Angela Merkel has given David Cameron a great opportunity to renew his Eurosceptic credentials

The Eurosceptics said it would happen and again they've been proved right. Left-wing advocates of the € said that monetary union was a technical thing and suggestions that political union would inevitably follow were scare-mongering.

In the last few days we have learnt that Merkel and Sarkozy want the EU to assume responsibility for the "economic government of Europe". That basically means control of fiscal policy. The Greek economic tragedy has taught the obvious - you can't have irresponsible members of the eurozone (like Greece) free-riding on other nations' fiscal responsibility (like Germany).

So, first step monetary union. Fiscal union follows as the logical next step. And, then inevitably, some sort of political oversight of that fiscal union becomes necessary.

New economic powers for Brussels would require a new European Treaty. Should the Tories welcome this or worry about this? Given we are out of the Euro (thanks, in large part, to William Hague and his leadership from 1997 to 2001) the implications for the UK are not immediate but as an EU Member we would need to approve the Treaty change.

Speaking to The Times, Shadow Europe Minister Mark Francois confirms that the British people would get a vote on this change if the Tories win office:

“There is no clear proposal on a treaty. As we have set out, we would change the law so that any treaty that handed over areas of power from Britain to the EU would be subject to a referendum. That is our firm and clear position.”

I see a big opportunity for the Conservatives if the German Chancellor is serious about wanting these new fiscal powers for Brussels. David Cameron should say that he'll give Merkel and Sarkozy their "economic government" - so long as it only affects Eurozone members - but there'll be no Treaty unless Britain gets opt-outs from Lisbon. Deal or no deal, Angela?

Tim Montgomerie