Cameron defies increasingly isolated Merkel

‘No’ used to be the French prerogative in matters of European integration. Charles de Gaulle made a late career out of it. But perhaps the title is passing to Britain. David Cameron indicated yesterday that he would veto any EU banking treaty that did not safeguard the City, as James said he would.

Meanwhile, George Osborne joined Cameron in recognising that a European banking union, under design by ECB president Mario Draghi, is necessary if the euro is to survive. Angela Merkel agreed, saying that the answer to the present crisis was more Europe everywhere, only at a pace that suits weary German taxpayers.

This sedate approach is becoming unsustainable. Yesterday evening, ratings agency Fitch downgraded Spain by 3 notches on the grounds that European leaders, led by Mrs Merkel, lacked a ‘credible vision’. (Spain is poised to ask for an EU bailout.) The rating agency’s view is shared by the Chinese, who have said that they will buy