A\u00a0draft deal to reform Britain\u2019s relationship with the European Union\u00a0has fiercely divided the Square Mile, prompting cheers from big business groups and drawing sharp criticisms from sceptical economists and industry leaders.<\/p>\n
European Council President\u00a0Donald Tusk\u00a0tabled a tentative agreement yesterday for a \u201cnew settlement\u201d for the UK in the EU, and in a letter to the leaders of all 28 EU member states,\u00a0Tusk said his proposals go \u201creally far in addressing all the concerns raised”\u00a0by Prime Minister\u00a0David Cameron.<\/p>\n
But Tusk added: “This has been a difficult process and there are still challenging negotiations ahead. Nothing is agreed until everything is agreed.”<\/p>\n
The circulation of the draft kicks off another two weeks of high-stakes negotiations ahead of a meeting of EU leaders later this month. Cameron has said that he wants to secure a final deal at the meeting, paving the way to hold an in\/out vote as soon as June.<\/p>\n
TheCityUK and Confederation of British Industry (CBI) welcomed yesterday\u2019s draft, calling it a \u201cmilestone\u201d in the reform process, while the Institute of Directors said the proposals were \u201cbetter than expected\u201d.<\/p>\n
Economists and industry leaders, however, slammed the deal, saying it fell short of earlier promises made by the Prime Minister and chancellor\u00a0George Osborne.<\/p>\n
“Britain’s business leaders and finance professionals will remain to be convinced that today’s draft deal is the right formula for a better future in Europe,\u201d said ICAS chief executive Anton Colella.<\/p>\n
Quidnet Capital Partners chief executive Richard Tice agreed, telling\u00a0City A.M.<\/em>: \u201cThere is no genuine reform in any of this. The Prime Minister talks about substantial changes, but this is a restatement of the existing system.\u201d<\/p>\n Osborne wrote in\u00a0City A.M.<\/em>\u00a0last September: \u201cOne of the greatest threats to the City\u2019s competitiveness comes from misguided European legislation. A central demand in our renegotiation will be that Europe reins in costly and damaging regulation.\u201d<\/p>\n But Jon Moynihan, former executive chairman of PA Consulting Group, said he saw little in the draft that would curb harmful regulations. \u00a0\u201cEven the small set of concessions achieved will either be just ignored by the EU as such agreements have in the past,\u201d Moynihan said. \u201cThey are sort of meaningless as far as business is concerned.\u201d<\/p>\n Among the proposals included in the draft is a so-called safeguard mechanism protecting non-euro countries from being discriminated against by the Eurozone.<\/p>\n The draft calls on Eurozone countries to “respect the competences, rights and obligations of member states whose currency is not the euro\u201d and allows the UK to call a summit of EU leaders if it is concerned about punishing Eurozone rules, including those related to financial services. But the draft stops short of allowing the UK and others to veto Eurozone legislation.<\/p>\n \u201cIt\u2019s not a mechanism that has any actual impact,” Europe Economics executive director Andrew Lilico told\u00a0City A.M.<\/em>, calling the measure \u201ccompletely worthless\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":" A\u00a0draft deal to reform Britain\u2019s relationship with the European Union\u00a0has fiercely divided the Square Mile, prompting cheers from big business groups and drawing sharp criticisms from sceptical economists and industry leaders. European Council President\u00a0Donald Tusk\u00a0tabled a tentative agreement yesterday for … Continue reading