Britain’s refusal to back an EU-wide treaty modification to tackle the eurozone crisis marks a sea change in its relationship with Europe.
The move has been applauded by eurosceptics at home – and some in the City of London whose interests the prime minister said he was defending.
But it leaves the UK more isolated within the EU than ever before.
“Cameron’s decision, which is I believe to a certain degree a real surprise and a shock for the Europeans, consolidates the idea in a lot of people’s minds that we can’t make Europe, the Europe we need today, with the involvement of the United Kingdom,” said Thomas Klau, Head of the European Council on Foreign Relations.
The UK risks being excluded from important EU decision-making that affects British business.
Yet 40 percent of Britain’s trade is with the eurozone and some three million jobs depend on European trade.
“I think this speaks to the difficult position Cameron is in domestically. But now in effect he’s out in the cold and it’s going to make the UK’s relationship with the EU going forward much more complicated, much more precarious,” said Mujtaba Rahman, European analyst at the Eurasia group.
Britain’s veto followed its failure to get safeguards for the City’s financial services industry, worth 10 percent of economic output.
Now, while the rest of the EU takes steps giving Brussels more say, domestic calls to bring more powers back to Westminster are getting louder.