Prime Minister David Cameron on Thursday renewed his call foreurozone leaders to take decisive action or face the break up of the single currency over the Greek debt crisis.
In a speech in Manchester, Cameron urged core countries in the 17-member eurozone, of which Britain is not a member, and theEuropean Central Bank to support demand and cut deficits.
Cameron admitted that his message would be unpopular in Europe where he angered many leaders by delaying a fiscal treaty last year, but said his priority was to protect Britain.
“The eurozone is at a crossroads,” Cameron said in the speech to business leaders.
“It either has to make up or it is looking at a potential break-up. Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone.
“Or we are in uncharted territory which carries huge risks for everybody.”
Cameron was due to hold a videoconference with German Chancellor Angela Merkel, new French President Francois Hollande, Italian premier Mario Monti and the top EU officials later Thursday.
The meeting was called to discuss the upcoming G8 meeting of industrialised nations in the United States at the weekend, but Cameron’s Downing Street office said the eurozone was likely to come up.
Fears of a Greek exit from the eurozone have spiked after voters on May 6 supported anti-austerity parties that want to tear up an EU-International Monetary Fund bailout agreement and reverse harsh austerity measures.
The British premier said he was open to new ideas to promote growth along with eurozone leaders.
“I welcome the opportunity to explore new options for such monetary activism at a European level, for example through President Hollande’s ideas for project bonds,” he said.
But he urged the eurozone to become more competitive, support demand through loose monetary policy and cut its deficits.
“I realise that countries inside the eurozone may not relish advice from countries outside the eurozone — especially from countries, such as Britain, that have debts and difficulties of their own. But this affects us too,” he said.
“As prime minister, I will do whatever it takes to keep Britain safe from the storm,” said Cameron, whose Conservative party is largely sceptical on Britain’s membership of the European Union.
Cameron infuriated many European leaders in November last year when he vetoed a new EU fiscal treaty. The rest of the bloc eventually went ahead without Britain.
Cameron meanwhile restated his coalition government’s commitment to austerity.
“Those who argue we should spend more want us to borrow more, driving up our deficit and our debt and putting our hard-won credibility and low interest rates at risk,” he said.
But in a sign of concern about growth, he said he had asked the finance ministry to “examine what more we can do to boost credit for business, to help housing and infrastructure.”
The Bank of England on Wednesday warned that the eurozone debt crisis was the biggest threat to Britain’s economic recovery, even if a credible solution is found.
BoE governor Mervyn King said the eurozone was “tearing itself apart without any obvious solution”. (*)
SOURCE : AFP
Posted Thursday, May 17, 2012