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BAIL-OUT SHOWS WE NEED AN EU REFERENDUM, SAY TORIES

Chancellor George Osborne

Saturday July 23,2011

By Alison Little

CONSERVATIVE MPs last night stepped up their call for a referendum on Britain’s membership of the EU after eurozone leaders agreed a huge bailout for Greece.

The Treasury insisted Britain was unaffected by the £96billion deal, which involves only single currency nations.

Ministers yesterday put themselves on a collision course with eurosceptic Tories by insisting there was “virtually no potential for a referendum” on future changes in the eurozone because UK sovereignty was not affected.

But the Treasury did admit that British taxpayers will now make less return on the UK’s loan to Ireland. This is because the interest rate is being cut to give softer loan terms, agreed on Thursday in Brussels, for Greece, Ireland and Portgual.

The MPs say a drive by single currency countries to forge closer economic ties – a move apparently encouraged by Chancellor George Osborne – must force a British rethink of its dealings with Europe. Backing calls for a referendum, former Cabinet minister John Redwood said: “I would like the Government to renegotiate a looser arrangement and then put it to the British people.”

The Treasury insisted Britain was unaffected by the £96billion deal

Bill Cash, chairman of Parliament’s European scrutiny committee, warned closer union in the eurozone would be like creating “an aircraft carrier with a rowing boat tied to it’’.

He said David Cameron must insist on renegotiating the terms of the EU treaties if major new provisions were proposed.

Douglas Carswell, who backs the Daily Express crusade to get Britain out of the EU, said fiscal union would inevitably require treaty changes.

Mr Osborne insisted that easing the pressure on Dublin was in the UK’s “national interest”.

World markets and shares in banks, which stood to lose on loans, rallied yesterday after agreement on the Greek bailout, allaying fears that the euro would collapse.