For Britain, Another Step Away From Europe - NYTimes.com

Has Prime Minister David Cameron of Britain hurt his country’s powerful financial services industry more than he has helped it? Many bankers and economists are pondering that question after Mr. Cameron’s surprising decision last week to leave Britain out of a historic accord aimed at moving Europe closer to political as well as monetary union.

Mr. Cameron said the pact lacked safeguards to protect the City of London, Britain’s version of Wall Street, against future regulations that might not be in its best interests. And because France and Germany would not bend on his proposed protections, he would not sign on to their plan for more tightly coordinated oversight of European Union governments’ revenue and spending. some analysts nonetheless worry that Mr. Cameron’s desire to espouse the stubbornly independent British bulldog could harm the City over the long term.

“This is the worst possible news — the relative decline of the City of London relative to other financial centers in Europe is now a very real risk,” said Graham Bishop, a former London banker who is a consultant on European financial and regulatory matters. The decline will not happen at once, he argued. Europe is well aware that financial institutions in London have strong and deep links to the Continent.

But Britain, whose refusal to adopt the euro currency has long put it somewhat at odds with the European Union’s other biggest economies, appears to have estranged itself further from Europe’s policy inner circle.

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