Cameron misinformed on EU bailouts says top Tory

Prime minister David Cameron has been criticised from an increasingly vocal opposition over his promise that he has achieved a deal to prevent Britain contributing up to £19 billion to future European Union bailouts. However it is not Ed Miliband and Labour or even their Europhile Liberal Democrat coalition allies who are speaking out, but Eurosceptic Tory MPs.

The prime minister claimed he has achieved a “politically binding commitment” from all 27 EU member states that in future the United Kingdom will not have to bail out the embattled eurozone.

However, many Eurosceptic MPs have reservations about the bill. Since the bill is not technically legally binding they are concerned that it may be a commitment that may be far too easy to break.

Mr Cameron stepped in to prevent the European Commission using a loophole - Article 122 of the Lisbon Treaty - to force Britain to contribute to a £120bn fund with all the other 27 EU nations, with the eventual cost potentially reaching £16bn between 2014 and 2020 as well as billions in contributions to the International Monetary Fund.

This could have ended up costing the taxpayer £19bn, something the prime minister claims to have prevented. Mr Cameron argued:

“First of all, we do need a new mechanism to help the eurozone sort out its problems and its issues. That’s important for Britain. But we do need to make sure that Britain is not liable to spend money under that mechanism. Those are the two key things that matter to me.”

Downing Street had claimed that the loophole will now apply only to natural disasters. Britain is liable for £7bn of this scheme, which expires in 2013. However, to the anger of the Eurosceptics within his party, Mr Cameron did not demand changes to the clause as it would mean he would have to call a referendum over the issue. Leading backbench Tory MP and co-founder of Direct Democracy, Douglas Carswell, was amongst those critical of Mr Cameron’s move.

He said:

“This is a piece of paper that has no legal force. It demonstrates only one thing – the complete impotence of the British government.”

But a No. 10 spokesman insisted:

“The prime minister is confident that this wording is a very strong political agreement that will prevent Article 122 being used for financial bailouts.”

However, this may not be enough to quell backbench Tory MPs and in particular MEPs who are furious about the prime minister’s stance on European integration. Perhaps more importantly, when even the prime minister’s own party is attacking him over misinformation regarding how European bailouts could require British funding, questions remain over the credibility of Mr Cameron’s claims.