David Cameron defends 'make up or break up' euro warning

 

PM: "The eurozone... either has to make up, or it is looking at a potential break-up."

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David Cameron has said there will be no retreat on deficit reduction - and that he was right to speculate publicly about the break up of the euro.

He told business leaders in Manchester that it was "more dangerous to stay silent than to speak out".

The prime minister later discussed the crisis with other European leaders including Angela Merkel and new French President Francois Hollande.

Labour says the recession is caused by coalition policies not the euro crisis.

Mr Cameron raised eyebrows at Prime Minister's Questions on Wednesday when he warned the eurozone it "either has to make up or it is looking at a potential break-up".

Chancellor George Osborne has repeatedly warned against speculating about eurozone break-up, saying it would cause instability amid Greece's ongoing inability to form a government able to push through austerity plans.

'Genie out'

But he told MPs earlier on Thursday that the Greek elections had "let the genie out of the bottle" and "some of the things we were happy to say in private we are now also willing to say in public because the issue is out there".

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The coalition believed that it was winning the argument on deficit reduction, but fears it is in danger of losing the argument on growth.”

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"We have very clear ideas about what the eurozone needs to do to make their currency work," he added, saying he backed austerity measures in "peripheral" countries but also wanted to see the "core of the eurozone" do more "to support demand".

Mr Cameron discussed the eurozone situation with Mr Hollande, Mrs Merkel, Italian Prime Minister Mario Monti and EU officials in a conference call ahead of the forthcoming G8 summit in the United States.

The BBC's political editor Nick Robinson said the prime minister had reiterated the importance of decisive action to sort out the eurozone and to prevent contagion and repeated the key points of his speech.

But he said No 10 had refused to say whether Mr Cameron used the phrase "make up or break up" during the 45-minute conversation.

'Contingency planning'

Downing Street has disclosed that the National Security Council has been involved in contingency planning in case of a worsening situation in Greece and the eurozone.

A spokeswoman said the Treasury had been drawing up contingency plans "for some time" but when asked whether there'd been any planning to deal with "civil strife" she said: "Certainly the national security council has, in the past, looked at issues regarding the eurozone."

In his speech in Manchester, Mr Cameron said it was "essential to speak out about what needs to be done to safeguard the eurozone, to safeguard Britain, to take the steps to make sure we deliver the strong and stable economic growth that we want".

Describing the situation in Greece as a "crisis that never really went away", he said the eurozone could find itself in "unchartered territory" unless it took steps to strengthen its banks and protect its weaker members.

"As I have consistently said it is in Britain's interest for the eurozone to sort out its problems," he said.

"But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system."

'Bystander'

He defended the coalition's austerity measures, saying the programme of spending cuts, tax rises and pay freezes was already having the desired effect of reducing the deficit.

"Let me be clear, we are moving in the right direction - not rushing the task but judging it carefully. And that is why we must resist dangerous voices calling on us to retreat.

Earlier, Business Secretary Vince Cable said Britain "shouldn't be panicking or be unduly negative" about the crisis in the eurozone.

"We need to get the risks in perspective," he told BBC Breakfast, adding there was no reason the crisis should spread beyond Greece.

But Labour said the UK government had become a "bystander" to events in Europe.

"David Cameron isn't part of the solution, he is part of the problem," opposition leader Ed Miliband said. "He promised Britain there would be recovery and he has delivered a recession.

"All of Europe's leaders, including David Cameron, bear responsibility for the fact that over the last two years they haven't sorted out the problems of the eurozone and they haven't had a proper plan for growth and jobs."

 

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  • rate this
    +1

    Comment number 984.

    Personally I can't thank Greece enough. The Eurozone was failing long before this current debacle, the Greek situation has just accelerated the inevitable. Cameron is juvenile in his ability to ignore common sense advice, they're old hands at it in Europe.

  • rate this
    +1

    Comment number 983.

    Whilst I agree it is in all of our interests to have a stable Eurozone as a major trading partner, just throwing money at it doesn't seem to have worked for the last 3 years so unlikely continuing to do so will work any better. Anyone recall that old TV ad "Now you can borrow enough money to get completely out of debt"!?!? Maybe we should try something new?

  • rate this
    +1

    Comment number 982.

  • rate this
    +7

    Comment number 981.

    "959.Ace-Duke
    The only party to have told the truth over the years has been UKIP."

    That'll be the UKIP who's members invariably fly the cross of St. George over their German car and UKIP posters every election to show us their dedication to their fellow countrymen?

  • rate this
    +3

    Comment number 980.

    Mr Cameron can shout all he likes, he has lost credibility in the UK over Europe, as have most politicians. The British people were promised a referendum on Europe by ALL THREE political parties, and all three including Mr Cameron reneged. They all gave politician reasons, but the bottom line is they reneged. The debacle that the Europe is causing to savings, pensions, and investments is criminal.

  • rate this
    +5

    Comment number 979.

    Whether Greece leaves the Euro or not, the Eurocrats are determined, come what may, to create a United States of Europe, with a President who would be political, administrative, and spiritual leader of all European citizens.

  • rate this
    0

    Comment number 978.

    20.Pete
    I have to say I agree with DC for a change. The Euro has been a complete utter fiasco from the very beginning without any visible means of support.
    ////////
    I wonder what people base this kind of statement on. It was doing quite well but suffers from the crisis. So well as a matter of fact that one wonders if it's not the US trying to bring it down, like it did with Britain over Suez.

  • rate this
    +9

    Comment number 977.

    567.Disgusted of Tunbridge Wells
    "...[the Germans] need to realise that we are not there to be milked whenever their project runs into difficulties"

    I agree. Just like the bankers - milking taxpayers, whenever they get into difficulties - difficulties making money, that is!

  • rate this
    0

    Comment number 976.

    The only reason cameron does this is part of his PR calculations that he needs to keep his right wingers happy with a spot of euro-bashing. He knows as well as anyone else his words bear zero weight in Europe & everytime he does something like this his influence drops still more. Let's hope we don't ever need any favours from our European partners!

  • rate this
    +1

    Comment number 975.

    I'm afraid that DC's priority is to make himself look good and convince the British public he knows what he's doing. How many people does it take to tell him that sitting on a white horse, sword in hand defending his actions and saying he is putting Britain first is a very cynical attitude. He cannot protect us from Greece or the global economy and the sooner he realises it the better for all.

  • rate this
    +15

    Comment number 974.

    the only way to save the euro is to distribute the wealth and opportunity for growth. Germany and France have taken all the oppotunities Greece etc were left with tourism that would be decimated by the single currency. much the same as we talk about the North/South divide, they must make the choice to either support Greece with their wealth or create a manufacturing base for them to build on

  • rate this
    +3

    Comment number 973.

    Labour built an economy on sand. Increasing borrowing, spending, and public sector workers. It produced 10 years of boom then a bust.
    Whereas Ireland built an economy on business rates that were attractive to entrepreneurs and overseas investment. It created a flourishing private sector based on manufacturing and exports. The "celtic tiger" had 10 years of boom, then an even bigger bust.

  • rate this
    +3

    Comment number 972.

    Nothing has changed with the Euro crisis, nothing has happened that all Politicians in all countries did not know would happen, to start making out that it is sudden threat is simply decietful. As for putting Britain first ! what the heck else have they been putting before Britian ? Big Business ? the Tory party ? Rupert Murdoch ? OK who else beside them.

  • rate this
    -2

    Comment number 971.

    945. Under-Used
    Taxation in the UK is unfair. Corporations, SMEs and other business' contribute a meagre 10% to the tax take"

    That's a bit distorted. Their PROFITS contribute 10%. Overall, they contribute about 100%...

    Increase corporation tax too much, and they may incorporate in a different country, reducing our tax intake dramatically.

  • rate this
    -2

    Comment number 970.

    As far as Britain is concerned, no-one is arguing against deficit reduction; the problem is that the ToryDems are going about doing so in a Tory way - by attacking the old, the young, the poor and the vulnerable. The Greeks have thrown that vicious policy out wholeheartedly. We should do the same, and make the broadest Old Etonian and City backs bear the heaviest burdens.

    Solidarity Forever!

  • rate this
    -1

    Comment number 969.

    More cliches from Dave, and what does it all mean? His version of events is that we are poised to reap the reward of his wise policies.
    Many disagree and see only that the Tories saw the financial crisis as an opportunity to reorganise in favour of the rich.
    The facts are with the latter view: benefit cuts for the poor and weak; tax cuts for the rich and powerful.
    Recession, but for the haves.

  • rate this
    +7

    Comment number 968.

    940 - Government stops spending money - tens of thousands in the private sector get thrown out of work. The taxpayer then has to support them.

    Like it or not thats the way it works.

    The private sector and public secor do not exist in isolation. There is no monopoly of virtue in either. Private sector is certainly not automatically more efficent - rail ought to tell you that

  • rate this
    +4

    Comment number 967.

    951 - mmm yes lets compare incredibly complex entities like national economies with the purchase of a single product by a few people.

    next lets compare national economies with running of a houshold budget - a favourite ploy of the tories and their silly supporters - clearly they are just the same.

    i despair....

    Cameron is a clown and loks utterly lost.

  • rate this
    -1

    Comment number 966.

    Haggisha 562 from your I.D. another Scot who doesn't understand economics only the politics of envy.

  • rate this
    +2

    Comment number 965.

    Cameron wanted a diversion from the "LOL" embarrassment, and now he has one and can be all grown up again. The tragic irony is that the UK needs protection from its own government i.e. the one that took us all back into recession, not the Eurozone. This is just more big, populist talk from someone posturing as "Prime Minister". Get back to texting your chums Dave - it's about all you're good for.

 

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