'UK will help Europe with crisis'
Britain will work with its European partners to tackle the financial crisis affecting the eurozone, Foreign Secretary William Hague has pledged.
But the new Government will not agree to any further "transfer of sovereignty or powers" to the EU over the course of this Parliament.
"Sanctions for breaches of the stability and growth pact may be the right way forward for our partners in the euro area."
"But they should never apply to those countries which retain their own currencies - and this country will retain its own currency," he warned.
In a debate on European affairs ahead of a European Council summit later this month, Mr Hague promised to be more "robust" than the previous Labour government in defending Britain's national interest.
And he disclosed that a new Cabinet committee on European affairs would be set up, chaired by the Foreign Secretary, to take a "more holistic approach" to EU issues.
Mr Hague said the main issue before the summit was the economic situation, with several member states facing "severe fiscal difficulties" and growth across Europe being "anaemic".
He said: "The Government has made clear that we will stay out of the euro. But the EU is our single biggest trading partner and problems in one member state affect us all...
"The major issue now dominating discussion of European affairs is the difficulty facing the eurozone. A strong and healthy eurozone is in this country's interests. Much of our prosperity depends on our neighbours' prosperity."