Eurozone crisis: David Cameron calls for decisive steps

Angela Merkel and Nicolas Sarkozy Angela Merkel and Nicolas Sarkozy hammered out a deal at the weekend

Europe's leaders must take "decisive steps" to solve the financial crisis sweeping through the eurozone, David Cameron has said.

The prime minister said it was putting the world economy in a "precarious" situation and eurozone leaders had a "collective responsibility".

The eurozone had to be made to work or its "possible failure" confronted.

Germany's and France's leaders met on Sunday and proposed "important changes".

German chancellor Angela Merkel said details of the Franco-German package would be announced before the G20 summit in Cannes next month but she said France and Germany "are determined to do the necessary to ensure the recapitalisation of Europe's banks".

Meanwhile, France, Belgium and Luxembourg have approved a plan to secure the future of the troubled bank Dexia, following fears it could go bankrupt.

Dexia, which is jointly owned by France and Belgium, has significant exposure to Greek debts.

Mr Cameron told the Financial Times on Monday: "The situation with the world economy is very precarious."

He added: "The eurozone is probably contributing more to that uncertainty and lack of confidence than anything else. You either make the eurozone work properly or you confront its potential failure."

Later, in a statement to the House of Commons, Chancellor George Osborne also urged eurozone leaders to come up with a "comprehensive solution which ring-fences vulnerable eurozone countries, recapitalises Europe's banks and resolves the uncertainty about Greece".

He said the eurozone bailout fund - the European Financial Stability Facility - needed to be increased beyond its current 440bn euros ($600bn; £383bn).

During last week's Conservative Party conference Mr Cameron warned the world economy was at a "moment of danger" and he has been pushing for European leaders to take decisive action.

"We need to push, but in the end it is their currency, it is their issue - they have to take the decisive steps," he told the FT.


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  • rate this

    Comment number 98.

    1. Disband 'rating agencies' forthwith
    2. Tell 'the markets' to wake up and pay attention: if THEY want to see growth and prosperity, THEY have to trade in a manner to make it happen
    3. Require banks to start lending on sensible terms to businesses, set them a target and make them meet it or be penalised.

  • rate this

    Comment number 78.

    It amazes me to see Germany's success at exporting being blamed for the Eurozones problems. Just like China, Japan and Korea, Germany actually makes useful things that businesses and people around the world want to buy. The rest of the eurozone, and US and UK, seems to think it can spend money it has not earned without there being a reckoning one day. That day has come.

  • rate this

    Comment number 27.

    If you want safer banks, less recessions, and no depressions, then start advocating a complete separation of state and economy, ie. Capitalism. Government has no role in the economy whatsoever, and the extent to which it does have, is the extent of the turmoil you are now witnessing. The whole 'financial crisis' was a product of government intervention in the housing and banking markets.

  • rate this

    Comment number 9.

    The Eurozone crisis in not a banking crisis or a Greek crisis primarily, it's one of overstretch in a loose 17 economy monetary union. Why so little attention to the top end, where the German economy, almost as large as all the rest put together, is pulling away, with the benefit of an exchange rate depressed by the PIIGS problems? Germany needs to revalue, not Greece default to save the Euro.

  • rate this

    Comment number 5.

    I never understand why a politician's wafflings make the headlines. Many of us have been calling for the same thing for ages but no one listens, as they won't to Cameron. If it was something serious: a declaration of war, for instance, it might be headline-worthy but just more waffle on the eurozone - no. Is there no better news?


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