REUTERS

MANCHESTER EUROPE must urgently fix its banks and deal with its debts, British Prime Minister David Cameron said on Sunday, warning that the eurozone crisis risked harming Britain’s economy and stunting global growth.

Speaking on the opening day of his Conservative Party’s annual conference, Cameron said that he would stick to his coalition’s deficit-cutting plans despite signs that the British economy is stalling.

He also said Britain must remain part of the European Union, disappointing rightwingers in his party who see the continental crisis as a chance for an abrupt end to four decades of closer integration with EU partners.

Any prolonged economic crisis in the rest of Europe, the UK’s main export market, would hurt Britain when the government is trying to rebalance a struggling economy by increasing the sale of British goods and services overseas.

“The eurozone is a threat not just to itself but also a threat to the British economy and a threat to the worldwide economy,” Cameron told BBC television.

“Action needs to be taken in the next coming weeks to strengthen Europe’s banks, to build the defences that the eurozone has, to deal with the problems of debt. They’ve got to do that now. They’ve got to get ahead of the markets now.” The Conservative-Liberal Democrat coalition government, in power since May 2010, is increasingly concerned about a lack of growth in the British economy, with critics saying its tough austerity plan is only making matters worse.

Thousands of flag-waving, whistle-blowing union members marched past the conference venue in the northern English city of Manchester to protest over deep cuts in public spending that will lead to over 300,000 job losses.

The coalition argues that dealing with Britain’s debts decisively is the only way to restore long-term growth and stability, and to also keep financial markets at bay.

“You can’t suddenly tear up your borrowing plans and your debt plans because it is those plans that give us the low interest rates that are absolutely key to economic recovery,” Cameron said.

Cameron said everything must be done to “fire up the engines of the British economy”.

He unveiled plans to make state-owned land available in a “build now, pay later” scheme for property developers which he said could mean 100,000 homes were built and 200,000 jobs created.

Britain’s economic destiny will dominate much of the Conservative Party’s annual gathering after a leading parliamentarian criticised finance minister George Osborne for lacking a coherent growth strategy.