FT Letter: EU would be criticised if it did not make these reforms

Sir, David Lascelles' claim (December 10) that the European Union reform treaty will jeopardise the success of the City is far-fetched. The proposed treaty does not change anything directly in economic policy. It makes a series of pragmatic reforms to the EU's institutions. There is no doubt that if the EU did not make these reforms it would be criticised for a failure to modernise. Nor has EU regulation hampered the development of London as the world's pre-eminent financial services market.

The changes in the treaty, far from damaging the UK financial services community, may well serve to benefit it. The UK's vote in the Council of Ministers increases from 8.4 to 12.2 per cent. The greater role for national parliaments will increase democratic accountability, and also provide another lobbying channel for the financial services community. It will create an extra opportunity for the UK to align with other countries if something was being proposed that would be detrimental to its national interests.

The increase in EU membership to 27 members necessitates a streamlining of the Commission. The number of commissioners will be reduced to two-thirds of the total membership by 2014. The commissioners are not national representatives, and in any case the UK's free market vision is shared by many others than just Peter Mandelson. Indeed Charlie McCreevy, the commissioner for the internal market, who is from Ireland, is widely credited with favouring light-touch principles. It is instructive that neither of the commissioners involved in the development of the markets in financial instruments directive was British. While no one suggests MiFID is perfect, the UK's voice was strongly heard and listened to in the framing of this legislation.

The reform treaty's changes to EU institutions should help the financial services community. The EU has shown its capability and willingness to take action to strengthen the single market and should be encouraged to continue on this track.

Roland Rudd, Chairman, Business for New Europe