The Prime Minister will be on the outside of discussions, as Britain is not
one of the 17 eurozone countries giving Brussels powers over tax and public
spending.
However, he will be fighting to make sure the new banking union, leading to a
future political union, does not threaten Britain's financial interests.
Ahead of the summit, Mr Cameron was warned by the House of Commons European
Scrutiny Committee that the proposals could damage democracy and the EU's single
market.
"The Prime Minister needs to be aware, as he discusses these matters that the
debate has moved on from specific concerns about individual issues to
fundamental questions which involve our democracy," said Bill Cash MP, the
chairman of the committee.
The group of MPs urged Mr Cameron "to secure very robust language about the
single market and the role of national parliaments".
However, George Osborne, the Chancellor, last night said he thinks Britain
has already got a "very good deal" out of early negotiations.
Mr Osborne went ahead to secure an agreement that Britain and other non-eurozone countries will get a say on decisions by a new financial regulator, the European Banking Authority.
In the early hours of this morning, he said: "It has been a long night of negotiations but I think we have got a very good deal at the end of it. We have always said the eurozone needed to create a banking union to help solve its problems."
Mr Cameron will spend today with other European leaders discussing a timetable to strip national parliaments in the eurozone of the right to set their own budgets.
The plans have been put forward because of concerns that elected MPs cannot be trusted to put the financial stability for the eurozone before promises on public spending to voters.
The proposals declare that "national parliaments are not in the best position" to ensure "the common interest of the union". They also suggest giving MEPs a role to police national public spending levels.
British MPs are concerned this will set a dangerous precedent under existing rules where all EU countries are obliged to submit their spending plans to Brussels.
"We are concerned at the implications about the primacy of the European Parliament," the scrutiny committee said.
In his invitation letter to European leaders, Herman van Rompuy, the president of the European Council, insisted that there needed to be a major shift in sovereignty to the EU to preserve the euro.
"It is indeed crucial that, in order to boost confidence in the long term viability of the economic and monetary union, we set out the milestones that will ensure we close the gaps in the architecture which were revealed by the crisis," he wrote.
Diplomats in other European countries are concerned over growing hostility to the EU in the British parliament. in October, MPs defeated the government to vote for a reduction in Brussels spending against the Prime Minister's strategy of seeking a freeze.
"We were startled by the fact that so few spoke up for the EU. How can this be happening in the British parliament?," said one senior official.
Brussels officials are worried that the more assertive approach by MPs and growing calls for a referendum are pushing Britain out of the EU.
Mr Cameron has promised to secure Britain a "new settlement" with Brussels. However, has postponed a landmark speech setting out how he will give voters a say over the future of Britain's relationship with the EU until next year.
Last week, Boris Johnson, the Mayor of London and a potential leadership rival to the Prime Minister, warned that the coalition's policies of encouraging ever closer economic links between eurozone countries was "morally wrong".
Mr Johnson demanded that the Prime Minister call a referendum on whether Britain should remain part of a new 'pared down' EU focused on trade through the single market.
Mr Osborne went ahead to secure an agreement that Britain and other non-eurozone countries will get a say on decisions by a new financial regulator, the European Banking Authority.
In the early hours of this morning, he said: "It has been a long night of negotiations but I think we have got a very good deal at the end of it. We have always said the eurozone needed to create a banking union to help solve its problems."
Mr Cameron will spend today with other European leaders discussing a timetable to strip national parliaments in the eurozone of the right to set their own budgets.
The plans have been put forward because of concerns that elected MPs cannot be trusted to put the financial stability for the eurozone before promises on public spending to voters.
The proposals declare that "national parliaments are not in the best position" to ensure "the common interest of the union". They also suggest giving MEPs a role to police national public spending levels.
British MPs are concerned this will set a dangerous precedent under existing rules where all EU countries are obliged to submit their spending plans to Brussels.
"We are concerned at the implications about the primacy of the European Parliament," the scrutiny committee said.
In his invitation letter to European leaders, Herman van Rompuy, the president of the European Council, insisted that there needed to be a major shift in sovereignty to the EU to preserve the euro.
"It is indeed crucial that, in order to boost confidence in the long term viability of the economic and monetary union, we set out the milestones that will ensure we close the gaps in the architecture which were revealed by the crisis," he wrote.
Diplomats in other European countries are concerned over growing hostility to the EU in the British parliament. in October, MPs defeated the government to vote for a reduction in Brussels spending against the Prime Minister's strategy of seeking a freeze.
"We were startled by the fact that so few spoke up for the EU. How can this be happening in the British parliament?," said one senior official.
Brussels officials are worried that the more assertive approach by MPs and growing calls for a referendum are pushing Britain out of the EU.
Mr Cameron has promised to secure Britain a "new settlement" with Brussels. However, has postponed a landmark speech setting out how he will give voters a say over the future of Britain's relationship with the EU until next year.
Last week, Boris Johnson, the Mayor of London and a potential leadership rival to the Prime Minister, warned that the coalition's policies of encouraging ever closer economic links between eurozone countries was "morally wrong".
Mr Johnson demanded that the Prime Minister call a referendum on whether Britain should remain part of a new 'pared down' EU focused on trade through the single market.
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