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Cameron Defends Veto of EU Financial Agreement

Britain's Prime Minister David Cameron (C) is flanked by Chancellor of the Exchequer George Osborne (R) and Leader of the House of Commons George Young during a parliamentary debate on last week's European Union summit, in London, December 12, 2011.

British Prime Minister David Cameron on Monday defended his decision to veto a European Union proposal to provide an enforcement mechanism for fiscal discipline. He says the EU deal, which other members plan to go forward with outside EU auspices, would have damaged Britain’s key financial services industry.

“I went to Brussels with one objective, to protect Britain’s national interest and that is what I did," said Cameron.

Prime Minister Cameron faced the unruly behavior that is traditional in Parliament as he began his statement Monday. When the shouting ended, he stated his position.

“I made it clear that if the eurozone countries wanted a treaty involving all 27 members of the European Union, we would insist on some safeguards for Britain to protect our own national interests. Satisfactory safeguards were not forthcoming and so I did not agree to the treaty,” said Cameron.

The prime minister refused to back a European Union summit deal Friday in Brussels that would have required members to keep their budget deficits below 3 per cent, and empowered the organization's bureaucracy to enforce the rule. The plan is designed to build investor confidence that the current financial crisis - blamed mainly on large debts in some countries - will not get worse or be repeated.

Prime Minister Cameron said the rules would have surrendered sovereign British powers to the EU and would have hurt the country’s financial services industry. He said his European counterparts refused to provide a series of safeguards he wanted.

The other 26 EU member states decided to go forward with the plan, without Britain’s participation.

Opposition leader Ed Miliband of the Labor Party accused the prime minister of isolating Britain, alienating its European partners and removing it from important future talks on European economic issues.

“He has given up our seat at the table. He has exposed, not protected, British business. And he has come back with a bad deal for Britain," said Miliband.

Miliband declined to say whether he would have accepted the EU treaty, or what he might have done to get a better one.

Notably absent Monday from Parliament was the prime minister’s coalition partner, Deputy Prime Minister Nick Clegg of the Liberal Democrats. He spoke out against Cameron’s decision over the weekend on the BBC’s Andrew Marr Show.

"Well, I am bitterly disappointed by the outcome of last week's summit, precisely because there's now a real danger that over time the U.K. will be isolated and marginalized in the European Union," said Clegg.

Financial markets reacted unevenly to Friday’s decision. The plan to be pursued by the other 26 EU members is designed to ensure long term stability. But analysts are still concerned about the short-term financial health of some members who will need to borrow large sums of money early next year to finance their existing debts - including Greece and Italy.