UK Politics

Greek crisis: Cameron says eurozone 'will not fail'

People demonstrating against austerity measures in Athens
Image caption Mr Cameron said he wished Greece well but the UK would not contribute to any further bailout

The eurozone will not be allowed to collapse, David Cameron has said, since the countries using the single currency have so much "invested in it".

The prime minister said that for its 17 members, the eurozone was a "key part" of their national identities and they "will not let it fail".

It comes after former foreign secretary Jack Straw said the euro "cannot last" amid the Greek debt crisis.

The PM restated the UK would not take part directly in any Greek rescue.

As it is not a member of the single currency, the UK would not have to contribute to any further EU-wide bailout.

However, as a member of the International Monetary Fund it could be liable for a share of loan guarantees to Greece - and UK banks have an estimated £2.4bn in investments tied up there.

National interest

Members of the single currency have said Greece must agree further austerity measures before receiving a further £10bn, raising the prospect of the country defaulting on its debts should it be unable to do this.

A growing number of UK politicians have said this is the best way to resolve Greece's long-term economic difficulties and the country should be allowed to leave the eurozone.

Former Labour Foreign Secretary Jack Straw has gone further, saying the euro was facing a "slow death" and the UK should accept that monetary union as a project could not survive in its current form.

But asked about the eurozone's future on Tuesday, Mr Cameron said he expected it to survive its current crisis.

"The countries that joined the euro have an enormous amount invested in it and do not want it to, and will not let it, fail," he said at a press conference in No 10.

"They see it as an absolute key part of their national interest and identities and I would not doubt their resolve in any way."

'Bad for Britain'

The Greek government wants a similar rescue deal to the £68bn ($110bn) bailout it received last year.

However, eurozone finance ministers are awaiting the outcome of a series of votes in the Greek Parliament - the first of which is on Tuesday - before deciding whether to hand over the latest tranche of money.

Turbulence in the eurozone was not good for the UK, Mr Cameron stressed, since 40% of UK export trade was with countries using the single currency.

"Britain struggles when the eurozone struggles," he added.

"The consequences of severe turbulence (in the eurozone) could be bad for Britain."

The prime minister, who said he had always been "passionately opposed" to the UK joining the single currency, said he wished Greece well in its difficulties but the UK would not be participating in any financial rescue.

"The point about Greece that the chancellor and I have both made is we were not involved in the first bailout of Greece. It would be quite wrong now to bring Britain into this bailout."