UK Deputy PM Nick Clegg sees several sources of tension looming over Europe, starting with November's special EU summit to set the bloc's next seven-year budget for 2014-20.
David Cameron, the prime minister, has promised to fight for a seven-year freeze, and in 2010 he persuaded France and Germany to support him. But British diplomats fear Paris and Berlin are starting to flake away.
Second, British officials are concerned that François Hollande, the French Socialist president, will support more EU spending as part of a European stimulus package, while Angela Merkel, the German chancellor, is under pressure from her Polish allies to back more transfer payments to central Europe. The prospect of British isolation would heighten tensions in other areas, including the proposed eurozone banking union. The UK is seeking assurances that the integrity of the European single market in financial services is not undermined.
Third, José Manuel Barroso, the European Commission president, has mooted a new EU treaty on “political union”, wrapping in aspects of eurozone economic governance with other reforms. Although opinion in Europe is mixed on the desirability of a big new treaty, it could enshrine a two-tier EU and require British ratification. British diplomats hope that this political headache will not materialise until after the 2015 election.
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