Prime minister believes Britain needs to be careful amid fears that euro countries will join forces to impose will on rest of EU
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David Cameron is in Perth for the Commonwealth summit, but his mind is on matters back in the EU. Photograph: Reuters
The warm late spring sunshine that greeted David Cameron as he flew into Perth on Friday morning was a rare treat for the prime minister after the intense negotiations on the future of the euro.
The sun and the calm atmosphere in the Australian city, where streets have been closed to all but official vehicles for the Commonwealth heads of government meeting (Chogm), will no doubt give Cameron respite. For a day or two he will be able to set aside his euro briefing papers as he outlines his plans to end male primogeniture in the royal succession.
But it is pretty clear that Cameron's mind remains focused on Europe. In the not too distant past British prime ministers would usually herald their arrival at Chogm with an article, possibly written jointly with a fellow Commonwealth leader, saying that the time had arrived to rejuvenate the body, these days composed of 53 member states – Fiji was suspended in 2009.
This prime minister had not written a word about Chogm ahead of his arrival in Perth. This is not meant as a slight to the Queen who takes the Commonwealth incredibly serious as she seeks to live up to her commitment in 1947, delivered during a visit to South Africa on her 21st birthday, to act as "your representative".
It is simply that this year's meeting is sandwiched between two events where vital British interests are at stake: the crisis talks in Brussels on the euro and the G20 summit in Cannes over the first weekend of November. Traditionalists who yearn for a time when Britain might have turned its back on the continent and embraced its former colonies will be disappointed.
The prime minister may be a eurosceptic. But he is no romantic and he knows that Britain's destiny lies in Europe. He does feel, as the chancellor, George Osborne, indicated on Thursday, that the EU is changing and Britain needs to be careful.
Downing Street has two key concerns:
• That the 17 members of the eurozone will meet ever more frequently and seek to muscle the EU's 10 non-euro members into accepting decisions. This is known in the Foreign Office as "caucusing". Officials have pointed out that the 17 would probably be able to muster a majority under the qualified majority voting (QMV) for any decision where unanimity is not required.
• Moves towards greater fiscal co-ordination in the eurozone will change the nature of the single market, to the possible detriment of Britain and the City of London.
Cameron voiced these concerns on his way to Chogm as he spoke of how he is working with other key EU countries outside the eurozone – mainly Sweden and Poland – to ensure that the voices of the 10 are heard. This is what he said:
As the 27 we need to make sure that the single market is adequately looked after. There are a lot of things the eurozone is doing together – having more meetings alone, establishing machinery. It raises the question of could there be caucusing.
There is common agreement that this was an important issue and that we should be working together to make sure the arrangements provide a safeguard.
It is very important that the institutions of the 27 are properly looked after and that the [European] Commission does its job as the guardian of the 27.
London is the centre of financial services in Europe. It's under constant attack through Brussels directives. It's an area of concern, it's a key national interest that we need to defend.
Cameron, who met his Polish and Swedish counterparts for dinner in Brussels on Wednesday night, will have been advised by the Foreign Office that joining forces with the 10 countries outside the eurozone will only take him so far. Only three powers really matter in the EU – Germany, France and Britain – which means that Cameron will have to work with Paris and Berlin, or against them with more powerful forces than Poland and Sweden.
The prime minister appears to have two thoughts in mind on this front:
• The European commission must not become a plaything of the French and Germans. Cameron's remarks about the need for the commission to do its job as the "guardian of the 27" will be noticed in Brussels. He is reminding the commission that one of its principle duties is to act as the guardian of the EU treaties.
• Wielding the British veto to protect the City of London. France and Germany would dearly love to downgrade the City's position and there are negotiations on directives at the moment which could have an impact on it. Britain struggles in this area because these are decided by QMV which means Britain has no veto.
But Britain will have a veto if a narrow treaty change is made, at the insistence of Germany, to place any new eurozone fiscal rules on a legally watertight footing. Cameron could say to Angela Merkel, the German chancellor, that she can have her treaty change if she will protect the City. Cameron did exactly the same back in March when he told Merkel she could have a treaty change – to make the eurozone bailout mechanism permanent – on one key condition: that Britain would have no role in the small overall EU element of the bailout. Alistair Darling, when he was chancellor of the exchequer, had to accept British involvement in this part of the initial bailout package because it was decided by QMV.
Britain may have its concerns about its position in the EU. But the rest of the world simply has fears about whether the euro will survive.
The significance of the eurozone crisis is demonstrated by the front page of Friday's edition of the Australian newspaper. It features a big picture of Merkel at Wednesday's Brussels summit under the headline: "Europe steps back from brink".
The only reference to Chogm is a small picture of the Queen to puff a piece inside on why "it's OK to love the Queen". Perhaps Australia is falling back in love with the monarch who was at her best on Friday morning as she opened Chogm.