Reuters David Cameron has put Britain offside and offshore in Europe. In his failed last-minute quest for special treatment over financial regulation, the prime minister has taken Britain out of the room where decisions on the future of Europe will be shaped. The consequence could well be a prolonged, bitter parting of the ways between the British and the rest of the European Union, culminating in an acrimonious divorce in which both sides lose. The cheers of British Eurosceptics for Cameron's veto of EU treaty changes to allow the countries that share the euro single currency to pursue closer fiscal union were echoed by cries of “good riddance” in much of mainland Europe. How this can safeguard the interests of the City of London financial center is a mystery, not least to some of the bankers and executives whose much criticized sector accounts for 10 percent of the British economy. “No matter what happens now, the UK has isolated itself and lost critical influence for no gain whatsoever,” said Sony Kapoor, head of the Brussels economic think-tank Re-Define. Britain is already seen by many as a free-rider, enjoying the benefits of being the euro zone's principal financial centre without the responsibilities of membership, while refusing to contribute to rescue packages for indebted countries. The UK does pay a small share of loans to Greece and Portugal via the International Monetary Fund, and it lent money bilaterally to Ireland, a neighbor and big trade partner, but it is refused to pay into the euro zone's bailout fund. Former US ambassador to London Raymond Seitz wrote in his 1998 memoir “Over Here” that Britain's usefulness as an ally was directly linked to its clout in the EU. “If Britain's voice is less influential in Paris or, it is likely to be less influential in Washington.” If the country is perceived as being on its way out of the EU in the longer term due to the deepening hostility of Cameron's Conservatives and of public opinion, it will also be a less attractive investment destination. As Tom Brown, a London-based senior executive with a German bank, wrote in a letter to Britain's Financial Times, “the talk of “safeguarding” the City misses the point, as the City can only maintain its ascendancy in financial services if the UK is a fully committed member of the European Union”. French President Nicolas Sarkozy said Cameron had picked the wrong time to seek special protection for bankers, hedge fund managers and tax shelters which citizens across Europe believed needed more regulation, not less, in the wake of the global financial crisis. Sarkozy achieved a long-standing goal of French policy due to Cameron's stance, with the emergence of a hard core intergovernmental Europe centered on the euro zone with Britain on the outside. __
