Eurozone crisis: Cameron backs euro but opposes more integration

 

UK Prime Minister David Cameron: "Urgent action is needed"

David Cameron has said he wants the euro to succeed but insists the UK will not be part of further integration seen as "necessary" to help it continue.

Speaking in Berlin, ahead of talks with Chancellor Angela Merkel, the prime minister said the UK's "healthy growth" was linked to the eurozone's fortunes.

But he said the UK would not underwrite Spanish and Greek bank deposits or support an EU-wide financial tax.

Mrs Merkel has suggested that further political union was a pre-condition.

Mr Cameron has said the uncertainty surrounding the eurozone is the biggest threat to global prosperity and a "whole series of measures" is needed to restore market confidence in the ability of countries to pay their debts and support banking liabilities.

Analysis

David Cameron has deliberately avoided piling direct pressure on Germany to shoulder all the responsibility, saying he felt it wasn't right to single out one government.

But he has sought to keep up the pressure in other ways by saying that time was of the essence and the eurozone crisis was the single biggest threat to the world economy.

That message has been backed up by President Obama, who called both the German chancellor and the Italian prime minister the diplomatic equivalent of banging heads together.

In truth, though, the urgency of the situation is not in doubt - it's the means to resolve it where disagreement can still be found.

For example, Germany doesn't like the idea of bailing out Spanish banks directly - Spain doesn't like the idea of taking money with strings.

David Cameron will have to tread a delicate path - being outside the eurozone club he cannot dictate terms, but he's also all too aware that a quick solution is vital for stability and growth at home.

The UK is pressing for a series of solutions, including a larger bailout fund, euro bonds and structural reform within the European Union - which could lead to greater fiscal burden-sharing between the poorest and wealthiest countries.

The prime minister said all Europe's economies, whether in the euro or not, needed a swift resolution of the current instability, and the single currency area as a whole needed to act to demonstrate it could "live within its means".

"We want the euro to succeed and the eurozone to solve the problems it faces so that all European countries - including ours - can get back to healthy growth."

The UK has welcomed plans set out by the European Commission to move towards a common "banking union" across the eurozone - which could allow central authorities to intervene before a bank gets into trouble to prevent taxpayers having to bail it out later on.

'Not our currency'

The prime minister said there was "no doubt" the eurozone would have to work more closely together on banking supervision and in other areas in future as "we know that it is necessary for the single currency to deal with these issues so it can work properly in the future".

But he stressed that the UK - which is not a member of the eurozone - would not be taking part and it was his job to protect British interests as Europe evolved.

"Because we are not in the single currency, we won't take part in the profound elements of that banking union. I wouldn't ask British taxpayers to stand behind the Greek or Spanish deposits. It is not our currency, so that would be inappropriate to do."

UK Chancellor George Osborne said he wanted to ensure safeguards were in place to protect Britain's financial sector if there were moves towards a banking union.

"There is no way that Britain is going to be part of any eurozone banking union," he told BBC Radio 4's Today programme. "I think Britain will require certain safeguards if there is a full blown banking union."

He stressed the UK coalition government's commitment to a referendum on Europe in the event of a "significant transfer of power and sovereignty" to the EU but said he did not believe that would necessarily happen as a result of the current negotiations.

Mrs Merkel told German television on Thursday that Europe needed "a political union first and foremost" and that individual countries must "cede responsibilities to Europe step-by-step".

But at a joint press conference with Mr Cameron, Mrs Merkel said different EU countries had taken part in different aspects of political and economic integration in the past, and this approach would continue.

 

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  • rate this
    +3

    Comment number 512.

    It is, and always has been, blindingly obvious that the Eurozone was never going to function properly without greater political union. The real problem is that no one ever came clean about it and now member states will be railroaded into what will effectively become the United States of Europe.

    The bigger problem is that I severely doubt that the European electorate is ready for it, or wants it!

  • rate this
    +1

    Comment number 511.

    Saving the Euro.............flogging a dead horse.

  • rate this
    +2

    Comment number 510.

    What he really means is, "My friends and I all want the Euro to collapse so we can feel superior, scoff at the idea of unification, and claim victory for my (the) press. Rule Brittania, let's get back to Dickensian times, survival of the fittest, and sell, sell, sell all the UK assests to our rich chums".

    "Call me Pinocchio Dave, power is my agenda, at all costs"!

  • rate this
    -2

    Comment number 509.

    Tories now say it will take a "significant transfer of power and sovereignty" to the EU before a referendum is allowed. Their manifesto clearly said "no further areas of power should be transferred to Brussels without a referendum" If a party, particularly one that is in government, lies to the people in such blatant fashion on such an important issue, they should be punished heavily at the polls.

  • rate this
    0

    Comment number 508.

    Look I know people love a good EU, Eurozone bashing, but I caution us all not to fall into that; After all when you consider the fact that millions of us go on holiday there, eat fry ups at hotels and bars with our HP sauce, whilst visiting pals in their holiday home’s, it is very hypocritical for us to do this, we love the visa less benefits, but do not like the reality.

  • rate this
    +2

    Comment number 507.

    467.Le Bloke
    No - the euro was a daft idea, supported by fools who thought themselves clever, and who are now being proven wrong, but can't admit it.
    /////
    It isn't. And it ain't over until the fat lady sings. You better wish she won't. Ever.

  • Comment number 506.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 505.

    @42. piscator. Absolutely. A reason why UK gave up on industrial policy was that it cut out the 'problem' of unions by shipping jobs overseas to lower-paid workers. It's totally logical for profit. Why pay more? Unfortunately, if you want a stong, real economy, you do actually have to think about unemployment, decent jobs, a living wage, etc. Unfashionable thinking these last 30 years.

  • rate this
    -3

    Comment number 504.

    To those that keep saying that Cameron is not listened to as we are not in the Euro - WRONG - we are not a tin pot southern European country in receipt of EU millions, we are a significant contributor and without our cash the whole house of cards will fall apart. Mrs M knows this and therefore has to appease the UK to some degree

  • rate this
    +1

    Comment number 503.

    The Euro was a non staarter from the outset, as it is not possible for different economies to have the same interest rate,, because some will require higher rates to damp down inflation and others will require lower rates to stimulate their economies. The solution which now appears to have been realised is closer fiscal and political integration something similar to that appertaining in the US.

  • rate this
    -1

    Comment number 502.

    We need a return of what was voted for - a common market for goods and capital. Our parliament, our laws, our sovereignty.

  • rate this
    -1

    Comment number 501.

    Cameron must stop speaking nonsense about the euro it failed a long time ago and the UK has handed over more money to this than will ever see back. Not to mention our massive immigration problem we don't have jobs but they still flow past the border like it a benefits party what we are witnessing in Europe right now is a slow motion car crash not one country accept Germany wants or needs the euro

  • Comment number 500.

    All this user's posts have been removed.Why?

  • rate this
    +3

    Comment number 499.

    The Germans are the only people I would trust to run Europe, thier fiscal controls and forward thinkign policy are second to none. Cameron should shut up and learn from them, this goverment clearly has no growth policy, vision or leadership - just a change of plan and policy according to whatever the last £250K donation paid for.

  • rate this
    0

    Comment number 498.

    Tory 2010 manifesto:

    "The Government believes that Britain should play a leading role in an enlarged European Union, but that no further areas of power should be transferred to Brussels without a referendum"

    George Osborne today:

    "He stressed the UK coalition government's commitment to a referendum on Europe in the event of a "significant transfer of power and sovereignty"

    Spot the difference?

  • rate this
    +2

    Comment number 497.

    The Euro is not finished. It will be reinvented and be in all but name the Deutschemark currency area containing the states with reasonable creditworthiness + Germany of course.

    There is no need to worry about the UK joining as the new area will need to be solvent – which we are not. Indeed, our economy is held up by fresh air and QE.

  • rate this
    0

    Comment number 496.

    487. Graham

    I like the idea of such a simple solution but think it has flaws. The Germans want their currency at a low exchange rate to sell their goods. Being in the Euro does this. Also if they revert to the DM inevitably it will strengthen making it even more likely the Euro countries will default because they will have to pay even more back. They would also lose a lot of euro control.

  • rate this
    -1

    Comment number 495.

    Mrs Merkel is barking up completely the wrong tree. For a single currency to work there needs to be a single tax system, debt liability and financial system / budget across all the member countries. In other words the countries would need to give up control of their finances and no country will do this. Further integration wouldbe a disaster. The only solution is an orderly break up of the Euro.

  • rate this
    +3

    Comment number 494.

    Oh do shut up Dave Europe has no interest in anything you have to say just like the people of this country.

  • rate this
    +3

    Comment number 493.

    @480. SCEPTICAL "he will no doubt join the gravy train with Clegg in a couple of years like other failures before him Kinnock et al"
    I heard Neil Kinnock did good work *against* the EU gravy train - and so they don't like him in Brussels. Well done, boyo!
    It's the like of Patten and Mandelson (and Salmond, I suspect) doing the Eurocrats dirty work that we need to stop.

 

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