George Osborne: We'll use euro crisis to boost British interests - Telegraph.co.uk

Mr Osborne's pledge comes in the wake of a demand by a group of newly-elected Conservative MPs, led by Chris Heaton-Harris and George Eustice, for Britain to adopt a "bold new EU strategy" and push for wholesale reform of the Union.

Any move towards greater fiscal integration inside the eurozone would be likely to requite changes to the Treaty of Europe, which currently stops Brussels taking control of the finances of any EU members states.

Under legislation passed by parliament this month, such a move could trigger a referendum in Britain. At this point, Mr Osborne and David Cameron could begin to push for concessions from Brussels in other areas.

As well as demanding a say over regulation of financial services – crucial for the City of London – Britain would be likely to demand to keep its EU rebate and possibly opt-outs from EU regulations governing workers' rights.

In his article, Mr Osborne does not use the "r" word – renegotiation – possibly for fear of sparking protests from his Liberal Democrat coalition partners.

Nick Clegg, the Deputy Prime Minister, signalled last week his party could try to block any move for Britain to water down its membership of the EU.

However, he writes: "We must get the EU focused on a positive agenda that matters to its citizens, like jobs and prosperity, by being a competitive continent in which to do business.

"By keeping out of the Greek bail-out and the permanent bail-out mechanism, this Government has protected British interests while working with the eurozone.

"We will continue to take the same constructive yet hard-headed approach in the future."

Mr Osborne has also announced a cut in the interest rate the British government is charging Ireland for its emergency bail out loan, a decision which could cost the taxpayer up to £400 million.

Of last week's eurozone bail out, the Chancellor writes: "I believe the events of this week mark something of a turning point.

"The most significant decision the euro leaders took was to expand the scope and powers of the eurozone's bail-out fund. It can now buy the debt of countries in distress and fund bank rescues.

"President [Nicolas] Sarkozy describes it as a form of monetary fund for the euro. It is also another step on the road to further fiscal integration.

For Euro-sceptics like me, that shouldn't come as a surprise: we always argued that joining the euro would lead to fiscal integration and a resulting loss of sovereignty."