UK's Cameron spells out EU treaty change concerns

BRUSSELS (Dec 9): British Prime Minister David Cameron demanded
safeguards on Thursday to prevent more power going to new European Union
financial watchdogs as a condition for backing any change to the EU's
basic law, according to a document seen by Reuters.

Germany is leading a drive to change the European Union's Lisbon
Treaty to enshrine a new system of budget controls aimed at tackling the
euro zone debt crisis. But it needs the backing of Britain's reluctant
government if it wants to involve all 27 EU countries in any change to
the bloc's law.

At a meeting of EU leaders to decide how to tackle the debt crisis
and pursue that amendment of the EU's fundamental law, Britain presented
a list of concessions it would like in return for supporting such a
move.

Cameron wants additional safeguards that would stop the EU's three
financial watchdogs in charge of banking, insurance and markets from
overruling country authorities.

"National supervisors should remain responsible for the day-to-day
supervision of individual firms," the document said in a reference to
Britain's desire to maintain its authority over the City of London
financial district.

He believes this is needed to stop an EU watchdog such as the
European Banking Authority ordering the recapitalisation of a British
bank.

"This would stop Europe being able to impose additional costs on the
British taxpayer," said one diplomat familiar with the British position.

The demands fall short of a full "opt-out" on new financial regulation that some officials had expected Cameron would seek.

Britain also wants to secure the permanent location of the European
Banking Authority (EBA) in London, Europe's top centre for financial
services.

Cameron is furthermore seeking a pledge from the EU to address the
current rule of the European Central Bank that euro-denominated
transactions be cleared within the euro zone. Britain wants it to be
possible to clear such deals in London.

Finally, Britain wants to allow member countries the flexibility to beef up EU rules if they wish.

Relations between London and Brussels have grown strained as the
European Union drafts new laws to tighten rules for banking and finance
in the wake of the global financial crisis. London, Europe's financial
capital, has the most to lose.

London is currently locked in dispute with Brussels about a new
capital regime for banks, where Britain wants the flexibility to impose
even stricter standards on its lenders. - Reuters