David Cameron given reprieve in EU after Angela Merkel throws a lifeline

Angela Merkel Close Up

David Cameron arrived in Brussels on Thursday with criticism ringing in his ears that he was isolated in Europe after pledging to use the eurozone crisis to repatriate EU powers.

The prime minister left Brussels with a spring in his step on Friday evening after showing that – in the budget negotiations at least – he is absolutely not isolated.

A clear alliance of four rich nations – Britain, Germany, the Netherlands and Sweden – joined forces to make clear that Herman Van Rompuy's plans for a €973bn (£786bn) EU budget were unacceptable.

Angela Merkel even signalled her dissatisfaction with what she saw as an attempt by Van Rompuy, the European council president, and José Manuel Barroso, the European commission president, to isolate Britain. Quentin Peel, the FT's veteran Berlin correspondent, reported from Brussels on Friday that Merkel was "determined not to isolate David Cameron" at the summit.

The decision of Merkel shows she was making both a tactical and a strategic choice. On a tactical level, she agreed with the prime minister's call for restraint, though she believes the prime minister's call for an €50bn of cuts went too far. On a strategic level, she showed she is determined not to do anything that would strengthen the hand of those in Britain who would like to leave the EU.

Cameron will say that Merkel's support vindicates the judgment he made when he faced her down and abandoned the main EPP centre right grouping in the European Parliament before the last general election. The German chancellor was furious with Cameron and indicated that relations would be strained. Cameron said in private that Merkel would take him seriously once he became prime minister.

But Merkel will never forget Cameron's decision on the European parliament where the Tories now sit with the highly nationalist Polish Law and Justice party. Its leaders regularly rail against the Germans. Merkel's continuing anger with Cameron means there are times when she will challenge him or indeed lay plans to thwart Britain.

One school of thought in Brussels suggests that Merkel was happy to support Cameron at this summit so that she can have a greater sway over him at the next EU summit on 13-14 December when an EU banking union will be on the agenda. Cameron will need Merkel's support at the next budget summit, possibly in January or February, increasing the chances that he will agree to water down British concerns about the banking union, goes the new theory.

Powered by Guardian.co.ukThis article was written by Nicholas Watt in Brussels, for guardian.co.uk on Friday 23rd November 2012 19.12 Europe/London

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image: © Dirk Vorderstrasse