David Cameron urges Greek parties to form coalition quickly

David Cameron: ''Delay is always dangerous in these situations''

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David Cameron has warned that any delay in forming a government in Greece "could be very dangerous".

Coalition talks are under way, after a centre-right party campaigning for the country to remain in the euro won the most votes in the general election.

The UK prime minister, who is at the G20 summit of major economies in Mexico, said voters' verdict was clear.

He said European economies faced "perpetual stagnation" unless the euro crisis was addressed.

The re-run Greek election at the weekend came after politicians had been unable to form a coalition following May's contest, amid disagreements over whether to accept austerity measures.

The result of the latest deliberations could decide whether Greece, with its huge debts, leaves the eurozone, potentially increasing instability at a time when several European economies, including the UK's, are in recession.

The alternative would be to accept austerity measures in return for a bailout and remaining within the single currency. This is the policy favoured by the centre-right New Democracy party, which has won the most votes.

Mr Cameron told the BBC: "The danger is that the Greek people have made their decision to stay in the euro and [this is ignored]. The parties which believe it need to get together and deliver."

He added: "It's in all out interests that the issue is resolved."

'Sacrifices'

In a speech in the resort of Los Cabos, Mr Cameron warned that the world faces five major economic threats: eurozone instability, sovereign debt, low growth, protectionism and failure to regulate the banks.

He said "core" euro members like Germany, as well as the European Central Bank, have to "do more to support demand and share the burden of adjustment", warning that central banks could not afford to "stand on the sidelines".

Mr Cameron said: "The reality is that there are a set of things that eurozone countries need to do. And it's up to eurozone countries whether they are prepared to make the sacrifices these entail.

"The challenge is one of political will as much as economics. Of course these things are difficult to do, but just because these things are difficult does not mean we should not say them.

"If the eurozone is to stay together then it has to make at least some of these difficult decisions. The alternatives to action that creates a more coherent eurozone are either a perpetual stagnation from a eurozone crisis that is never resolved or a break-up caused by a failure to address underlying economic fundamentals that would have financial consequences that would badly damage the world economy, including Britain."

Mr Cameron said the UK has a "clear vision" of the "stable, growing, competitive and dynamic" world economy, powered by trade and financed by strong banks.

'Unforgivable'

He warned that G20 leaders needed to show "courage, resolve and political commitment", adding: "There can be no room for timidity in meeting these threats, no ducking the essential action on fiscal discipline, monetary activism and structural reform and no backsliding on the hard-won gains of previous summits.

"For the G20 to give in to self-defeating protectionism or to water down the tough new commitments on financial regulation would be unforgivable."

Britain is pushing for G20 members including the US, Russia, Indonesia and South Korea to complete the implementation of the Basel III requirements on bank liquidity and leverage agreed following the 2008 crisis.

Mr Cameron said: "This is no time for caution or defeatism. The road ahead will not be easy. But I believe that we understand the steps needed to revitalise the world economy and that together we can take the bold steps necessary.

"The stakes are high, of course - incredibly high. But with courage and determination we can use these G20 and B20 summits to really begin to get to grips with these five great threats to the global economy.

"That is the task that brings us together in Mexico. To secure our prosperity now and for generations to come."

Labour leader Ed Miliband said: "I think there is a real danger that after the Greek election results there is a sense of complacency. There is a sense that the international community can breathe a sigh of relief."

He added: "I am afraid what we hear from our prime minister today is simply more of the same. If I was the prime minister, I would be going to the G20 meeting of world leaders and saying there has got to be a decisive change of course towards jobs and growth."

Mr Cameron is attending the summit with Chancellor George Osborne and a delegation from 25 leading UK companies, including Diageo, Rolls-Royce and Virgin Atlantic.

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