G8 Summit: PM David Cameron joins talks over eurozone

Suggestions of a rift between the two leaders were played down

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UK PM David Cameron will later join other world leaders at the G8 summit for talks on the eurozone crisis, amid signs a deal is unlikely to be reached.

"Decisive action is needed by the eurozone. They cannot go on kicking the can down the road," the PM said.

Mr Cameron also warned French President Francois Hollande that Britain will not accept a tax on financial transactions.

Speaking in Washington ahead of their first meeting, Mr Cameron said it was not a "sensible measure".

The world leaders will gather on Saturday morning for talks expected to be dominated by the eurozone turmoil.

BBC political correspondent Norman Smith, at the summit, said despite the rapidly unfolding crisis there was no sense that a solution was in the offing.

'In Britain's interest'

Mr Cameron said eurozone leaders needed to take swift action to resolve the crisis over Greece.

"Decisive action is needed by the eurozone. They cannot go on kicking the can down the road," he said.

"This is in Britain's interest too because we want to have a successful growing eurozone on our doorstep and not the instability we have now."

Meanwhile, the government's chief economic forecaster has suggested an exit by Greece from the single currency could do irreparable damage to the UK.

Robert Chote, the chairman of the Office for Budget Responsibility, told the Guardian that a second deep recession was possible, one that would leave permanent scars.

Mr Cameron and Mr Hollande met for the first time at the residence of the British ambassador in Washington, before travelling on to Camp David in Maryland for the summit.

Although the talks were described by officials as "friendly" the two leaders have differing views on the issue of the financial transaction tax, which formed a key part of Mr Hollande's election campaign.

Downing Street played down suggestions of a rift, saying the talks were "not awkward".

'Any possible option'

Speaking ahead of their meeting, the prime minister made clear his opposition to Mr Hollande's demands for the tax.

He said: "We are not going to get growth in Europe or in Britain by introducing a new tax that would actually hit people as well as institutions.

President Barack Obama and David Cameron at Camp David President Barack Obama welcomed G8 leaders to a dinner at Camp David

"I do not think it is a sensible measure. I will not support it."

Following the meeting, Mr Cameron reiterated their commitment to tackling their deficits while promoting growth.

"We both want to see stability in international markets, we both want to see countries deal with their deficits and we both want to see economic growth," he said.

He said they had "reaffirmed the importance of the strong relationship between Britain and France".

Mr Hollande said they must consider "any possible option" at the forthcoming European Council to rebuild their economies without adding to their deficits.

"We need to continue improving our public accounts while restoring growth. We will consider every possible option," he said.

He stressed that he hoped Greece would be able to stay in eurozone.

"We would like Greece to remain in the eurozone but it is for the Greek people to answer that question," he said.

"But my response is that we should do everything to ensure they answer 'Yes' to that question."

'Happy to meet'

Mr Hollande confirmed that he would be withdrawing French combat troops from Afghanistan this year in line with his election promise, although he said they would continue in a training role.

Mr Cameron said that he had invited Mr Hollande to visit London to discuss issues on their joint agenda, and to meet the Queen.

He said they had also discussed Afghanistan, Syria and Libya, and said the two countries would continue to work together "strongly".

Mr Hollande referred jokingly to Mr Cameron's refusal to see him during the election campaign, saying: "I couldn't meet David Cameron before the elections - I am all the happier to meet him afterwards."

Labour leader Ed Miliband - who met Mr Hollande in London during France's presidential campaign while Mr Cameron backed Nicolas Sarkozy - said Mr Cameron could not help to solve the crisis in the eurozone "because he is such a central part of the problem."

Writing in Saturday's Financial Times, Mr Miliband accuses Mr Cameron of "crass arrogance" which "makes you wonder on what planet the prime minister is living."

The Labour leader added that "Italy aside, Mr Cameron is the only leader at the G8 who has led his country into a double dip recession" and claims his actions have led to "recovery turning into recession, no growth for almost two years, a million young people out of work and borrowing forecast to be £150bn higher than planned as a result."

World leaders are meeting to discuss the eurozone crisis, global trade and foreign policy at the G8 summit.

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