Hague: No UK veto on use of EU institutions by eurozone

The UK will not veto the use of EU-wide institutions by members of a new eurozone fiscal pact, Foreign Secretary William Hague has said.

Mr Hague told the BBC the UK had "some real legal concerns" about the use of the European Court of Justice.

But he said the UK was "reserving its position" for now, and would only "take action" if use of the institutions threatened Britain's interests.

Twenty six other EU states are expected to join the fiscal agreement.

Mr Hague spoke ahead of an EU summit in Brussels on Monday which will be dominated by the ongoing eurozone debt crisis, and the need for growth and "smart" budget discipline in Europe.

In December, David Cameron vetoed treaty changes involving all EU states, which were aimed at bringing about closer fiscal union within the eurozone to help tackle its debt crisis.

But Labour's shadow foreign secretary Douglas Alexander said: "William Hague has been forced to admit this morning that the deal on the table today does not include any direct requirements of the UK, making David Cameron's decision to walk away from the negotiations last month even less understandable."

The foreign secretary's comments appear to be in conflict with those of fellow Conservative cabinet minister Iain Duncan Smith, who said he trusted the prime minister to prevent the use of EU-wide institutions.

"The fact is the prime minister vetoed them using the institutions and he has always said that veto was because we had no guarantees that what they are proposing would not damage the single market, or for that matter, would actually cause problems for the financial sector," he told BBC One's Andrew Marr Show.

But Mr Hague said that despite legal concerns about the European Court, "we're not intending to take action about that now".

"If the use of the EU institutions at any point threatens Britain's fundamental rights under the EU treaties, or damages our vital interests such as the single market, then we would have to take action about that, including legal action, so we will reserve our position on that," he told BBC Radio 4's Today programme.

"On the specific question about the use of the court, we are not signing a treaty that permits that, but we are reserving our position."

He said the fiscal pact countries would give "assurances" that no damage would be done to UK interests, and ministers would wait to see if that was the case.

"If we were to say 'you cannot use these things at all' what we would be up against would be that many of the provisions are already taken care of in the existing EU treaties."

At the time of Mr Cameron's veto, Conservative MPs urged him to ensure that institutions built for all 27 member states were not used by the new grouping of other EU states.

Mr Cameron told MPs at the time: "In the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, Britain included."

It's the beginning of the end of our participation and that should be welcomed and encouraged”

He later told BBC Radio 4's Today programme he would do "everything possible" to stop other EU states from discussing the single market without the UK.

But he admitted there were "legal difficulties" surrounding the use of institutions like the European Commission and European Court of Justice.

The UK has secured official observer status in negotiations over the fiscal pact, but some suggest it will still suffer for being left outside a powerful new club.

Eurosceptic Conservative MP Douglas Carswell said it was not the job of UK politicians "to cosy up to unaccountable elites in Brussels".

"If the rest of the European member states create a fiscal agreement with its separate architecture and separate institutions that's a very good thing," he said.

"It's the beginning of the end of our participation and that should be welcomed and encouraged."