(AP) MADRID - Spanish civil servants, some dressed in mourning, took to the streets Friday to protest the latest round of government austerity measures and their second wage cut in as many years.
Several hundred workers left the complex of government ministries in Madrid and blocked traffic briefly Friday. In the eastern city of Valencia, several hundred Justice Ministry workers shouted "hands up, this is a stick-up" at a protest rally.
The civil servants who saw their wages cut 5 percent on average in 2010 in the first round of austerity cuts are usually paid 14 times a year. The government is proposing to axe an extra payment normally made just before Christmas.
The cuts are part of a raft if austerity measures unveiled by Prime Minister Mariano Rajoy designed to shave euro65 billion off the government's budget through 2015. Rajoy's Cabinet was scheduled to approve the wage cut and other austerity measures Friday.
The cuts, which also include a sales tax increase and overhaul of benefits, were unveiled after Spain won approval from the other 16 countries that use the euro for the first euro30 billion tranche of a bailout for its troubled banking sector. Spain also managed to secure an extra year to meet a European deficit reduction target of 3 percent of GDP.
In the Puerta del Sol in downtown Madrid, about 500 civil servants gathered, about half of them dressed in black. Some women wore veils, as if they were at funerals. Protesters blew whistles and horns. Civil servants often ridiculed in Spain and seen as lazy, clock-in and clock-out types with the luxury of a job for life. But many earn as little as euro1,000 a month.
Isabel Perez, a 40-year-old librarian, said "our wages have already been cut and now they take away the Christmas payment. I don't make it to the end of the month as it is. The extra payment gave some relief. We're not exactly millionaires." She earns euro1,300 a month and had already faced a euro330 euro a year wage cut by the Madrid regional government for which she works.
Pablo Gonzalez, 52, who also works for the Madrid regional government, said, "The cutbacks affect me badly because I pay my mortgage over 14 payments in line with my wages and cutting the extra one means I have to pay more each month."
"The government should go after the big companies that don't pay tax and bankers that have committed fraud and have run this country to the ground. Instead, we have to pay," he added.
Spain's banking industry is struggling to finance itself under the weight of toxic loans and assets from a real estate market collapse in 2008. Investors are becoming increasingly wary of placing money in Spanish banks, who are having to turn to the European Central Bank for financing. In June, Spanish bank borrowing from the ECB rose 17 percent from May. The accrued total as of the end of that month was euro337 billion, 77 percent of all the money owed to the ECB and seven times the figure from June 2011.
A draft memorandum of understanding agreed by eurozone finance ministers for Spain's bank bailout suggests billions in problematic assets should be segregated into an "external asset management agency" so as to clean up Spanish banks balance sheets.
It also says that by the end of the year certain areas of jurisdiction sanctioning and licensing should be transferred from the Spanish economy ministry to the Bank of Spain.
This is seen as paving the way for the day when Europe has a single bank supervisory body that will oversee central banks and be empowered to recapitalize Spanish and other troubled banks directly, rather than pump the money into governments and increase their debt loads.
(AP) BRUSSELS - Euro area finance ministers agreed early Tuesday on the terms of a bailout for Spain's troubled banks, saying that 30 billion euro ($36.88 billion) can be ready by end of this month.
The finance ministers for the 17 countries that use the euro as their official currency will return to Brussels on July 20 to finalize the agreement, having first obtained the approval of their governments or parliaments, eurozone chief Jean-Claude Juncker said early Tuesday morning.
As part of the agreement with Spain, finance ministers from all 27 European Union countries are expected Tuesday to approve a one-year extension, until 2014, of Spain's deadline for achieving a budget deficit of 3 percent.
There will be specific conditions for specific banks, and the supervision of the financial sector overall will be strengthened, Juncker said.
"We are convinced that this conditionality will succeed in addressing the remaining weakness in the Spanish banking sector," he said.
Dutch Finance Minister Jan Kees de Jager said the agreement should be finalized soon.
"We have a tentative deal on the bailout conditions for a bailout of Spanish banks," De Jager said. "The total will likely be 100 billion euros. Some countries like the Netherlands, Germany and Finland need to get parliamentary approval. We hope this can be wrapped up within a week."
The exact amount of the bailout will likely not be known until September, when individual examinations of different Spanish banks have been completed.
Spain borrowing rate hits danger zone
Greek PM outlines crisis policy, structural reforms
Bank of England backs another stimulus
De Jager said Madrid's partners agree that "financial sector reforms in Spain must be ruthlessly implemented. These reforms include notably a cap on salaries of bank executives and a ban on bonuses."
However, he said a system of EU-wide banking supervision still needs to be worked out.
"There are still differences over this," he said. "The details will be worked out by the end of the year."
But on Monday, before the eurogroup meeting began, Mario Draghi, the chief of the European Central Bank, said he was confident that a banking union in the European Union would be achieved.
"The first thing to be created will be the supervision," Draghi told a committee of the European Parliament. "We are talking about the long-term sustainability of the European monetary union. We are going as fast as we can. It is better to do things right than in a hurried fashion. We certainly want to see this thing wrapped up by the end of the year," he said, referring to banking oversight.
"By the end of this year we will have something that is not perfect, but achievable."
Officials also announced that Klaus Regling, a German economist who currently heads the temporary EU bailout fund, had been chosen to head the European Stability Mechanism - the permanent bailout fund meant to head off instability in the eurozone.
Regling, 61, will take charge of a bailout fund meant to reassure markets that the European Union will stand behind its weaker members.
(AP) MADRID - Spain's borrowing costs rose to dangerously high levels Monday as finance ministers of the 17 countries that use the euro began to gather in Brussels to discuss terms of a rescue package for the country's stricken banks.
The interest rate, or yield, on the country's 10-year bonds hit 7 percent Monday morning, a level that market-watchers consider is unaffordable for a country to raise money on the bond markets in the long term and the point at which Greece, Ireland and Portugal all sought an international bailout. Stocks on Madrid's benchmark index fell 1.7 percent. The yield later fell back down to 6.99 percent.
The yield indicates the interest rate a government would have to pay to raise money from financial markets when it holds bond auctions. While Spain can afford the high rates for a few weeks at least, it would find them too expensive in the longer term.
Spanish officials had originally indicated that it would decide on Monday how much the country's troubled banks would get from a euro100 billion ($124 billion) lifeline from other members of the 17-country eurozone. Spain's bank industry has been struggling since 2008 under the weight of toxic loans and assets following a collapse in the country's property market.
But an official with Spain's economy ministry said last week that the meeting of eurozone finance ministers was not expected to generate a figure for how much Spain would tap. Ministers planned to discuss terms of the loan and may or may not finalize some of them at the evening session, said the official, who spoke on condition of anonymity in keeping with policy.
Outside auditors are expected to complete rigorous assessments of Spanish banks by July 31. Separate stress tests will also be conducted on individual lenders banks to determine how much each bank needs to strengthen its balance sheets against further economic shocks if they can't raise capital on their own, the official said. These results are due to be published in mid-September.
The Spanish official's comments reflect those made by a European official in Brussels last week, who said that no numbers for the overall loan amount would be coming out until bank-by-bank stress tests had been completed. The official added that one of the aims of Monday's meeting would be to get a ``political understanding'' of the memorandum of understanding for Spain's loan so ministers could start paving the way in their countries to get the bailout approved. Spain's loan needs the green light from all 17 countries using the euro.
Investors fear a full-blown bailout of Spanish public finances would be too large for the eurozone to handle. The country's economy is the fourth largest among the 17 nations that use the common euro currency behind Germany, France and Italy - and it is also larger than those of Greece, Ireland and Portugal combined.
The interest rate on Spanish 10-year bonds hit a eurozone high of 7.18 percent in intraday trading on June 18 before closing at 7.12 percent that day, according to financial data provider FactSet.
Daniel Woolls in Madrid and Don Melvin in Brussels contributed to this report.
(CBS/AP) MADRID - Borrowing rates for Spain and Italy rose to distressing levels again on Friday, signaling a resurgence in concern over Europe's debt crisis just one week after markets cheered leaders' decision to help financially weaker states.
The rate, or yield, for the Spanish 10-year bond was up 0.22 percentage points to 6.96 percent by early afternoon in Madrid. That level is deemed unsustainable over the long term and could push Spain to seek a full-blown bailout like Greece, Ireland and Portugal.
Italy's equivalent rate was up 0.13 percentage points to 6.01 percent. In comparison, Germany's bond seen as a safe haven for investors was commanding a yield of just 1.37 percent.
Monti: Italy needs cheaper borrowing rates
Spain's banks could get bailout money in weeks
ECB cuts key rate to new low to help economy
Both Spain's and Italy's yields fell sharply earlier this week in a wave of euphoria after European leaders agreed to channel aid directly to troubled banks, without further burdening a country's debt. They also agreed to make it easier for countries to get rescue loans and for the European bailout fund to buy bonds from other investors, which would lower countries' borrowing rates.
The summit decisions were generally seen as a step in the right direction in the resolution of the crisis, but the feeling is that more needs to be done and faster.
"The optimism following last week's EU leaders' summit is fading as concerns over various aspects of the agreement creep in," wrote Elisabeth Afseth and Brian Barry, fixed income analysts at Investec financial services, in a note to clients.
One key concern is that the European bailout fund will not be big enough if Spain or Italy needed rescue loans for their governments.
The bailout fund will have euro500 million in lending power when the new, permanent version is finalized this month. It has already committed some euro180 billion to help Greece, Ireland and Portugal. Spain will ask for as much as euro100 billion to rescue its banks, and Cyprus is expected to seek a bailout of as much as euro10 billion.
But European leaders have given no sign that they intend to increase the bailout fund's lending capacity. In fact, smaller eurozone countries like Finland have been complaining about the cost of the rescue operations.
The bond rates for Spain and Italy began inching up on Thursday, when the European Central Bank gave no indication that it would take more emergency action to ease eurozone government borrowing rates. The ECB has in the past bought the governments bonds of financially weak countries like Spain and Italy and also flooded banks with cheap loans. Those measures helped bring borrowing rates down, but only for a few months at a time.
Investors are also aware that the eurozone economy is in terrible shape, a fact which will make it more difficult for Spain and Italy to cut their public debt loads. Almost half the eurozone countries, including Spain and Italy, are in recession. Unemployment is at a euro-era record of 11.1 percent across the currency bloc. Youth unemployment in Spain is over 50 percent, threatening to create a lost generation of workers.
"Slowly the optimism after the last EU summit seems to be vanishing and reality is setting in with weak growth, high debt levels and unemployment once again in the spotlight," said Markus Huber, of ETX Capital financial services.
Beyond the economy, Spain's big problem is its banks, which are sitting on massive amounts of soured real estate investments.
The Spanish government last month finally recognized some of the banks were in deep trouble and its eurozone partners agreed to make available up to euro100 billion in loans for the banks.
When that deal was announced, the existing rules were that the Spanish government would be responsible for repaying those loans. Fears that the government would not get the money back from banks and be hit with huge losses worried investors, who pushed the country's borrowing rates to euro-era highs above 7 percent.
That is why the EU agreement to directly aid the banks, without adding to government debt, was seen as a victory for Madrid. However, the lack of detail on how and when the new rule will take effect seems to have punctured the balloon of optimism.
Eurozone finance ministers are expected to release some details on the bank bailout Monday.
"There is a feeling that the European Council meeting last Friday is not the `gamechanger' some had hoped for and funding pressures with regard to Spain and Italy are returning,'' said Neil MacKinnon of VTB Capital.
(AP) FRANKFURT, Germany - The European Central Bank cut its key interest rate by a quarter percentage point Thursday to a record low 0.75 percent to try to help ease Europe's financial crisis and boost its sagging economy.
The action, which was widely expected, is meant to make it cheaper for businesses and consumers to borrow and spend money. But experts said that fear over the economy was so high in Europe that the cut might only have limited effect.
In a more surprising move, the ECB cut the interest rate it pays banks on overnight deposits by a quarter percentage point - to zero. This pushes banks to lend the money, rather than sock it away with the ECB.
ECB President Mario Draghi said the eurozone economy would recover only gradually. Some of the risks foreseen from the debt crisis had already materialized, pushing the bank to act, he said.
Analysts warned the rate cut might do little to jolt the eurozone economy back to life, however. Borrowing rates are already low, but businesses and households are not spending money because they are afraid of the economic outlook.
Draghi said there is more the ECB could do to stimulate growth - "we still have all our artillery ready" - and that low inflation gives the bank more wiggle room. However, he suggested no further actions were imminent.
Stock markets initially rose after the news, but the gains faded as investors worried about a slowdown in the global economy. Germany's DAX stock index fell 0.5 percent and the Dow 0.2 percent. The euro was down 1.1 percent at $1.2380.
"Today's ECB interest rate cut does little to alter the bleak economic outlook," said Jennifer McKeown, analyst at Capital Economics.
She said the ECB is likely to now wait and see how the financial markets and the economy react to the rate cut and to the new emergency measures announced by European leaders last week.
The leaders agreed to make it easier for troubled countries and banks to receive rescue loans from Europe's bailout fund and also signaled greater willingness to use emergency funds to purchase government bonds. The goal would be to drive down troubled countries' borrowing costs. They also agreed to create a single Europe-wide banking regulator to prevent bank bailouts from wrecking individual countries' government finances.
Collectively, the moves sent a message to financial markets that leaders from the 17 countries that use the euro could work together to fix their problems. They also helped lower the high borrowing costs for financially stressed countries such as Italy and Spain, the euro region's third- and fourth-largest economies.
Lending activity in the eurozone has remained weak because businesses are not asking for credit because of the slow economy and out of fear that the eurozone may suffer a further financial calamity. Concerns remain that bankrupt Greece could eventually leave the euro, causing more turmoil, or that Spain and Italy could need bailouts that would strain the resources of donor countries.
Joerg Kraemer, chief economist at Commerzbank, said the cut wouldn't fix what was wrong. The reason the eurozone economy is weak is not because of "high ECB rates but because of uncertainty stemming from the sovereign debt crisis. This can't be cured by lower rates."
The cut to the refinancing rate will give some further relief to banks by lowering the rate they pay on the ?,?1 trillion in cheap emergency loans they took from the ECB Dec. 21 and Feb. 29, the bank's chief emergency measure. The rate on that money is the average refinancing rate over the life of the loan, which can be up to three years. Lower costs on that money means they can earn more when they use it to buy higher yielding investments such as government bonds.
The cut in the deposit rate is meant to push banks to stop using the ECB as a safe haven by parking money there overnight. Before the debt crisis exploded, banks would deposit about ?,?50 billion with the ECB overnight. That ballooned as the crisis made banks wary of investing or lending money. On Wednesday, banks had placed ?,?790 billion with the ECB overnight.
There are other safe havens for banks to place their money - government bonds of financially strong countries like Germany, for example. But a central bank is considered the ultimate safe haven since it can print money at will.
The eurozone crisis has battered investor confidence for 2 ? years. It has seen Greece, Ireland and Portugal need bailouts from the other eurozone countries and the International Monetary Fund to keep paying their debts and covering their budget deficits. Spain has asked for as much as ?,?100 billion in rescue loans for its banks.
Earlier in the day, the central banks of China and Britain took action to stimulate their economies.
The Bank of England decided to purchase another 50 billion pounds in government bonds from financial institutions. The hope is that the banks will use the extra cash to lend to businesses and households.
China's central bank, meanwhile, cut interest rates for the second time in a month to shore up its economy, the second-largest in the world. Interest on a one-year loan was reduced by 0.31 percentage points to 6 percent effective Friday. Chinese authorities have rolled out a series of stimulus measures since March after economic growth slowed to a nearly three-year low of 8.1 percent in the first quarter.
In the U.S., weak economic indicators have raised speculation that the U.S. Federal Reserve may also have to do more to keep the U.S. economy growing. Some think the Fed might carry out a third round of bond purchases aimed at driving down interest rates on business and consumer loans.
The Fed took more limited action at its meeting ending June 17, extending its so-called Operation Twist effort in which it sells short-term bonds and buys longer-dated issues to push down long term interest rates. The Fed meets next Aug. 1.
(AP) NICOSIA, Cyprus - Cyprus' president on Thursday defended his government's decision to seek financial aid from the island nation's eurozone partners while at the same time asking for a loan from Russia, insisting that the two are perfectly compatible.
Dimitris Christofias said he sees nothing wrong with simultaneously pursuing a loan from Russia that may come with better terms than a European Union bailout.
"I don't think it's a sin for a country to ask for a loan from another, friendly country, or that it needs to apologize," Christofias told journalists during a briefing.
Christofias brushed aside concern over Cyprus' close relations with Russia. He called Russia a "strategic partner'" of Europe and a "pillar of capitalism."
Cyprus, with a population of 862,000 people, last week became the fifth country that uses the euro currency to seek a European bailout in order to prop up its large, Greece-exposed banking sector.
The country is currently in talks with the so-called "troika" - the body made up of officials from the European Commission, the European Central Bank and the International Monetary Fund - on how much bailout money it will need and the conditions that will come attached.
Locked out of international markets because of its junk credit rating status, Cyprus is paying its bills thanks to a 2.5 billion euro ($3.14 billion) Russian loan that it clinched last year. But that money is expected to run out by the end of the year.
Cyprus needs at least 2.8 billion euro ($3.5 billion) to support its banks, which have suffered huge losses from the write-down on their Greek government bond holdings and their large loan portfolio in the debt-crushed country.
Many Cypriots worry that the European bailout request will lead to the same painful salary cuts and tax hikes that other bailed-out countries, such as Greece, have had to endure.
The European Commission says Cypriot authorities must take action in several areas, including reforming the pension system and a bloated public sector that swallows about a third of all government spending.
Christofias said that he confronted other EU leaders by asking them point blank if, faced with similar financial problems as Cyprus, they would refuse a loan - such as Russia's - that comes with no strings attached.
"I say that entering the European Union's support mechanism, you may get even stricter terms than a loan from Russia," said Christofias. "The Russia of today is not the Soviet Union of the past."
But the Cypriot president stressed Cyprus would not refuse the European bailout loan if it clinches a Russian loan.
(AP) BERLIN - Italian Premier Mario Monti said it's important that his country's high borrowing rates drop, as they are eating into the government's savings and demoralizing the public's faith in budget-tightening measures. But he stressed in an interview published Wednesday that Italy is not asking for a bailout.
German Chancellor Angela Merkel meets Monti in Rome later Wednesday. Last week, European Union leaders agreed in principle to allow Europe's bailout fund to buy bonds on the secondary market to drive down countries' borrowing costs if they comply with EU economic recommendations. The decision was viewed by many as a major climbdown by Merkel, who has insisted that any aid will still come with strings attached.
It was a victory for Spain and Italy, whose borrowing costs had risen to near-unsustainable levels despite their efforts to cut government spending and reform their labor markets. In an interview with the German daily Frankfurter Allgemeine Zeitung, Monti emphasized the importance of getting those costs down.
"Up to a certain level, it is right that higher risk premiums constitute an incentive, almost a whip for more reforms," he was quoted as saying.
"But at the moment the persistently high spreads despite the restructuring steps and reforms mean in Italy that public opinion, businesspeople, politicians and parliament say to the government: You're on completely the wrong path, you have to give up the prescriptions of the Germans," he said.
He warned that if the government's borrowing rates don't fall further and the economy does not emerge from recession, public sentiment in Italy could turn against the idea of European integration and of austerity measures as a way out of the crisis.
Monti stressed Italy isn't asking for a financial rescue or for other European countries to share its debt burden by jointly issuing eurobonds. Germany vehemently objects to pooling eurozone countries' debt in any way, at least in the foreseeable future, arguing that it would lessen pressure on countries to reform and reduce their borrowing costs at Germany's expense.
Monti sought to downplay suggestions that last week's summit was a victory over Merkel.
"I would summarize the whole thing, if at all, this way: Angela plus Mario equals a step forward for European economic policy," he was quoted as saying.
Merkel is traveling to Rome for a regular meeting of the senior officials from the two countries along with several of her top ministers, including the economy and finance ministers.
(MoneyWatch) Here's a riddle: What are the three times in life it is acceptable to lie? When you are an actor in a play, when you are bluffing in poker and when you are giving objections to a sales person.
Overcoming objections is especially difficult because prospects think it is perfectly okay to play it fast and loose with the truth. Let's look at the liars, half-truth-tellers, "concealers," and the delusional hopeful, whose greatest sin is that they lie to themselves first and then repeat it to us.
I don't have science behind me and I am not a poker expert that can read tells. I do, however, tend to think there are some indicators when the conversation is not completely truthful and those hints are worth watching for.Continue »
(AP) MADRID - Spain's ailing banks could get their rescue money within weeks as talks over the terms of their bailout from a European fund are moving swiftly, the economy minister said Tuesday.
Spain will have access to up to 100 billion euro ($126 billion) in rescue loans from the 17-country eurozone's bailout fund for its banks, many of which were stung by the collapse of a real estate bubble and left holding billions in bad loans and foreclosed property.
The terms - including the amounts and interest rates - are still subject to negotiation, however, and will be announced July 9 at a meeting of eurozone finance ministers.
The Spanish government will take the rescue money and feed it to the banks gradually, rather than in a lump sum, and banks will get different terms depending on their financial condition, Luis de Guindos told a breakfast gathering of business leaders and media.
He said the overall loan, which the government will ultimately be responsible for repaying, will carry favorable interest rates and and repayment schedule.
At first, the money will come from the soon-to-be launched permanent bailout fund, called the ESM, and count as government debt. Eventually, once a single European banking supervisory body is created as agreed at a summit last week, the rescue money will go directly to the banks for recapitalization, not adding to the government's debt load.
De Guindos also had cautious praise for an economic statistics that came out Tuesday: The number of people registered as unemployed in Spain went down sharply in June as employers embarked on a hiring spree to prepare for the country's busy summer tourism season.
Spain's Labor Ministry said the number fell by nearly 99,000 to 4.6 million people. It was the third straight monthly decline.
The ministry said in a statement Tuesday that the decline was the largest drop for June ever recorded.
De Guindos called the number good and said "let's hope it consolidates."
The nation's unemployment rate is released separately and quarterly. It stood at 24.4 percent at the end of March - the highest rate among the 17 nations that use the euro. Spain's jobless rate is 52 percent for those under age 25.
The economy was hit hard by the implosion of a real estate bubble in 2008. That caused property prices to plummet and unemployment to spike as construction jobs dried up.
As concern grew that Spain's public finances may be overwhelmed by the cost of rescuing banks - its budget deficit is almost 9 percent, about three times the EU limit - the government was forced to make painful austerity cuts, such as public sector job cuts. That has helped pushed the economy into its second recession in two years.
(AP) NICOSIA, Cyprus - Cyprus says it has begun talks with officials from the European Union and the International Monetary Fund to gauge how much money it needs from the EU bailout fund for its troubled banks.
The Finance Ministry said in a statement Tuesday the officials will meet with government and central bank authorities, as well banking officials, union leaders and politicians over the next few days. It said the meetings are only exploratory and that no negotiations on possible austerity measures will be held yet.
Cyprus last week became the fifth EU country to ask for financial aid from its partners in the common currency union. The tiny island nation needs at least 2.3 billion euro ($2.9 billion) to support is banking system, which is heavily exposed to Greek debts.
(AP) LONDON - Will Britain's EU membership be one more casualty of the continent's devastating debt crisis?
Senior British lawmakers warned Monday that Britain must consider a future outside the European Union as the 17 members of Europe's currency union, which the UK has stayed out of, develop closer fiscal and political ties.
Plans to exit the EU - a policy once advocated primarily on Britain's political fringe - are rapidly gathering mainstream appeal and could dominate debate at the country's scheduled 2015 national election.
"I do not believe that Britain's national interest is served by its current relationship with the EU," Britain's former Defense Secretary Liam Fox said in a speech offering support to growing calls for a national vote on the issue.
Opinion polls show most Britons are deeply skeptical about closer European ties and eager to win back national decision making powers previously lost to Brussels.
Britain last held a vote on its membership of the EU, then the European Economic Community, in 1975.
Fox said that European nations which don't use the euro currency should press for much looser ties to their neighbors, or contemplate quitting the bloc altogether.
"Life outside the EU holds no terror," Fox said, insisting that much like non-EU members Switzerland and Norway, Britain would be able to continue to trade easily with its neighbors.
Prime Minister David Cameron has acknowledged that Britain may need a future national vote on its ties to Europe, but insists that shouldn't happen while the debt crisis is unfolding.
He told lawmakers that Britain's priority must be to "deal with the instability and chaos" sweeping the eurozone, before considering its relationship with its neighbors.
"Far from ruling out a referendum for the future as a fresh deal in Europe becomes clear, we should consider how best to get the full consent of the British people," he said.
However, Cameron said euroskeptics were wrong that the only option for Britain to defend its interests was to quit the EU altogether.
Cameron pointed to his decision in December to veto changes to the European Union treaty, when he was the only leader among the bloc to refuse to endorse a plan for nations to submit their budgets for central review and limit the deficits they can run.
Ex-government minister John Redwood, like Fox also a member of Cameron's euroskeptic Conservative Party, said many British people would welcome a chance to vote to leave the European Union.
While residents in the Eurozone nations "want more EU power over their lives, we intend to have less. We should travel in the opposite direction," he wrote on his blog.
Britain's main opposition Labour Party has suggested it could include plans for a national referendum in its manifesto for the 2015 election. However, the Liberal Democrats - junior members of the coalition government with Cameron's Conservatives - are staunch defenders of European ties.