David Cameron has a deal with Europe that's just about worth the paper it's written on. The UK prime minister emerged on February 19 with a way of forcing the 27 other members of the European Union (EU) to re-examine financial reforms that it doesn't like. But it probably won't mean unfriendly rules can't get through - and it won't ensure Britons vote against leaving the union.
Cameron's deal encompasses other areas like immigrant benefits and commitments on UK sovereignty. But the bit that most affects Britain's financial sector is a new unilateral "safeguard". If Britain thinks a new reform damages its interests, it can force European leaders to gather to discuss the issue. This is a progress of sorts: an alternative likely scenario was that the lever could only be pulled by Britain and one or more countries acting together.
What Cameron hasn't changed is a more fundamental imbalance. Euro zone countries' financial systems are growing closer via a beefed-up banking union, in accordance with the ongoing goal of harmonisation towards a more efficient single market. A voting system introduced in 2014 means euro countries can outvote those outside the currency union via the European Council's qualified majority system.
Imagine euro zone legislators decide all bankers have to speak French, to the certain chagrin of the City. The new deal would allow Cameron to call a meeting of the 28 states to debate the issue further, which might change minds. But there would be no obligation for them to shift their positions, and the voting imbalance would stop the UK being able to reverse the edict.
It's arguable that all this doesn't matter too much. Lots of the really important European financial legislation takes its cue from global regulatory groups, where the UK has negotiating influence. And there's value in putting in writing that the financial stability of countries outside the euro zone is a matter for domestic supervisors.
Either way, the health of the City is unlikely to be a vote-winner in Britain's forthcoming referendum over whether Britain stays or leaves the EU. Cameron probably hasn't changed the odds of "Brexit" much. But the financial sector has marginally more clarity about its European rules of engagement.
