Cameron tells Europe to quell the turmoil
MANCHESTER PRIME Minister David Cameron urged Europe’s rulers on Thursday to do more to quell the eurozone debt crisis and raised the prospect of a Greek default to argue he must stick to his unpopular attempt to cut spending and reduce debt at home.
Warning that the survival of the euro was now in question, Cameron showed growing alarm and frustration that the crisis was spinning out of control, threatening Britain’s $2.5 trillion economy and his own electoral prospects in 2015.
“Greece is on the brink, the survival of the euro in question,” Cameron told business leaders on a grey and damp morning in the northern English city of Manchester.
“Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course - but the right course,” he added.
Echoing the words of Bank of England Governor Mervyn King, Cameron said the crisis in the European Union - Britain’s biggest trading partner - had lasted more than two years but the “storm” was far from over.
“We are in unchartered territory which carries huge risks for everybody. As I have consistently said, it is in Britain’s interest for the eurozone to sort out its problems.” He said Europe’s problems showed the dangers of scrapping his government’s attempt to cut Britain’s vast budget deficit, though he called on the European Central Bank to stimulate demand to help peripheral euro members.
“It is becoming increasingly clear that they are less likely to be able to sustain that necessary adjustment economically or politically unless the core of the eurozone, including through the ECB, does more to support demand and share the burden of adjustment,” Cameron said.
He added that the Bank could do more to support the economy if inflation fell below its target, a barbed way of asking Governor King to help boost demand.
After snubbing Francois Hollande when the Socialist candidate came to London weeks before the French election, the Conservative Cameron said he now welcomed the new French president’s idea of launching project bonds to drive demand by funding big infrastructure deals.