would then impose on the other member states, if unanimity is not required. The UK would see herself in the position of having no choice but to accept legislation without having the chance of negotiate it. As William Hague said "We are, by preventing a new Treaty or amendments to the Treaties of the European Union, ensuring that the key decisions that affect us, such as to do with the single market, are still made by the 27 nations including us…" Cameron by using his veto prevented the situation from getting worse but the status quo has not changed.
Legally binding commitments?
Obviously, the aim was to amend the exiting Treaties to include some of these commitments. The Eurozone leaders noted that some measures from the fiscal compact can be decided through secondary legislation whereas others should be contained in primary legislation. According to EU economic affairs commissioner Olli Rehn “Our legal assessment is that by far the vast majority of the measures decided on Friday can be implemented through secondary legislation,” They are planning to stretch article 136 TFEU to the limit. EU officials have been saying that the new intergovernmental agreement would only include the 'golden rule' whereby participating countries would be obliged to write debt and deficit limits into their constitutions and automatic sanctions, by changing the voting system, if they break the rules.
There was no agreement at the 27-member states level to agree to change the EU’s Treaties in order to impose stricter fiscal rules on the eurozone. An intergovernmental agreement for the eurozone fiscal integration would be more difficult to enforce, and eurozone leaders would have preferred to enshrine the new rules into the EU treaties. In what concerns the UK, as David Cameron said “the choice was a treaty without proper safeguards or no treaty—and the right answer was no treaty.” The German chancellor plan A has always been to ensure an agreement among all 27 member states for a treaty change intended to introduce more integration in the eurozone, as, in this way, the EU institutions namely the European Commission and the European Court of Justice could enforce such rules on the eurozone members. It is difficult to understand that for Sarkozy and Merkel it was preferable to have the treaty vetoed rather to give Cameron the guarantees he asked for to protect the UK´s interests. It is now crystal clear that France and Germany would not waste an opportunity to reduce the City's position through measures decided by QMV.
The Fiscal and Stability Union
According to Angela Merkel the eurozone member states have set themselves on an “irreversible course towards a fiscal union." Merkel stressed, “we are not just talking about a fiscal and stability union. We have begun to create one.” Moreover, she said “This means nothing else than that a real political union is beginning to take shape.” If the Member States are already in a straightjacket, the situation is set to get worse as their flexibility will be further reduced. The eurozone Member States’ economic and fiscal policies will be further coordinated at EU level and national governments would no longer be responsible for a great range of domestic economic policies. They will lose control over their financial and economic affairs. This is the beginning of the end of budgetary sovereignty for eurozone member states. Member States further surrender of their national sovereignty is a recipe for failure. One could wonder whether eurozone citizens are willing to accept more national sovereignty being given away. In fact, they would not accept a fiscal and political union with an economic policy imposed by Germany. It remains to be seen how southern countries would be able cope with Germany’s budget discipline.
The fiscal compact agreed at the Summit has not been enough to calm the financial markets. It has not convinced the markets and the eurozone crisis will get worse. The decision to set up a fiscal union will do nothing to resolve the eurozone crisis. The measures proposed might prevent a future crisis but do nothing to resolve the present one. However, European leaders are trying to make Cameron the scapegoat for the summit failure. David Cameron has not “vetoed the solution for the euro crisis” as it has been reported. First of all a new treaty amendment is not the solution for the euro crisis and if a treaty is going to be negotiated it is only reasonable to ask for safeguards. Barroso said “The United Kingdom, in exchange for giving its agreement, asked for a specific protocol on financial services which, as presented, was a risk to the integrity of the internal market. This made compromise impossible.” It has always been David Cameron position to defend the single market, contrary to what Barroso said. In fact, contrary to what has been said in Brussels, the UK cannot be blamed for the summit failure. The Eurozone leaders could not come up with a credible solution for the euro problem. As Bill Cash noted “The reality is that the markets are already demonstrating that there is almost no chance of the euro being saved.”
The answer is not “more Europe”
The answer is not “more Europe”, in fact as more Europe we have as worse become the situation. Germany is defending its interests at expense of smaller member states. Merkel says it saves the euro having the control of national budgets of the other member states. But, Germany has no capacity to save the euro. Presently, the euro only serves Germany’s trade balance. This strategy cannot solve any problem, the eurozone, particularly Greece, Portugal, Italy and Spain, would have more debt, more unemployment and more recession. These countries face a long period of stagnation, high unemployment, and painful structural reform. In fact, according to the European Commission’s Autumn forecasts for 2011-2013, published last November, the economy, particularly in the eurozone, has come to a standstill. One could wonder whether getting out of the eurozone would be a better option for these countries. Devaluation would be, particularly, beneficial for the Portuguese economy, reducing the external debt, increasing exportations, reducing importation, fomenting national production and employment. The costs of that member states exit of the eurozone would be temporary whereas the costs of keeping the euro would be unsurpassable, the present situation would be exacerbated, pilling debt, and submitted to the Franco-German demands.
Renegotiation of the UK relationship with the European Union
David Cameron by vetoed the treaty amendment has created a situation where there is no going back. The status quo is no longer sustainable. It is important to note that the Economic and Monetary Affairs Commissioner, Olli Rehn, said: “If this move was intended to prevent bankers and financial corporations in the City from being regulated, that is not going to happen. We must all draw lessons from the financial crisis and that goes for the financial sector as well.” Financial services regulation will continue to come under the qualified majority voting system. The City of London would continue to be subject to further EU regulations. As noted by Bernard Jenkin “Even though the proposed monthly meetings of the EU17+6+3 will constitutionally be restricted to taking decisions solely with regard to euro matters, it is inevitable that they will take decisions that will affect UK interests. Britain will therefore be outside the tent when the problems of the Eurozone, inextricably interlinked with our financial services industry, will be discussed.” The eurozone member states will come together and outvote UK through qualified majority voting. Eurozone can use its voting power at EU level to force through measures in detriment of the UK’s national interest. In fact, David Cameron said, “an intergovernmental arrangement is not without risks, but we did not want to see that imbalance hard-wired into the treaty without proper safeguards.”
The Prime Minister has been calling for fundamental reform in the European Union. However, as Bill Cash said “What we have to have is a fundamental change in the relationship between the United Kingdom and the European Union, because it is a failed project.” Bill Cash has noted that “the real problems are contained in the existing treaties themselves, which need to be fundamentally changed, along with our relationship with the European Union” David Cameron now has to define the terms of the renegotiation. As Bill Cash said "We are now embarked on a very serious, responsible path towards renegotiating in a fundamental way the whole of our treaty relationship with the European Union.”
