UK isolated from new Europe treaty; Cameron vs Sarkozy on City rules

Prime minister David Cameron has caused the EU to fracture after refusing to sign up to a new treaty over concerns about financial services regulation.

Attempts to get all 27 EU states to approve a new deal failed during overnight talks in Brussels. French leader Nicolas Sarkozy said the 17 eurozone states and other EU members would work on a separate pact instead, in a bid to restore the credibility of the euro. The UK and Hungary will play no part in a new inter-governmental treaty, while Sweden and the Czech Republic will consult their parliaments before making a decision. Cameron used his power of veto after EU leaders, let by Sarkozy, refused to bow to his demands for special safeguards for the City of London. The Prime Minis...