UK coalition partners clash amid euro crisis

David Cameron and Nick Clegg clashed over Europe today as the continent struggles to deal with the eurozone crisis.

After the British Prime Minister urged “fundamental reform” of EU institutions, his Liberal Democrat deputy delivered a dire warning that renegotiating treaties would cause paralysis.

Only “populists, chauvinists and demagogues” would benefit if mainstream politicians became locked into “arcane” discussions rather than focusing on economic recovery, Mr Clegg insisted.

In his annual foreign policy speech to the Lord Mayor of London’s banquet last night, Mr Cameron dismissed talk of “grand plans and Utopian visions” and called for a looser EU with “the flexibility of a network, not the rigidity of a bloc”.

Mr Cameron – who pointedly described himself as among the “sceptics” on Europe – acknowledged that the immediate priority for the EU was restoring growth and tackling the debt crisis.

However, he said the current crisis also offered an opportunity to undertake fundamental reform and address long-standing problems afflicting the EU.

Mr Cameron said that while he wanted to see powers to “ebb back” to Britain, for the EU as a whole it was a chance to ask: “What kind of Europe do we actually want?”

He added: “For too long, the European Union has tried to make reality fit its institutions. But you can only succeed in the long run if the institutions fit the reality.”

German Chancellor Angela Merkel told her Christian Democratic Union party conference in Leipzig last night that the EU’s treaties would have to be overhauled to create a tighter political union.

But in sharp contrast to Mr Cameron, she suggested that process would result in “more Europe” rather than less.

“We must develop the European Union’s structure further,” she said. “That does not mean less Europe, but more. That means creating a Europe that ensures that the euro has a future.”

At a press conference this morning, Mr Clegg admitted he “thought differently” from Mr Cameron on Europe.

“Clearly the Conservative Party and the Liberal Democrats, and David Cameron and myself, think differently on European issues.

“But where we agree is ... what do we do to push economic reform and push the liberalisation needed to create jobs and prosperity in the EU?”

Speaking alongside Dutch Prime Minister Mark Rutte in Westminster, Mr Clegg went on: “I don’t think anyone is talking about unilateral repatriation of powers. It’s not possible, and Europe doesn’t work like that.

“I am not going to provide a running commentary on the Prime Minister’s speech or indeed the speech, much reported this morning, by the German Chancellor.

“But the danger always is that the debate becomes very quickly polarised between one side which says this is the moment to rush headlong towards further integration, new treaties, new intergovernmental conferences, new arcane debates about EU powers, and another side that says this is the moment to unravel the whole thing.

“I don’t think either side have got their priorities right.

“The priority now is jobs and growth, jobs and growth.

“Is the whole political establishment now going to disappear into a windowless room in Brussels, discussing things that no one can understand? It means absolutely nothing to millions of people across the EU who are worried about economic security. They are worried about prospects for their children.

“The only people who will benefit will be populists, chauvinists and demagogues, who will exploit that lack of political leadership.”