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PM backs eurozone banking union
Banking union within the eurozone will not necessarily mean a fundamental change in Britain's relationship with the EU, Prime Minister David Cameron has said.
Plans for closer banking union between the 17 eurozone states have sparked calls for a referendum on the UK's future relations with Europe under the terms of last year's parliamentary act, which said that any treaty handing powers from Westminster to Brussels must be put to a national poll.
But Mr Cameron said it was impossible to tell whether plans for closer fiscal and financial union in the eurozone would require a series of small treaties, a single large treaty, or whether it could go ahead on the basis of "enhanced co-operation" between the countries involved.
And he said there were questions over whether the eurozone nations will be able to secure the democratic consent of their people to pursue the "remorseless logic" of the closer integration needed for the euro to survive.
Mr Cameron told the House of Commons Liaison Committee that the UK should show "tactical and strategic patience" in its response to unpredictable developments in the eurozone, rather than rushing into a referendum now when it is not clear what the UK's future position in Europe will be.
"If the 17 countries of the eurozone bring about a banking union for themselves - which I frankly think they need to do in a single currency - if they do that at the level of the 17 and we can get proper safeguards in place, then that wouldn't be a fundamental change for us," said the Prime Minister.
"So I don't think that would in and of itself trigger a massive change for us in the EU."
Mr Cameron said that Britain's current position in Europe was "unacceptable", because the balance of powers between Westminster and Brussels was not right and he wanted to bring some powers back.
He told the committee that it was in Britain's interests for the eurozone to make the steps towards integration that would stabilise the single currency and calm the markets.
But he said the most likely outcome of current efforts to deal with the crisis was that they would "kick the can down the road".