Czechs Join Britain In Rejecting EU Treaty

David Cameron is no longer isolated in Europe after the Czech Republic joined Britain in refusing to sign a controversial EU treaty handing more powers to Brussels.

Some 25 out of the 27 member countries have signed the new fiscal pact which is aimed at stopping overspending by eurozone countries.

Leaders hope the agreement will reassure investors they will never repeat the mistakes that led to the current sovereign debt crisis.

At the last EU summit in December, Mr Cameron caused fury by vetoing a treaty designed to shore up the eurozone.

The UK was the only country to walk away from the so-called fiscal compact, after the Prime Minister was rebuffed when he sought protection for Britain's financial services industry.

It was a decision which tested the strength of the coalition and brought accusations the UK had pushed itself to the periphery of the EU, its largest trading partner, amid the eurozone crisis.

Mr Cameron warned any changes the other members made under their alternative fiscal pact - excluding Britain - could not use EU institutions such as the Commission and EU court because they could only carry out policies applying to all 27.

At the latest EU talks, he did not try to push his case against using institutions.

But he warned he would take action to defend British national interests in Europe if the new fiscal deal between other member states threatens UK powers.

He said: "We will only take action if our national interests are threatened - and I made clear today that we will be watching this closely."

The PM added: "They (the other member states) have today agreed on a new treaty focused on tighter fiscal discipline which we agree is essential. Now this is a totally separate treaty - because we vetoed an EU treaty in December.

"We're not signing this treaty. We're not ratifying it. And it places no obligations on the UK. But, as I said in December, this is new territory: it has only been agreed today. It has yet to be ratified or implemented."

Sky's political editor Adam Boulton said: "David Cameron is saying Britain is not involved, therefore constitutionally there is no question for Britain, no referendum and no opportunity to take back powers.

"But he insists Britain has reserved its position to take action, obstructing progress if it believes the British national interest is going to be threatened.

"The ground he has given is he is saying European institutions can be used to police this new agreement for the eurozone."

France's President Nicolas Sarkozy said the Czech Republic did not join for constitutional reasons.

Mr Sarkozy also announced there were high hopes of a deal over debt-laden Greece in the "coming days".

At the talks in Brussels, EU leaders promised to stimulate growth and create jobs but admitted there were no "quick fixes" to the continent's sovereign debt woes.

The heads of government vowed they must "do more to get Europe out of this crisis" as they pledged to offer more training to young people in their search for work.

Amid 23 million unemployed people in Europe, the leaders also said they would channel unused development funds into creating jobs.

They also pledged to reduce barriers to doing business across the EU's 27 countries, and ensure small firms have access to credit. But they did not offer any new financial stimulus.

Over the course of Europe's two-year debt crisis, leaders have repeatedly tried to reassure investors by pledging to cut spending and reduce their deficits.

But those austerity measures have hurt growth, and Europe is now facing a new recession.