David Cameron defends 'make up or break up' euro warning

 

PM: "The eurozone... either has to make up, or it is looking at a potential break-up."

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David Cameron has said there will be no retreat on deficit reduction - and that he was right to speculate publicly about the break up of the euro.

He told business leaders in Manchester that it was "more dangerous to stay silent than to speak out".

The prime minister later discussed the crisis with other European leaders including Angela Merkel and new French President Francois Hollande.

Labour says the recession is caused by coalition policies not the euro crisis.

Mr Cameron raised eyebrows at Prime Minister's Questions on Wednesday when he warned the eurozone it "either has to make up or it is looking at a potential break-up".

Chancellor George Osborne has repeatedly warned against speculating about eurozone break-up, saying it would cause instability amid Greece's ongoing inability to form a government able to push through austerity plans.

'Genie out'

But he told MPs earlier on Thursday that the Greek elections had "let the genie out of the bottle" and "some of the things we were happy to say in private we are now also willing to say in public because the issue is out there".

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The coalition believed that it was winning the argument on deficit reduction, but fears it is in danger of losing the argument on growth.”

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"We have very clear ideas about what the eurozone needs to do to make their currency work," he added, saying he backed austerity measures in "peripheral" countries but also wanted to see the "core of the eurozone" do more "to support demand".

Mr Cameron discussed the eurozone situation with Mr Hollande, Mrs Merkel, Italian Prime Minister Mario Monti and EU officials in a conference call ahead of the forthcoming G8 summit in the United States.

The BBC's political editor Nick Robinson said the prime minister had reiterated the importance of decisive action to sort out the eurozone and to prevent contagion and repeated the key points of his speech.

But he said No 10 had refused to say whether Mr Cameron used the phrase "make up or break up" during the 45-minute conversation.

'Contingency planning'

Downing Street has disclosed that the National Security Council has been involved in contingency planning in case of a worsening situation in Greece and the eurozone.

A spokeswoman said the Treasury had been drawing up contingency plans "for some time" but when asked whether there'd been any planning to deal with "civil strife" she said: "Certainly the national security council has, in the past, looked at issues regarding the eurozone."

In his speech in Manchester, Mr Cameron said it was "essential to speak out about what needs to be done to safeguard the eurozone, to safeguard Britain, to take the steps to make sure we deliver the strong and stable economic growth that we want".

Describing the situation in Greece as a "crisis that never really went away", he said the eurozone could find itself in "unchartered territory" unless it took steps to strengthen its banks and protect its weaker members.

"As I have consistently said it is in Britain's interest for the eurozone to sort out its problems," he said.

"But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system."

'Bystander'

He defended the coalition's austerity measures, saying the programme of spending cuts, tax rises and pay freezes was already having the desired effect of reducing the deficit.

"Let me be clear, we are moving in the right direction - not rushing the task but judging it carefully. And that is why we must resist dangerous voices calling on us to retreat.

Earlier, Business Secretary Vince Cable said Britain "shouldn't be panicking or be unduly negative" about the crisis in the eurozone.

"We need to get the risks in perspective," he told BBC Breakfast, adding there was no reason the crisis should spread beyond Greece.

But Labour said the UK government had become a "bystander" to events in Europe.

"David Cameron isn't part of the solution, he is part of the problem," opposition leader Ed Miliband said. "He promised Britain there would be recovery and he has delivered a recession.

"All of Europe's leaders, including David Cameron, bear responsibility for the fact that over the last two years they haven't sorted out the problems of the eurozone and they haven't had a proper plan for growth and jobs."

 

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  • rate this
    +15

    Comment number 974.

    the only way to save the euro is to distribute the wealth and opportunity for growth. Germany and France have taken all the oppotunities Greece etc were left with tourism that would be decimated by the single currency. much the same as we talk about the North/South divide, they must make the choice to either support Greece with their wealth or create a manufacturing base for them to build on

  • rate this
    +93

    Comment number 567.

    What beggars belief is that the Germans expect us to support Greece in the event that she leaves the Euro! We have already contributed to the European bail out funds and the IMF; the Euro is not our business; if things start to go belly up, it is for the Eurozone to clean it up, not us. They need to realise that we are not there to be milked whenever their project runs into difficulties

  • rate this
    +19

    Comment number 546.

    Frankly, this situation is out of DCs hands. Greece is still a sovereign nation and can shoose to leave the euro if it decides. The banking system is global so if there is a domino effect we can't do much about it. We can't just blame everybody else either, British banks are as much to blame. DC can't just blame Labour either - he's been at the helm for over 2 years and things have got worse

  • rate this
    +41

    Comment number 507.

    Do i have faith that Cameron can shield us from the mess that the Euro fanatics have caused. No! and do i have faith that if Milliband was elected today that he would be able to do so, No!. The truth is when two thirds of the UK public don't even bother to cast votes just shows you the lack of faith we have in this sorry bunch of self serving idiots. Milliband and Cameron cut from the same cloth.

  • rate this
    +111

    Comment number 234.

    The Labour government and the current one both have responsibility for the mess that we will be in if the Euro fails.

    Rather than shouting at each other, all of the parties need to work together to save this country, which will be very badly hit if part of all of the euro currency fails.

    This is going to be very messy indeed and the country needs sensible support, not political point scoring.

 

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