I blogged yesterday that if it was an E17 deal, Downing Street was ready to press for EU institutions – Commission, ECJ – to be respected, and therefore Britain's voice to be respected. Who knows what happens now? As Nick Watt reports overnight from the Belgian capital, the break point for Cameron (who kept Nick Clegg and George Osborne in touch) was the need to protect the British financial services industry – our equivalent of BMW and Mercedes Benz, 10% of the UK economy – in ways the EU majority do not want to. The French are very angry – one French diplomat says that Britain is acting "like a man who wants to go to a wife-swapping party without taking his own wife". An interesting comparison that one, which suggests that Dominique Strauss-Kahn's corrupting influence in French public life may be even wider than appreciated. But if the result is new institutions for the 23 (or the 25), then this looks less like a two-speed Europe and more like British withdrawal. Hague may not be crowing because he's got what he always wanted and Lady Thatcher would want too if she's still watching TV: a free-trade relationship with Europe, a bit like Switzerland, one Tory MP – the wonderfully named Mark Reckless – suggests. Is the European commission weakened, bypassed even, by what is in the process of being sewn up in its home city this weekend? Instead, France and Germany will lead the 17 eurozone countries and six stringers in a new treaty. ECONOMIC CATASTROPHE 
 
 Then there is the question that matters most: where does Britain stand in the EU and globally? Speaking earlier, Mr Cameron said that: "What is on offer isn't in Britain's interest so I didn't agree". Cameron had no mandate to isolate us, he is already saying. The question that remains is whether that decision will lead to a solution of the crisis.
– David Cameron's decision to exercise Britain's veto and sit out negotiations on a new EU treaty is being seen as a momentous move, even if the ramifications aren't quite clear yet: New York Times: The decision "has left Britain as isolated as it has ever been in postwar Europe and effectively left out of future European decisions," write Sarah Lyall and Julia Werdigier. They add, however, that "there was widespread confusion over what this all actually means." Guardian: "I do not hear the sound of champagne corks or celebration among British Eurosceptics," writes Michael White. "Beware of what you wish for, is a wise saying. Who knows what happens now? But Europe, for all its follies and failings, has become a scapegoat for weaknesses that are really our own. We may be about to rediscover that awkward truth. It was why we joined in the first place." Global Post: "Britain will not be part of the negotiations defining the new fiscal union, setting the stage for a two-tier Europe. Britain’s opt-out is a monumental development for Europe, and a significant defeat" for Cameron, writes Michael Goldfarb. Germany, France, and Britain always found a way to find a deal in the past, but this time there was no leeway "to fudge and play politics with the solutions." Telegraph: "Mr. Cameron was right to reject a deal designed by the French, for the French," blogs Benedict Brogan. "At the heart of this dispute is France's desire to see Britain out of the EU, and (London) marginalized. That was why they loaded the package with elements Britain could not accept. Downing Street officials are clear about what the French are up to, and why the Prime Minister had no choice but to say non."