Cameron demands UK special status in Europe

The prime minister wants to force the EU to acknowledge that the euro is not Europe’s “single currency” — and to write the change into the bloc’s treaties.

A confidential British negotiating document seen by The Times spells out one of the prime minister’s pivotal demands as he tries to reshape the UK’s relationship with the EU.

The change would on one level be symbolic, in that Britain has no intention of joining the euro in the foreseeable future. It would also allow Mr Cameron to show that Britain was not bound by the EU’s treaty pledges of “ever closer union”, one of the Tories’ manifesto pledges.

Without such a change to put before voters in the in/out referendum promised by Mr Cameron as early as next year, “the UK will end up outside the EU”, according to diplomatic sources.

The document spells out Mr Cameron’s ultimatum, saying that his forthcoming negotiation with Brussels and fellow EU heads of state “should include the recognition that the EU is a multi-currency union”.

According to a senior European diplomat, the question is central to Britain’s attempt to renegotiate its relationship with the EU.

“The British have asked the EU to accept an architecture that demonstrably shows the UK is never heading to the same destination and has a different category of membership, otherwise the UK will end up outside the EU,” he said.

Wolfgang Schäuble, the German finance minister, hinted that talks on the future of the eurozone could be used to find a special deal for the UK. However, he said that any resulting treaty change would not be possible before a British referendum. “We will try to move in this direction, possibly through agreements that would later be incorporated into treaty changes,” he told the Wall Street Journal.

Mr Cameron’s negotiating team — Tom Scholar, a senior Downing Street official, Ed Lewellyn, Mr Cameron’s chief of staff, and Sir Ivan Rogers, British ambassador to the EU — have already linked talks in Brussels on the future of the eurozone to the need for safeguards for the EU’s nine non-euro members.

Treaties since Maastricht in 1992 make repeated reference to the euro as “the single currency of the European Union” and impose a requirement on all member states, apart from Britain, to join it.

While the UK has a 23-year-old protocol giving it an “opt-out” of the euro, the traditional assumption has always been that a future pro-EU government would one day join the single currency.

Mr Cameron wants a legally binding EU commitment that, according to British sources, spells out “we’re not heading to the same destination”.

Britain fears that the eurozone, acting as a bloc of 19 members, will run the EU for its own benefit, distorting Europe’s single market or allowing the European Central Bank to take measures defending the euro at the expense of the pound.

Next Tuesday, Mr Scholar and other senior national officials meet for a dinner, hosted by Jean-Claude Juncker, the European Commission president, to discuss reforms to make the eurozone work better and whether treaty change is required to do so.

According to the negotiating document, Mr Scholar will argue that measures taken by the eurozone to combat the debt crisis over the past five years, go “beyond the existing assumptions and structures of the Lisbon treaty”.