Cameron: UK taxpayers won

8th June 2012

The Prime Minister said: "I can understand why eurozone countries may want to look at elements of banking union.

"Because we are not in the single currency, we won't take part in the profound elements of that banking union.

"I wouldn't ask British taxpayers to stand behind the Greek or Spanish deposits. It is not our currency, so that would be inappropriate to do.

"I understand why single currency countries have to look at deeper integration. I will make sure that Britain's interests, particularly in the single market and the openness and fairness of the single market are protected. That is key for Britain.

"We want the eurozone to succeed. We want the euro to solve the problems it faces, so that all European economies including ours can get back to healthy growth."

The Prime Minister also urged the German Chancellor Angela Merkel to put German money into a system of eurobonds that would share the burden of debt across the eurozone.

The Chancellor, however, rejected the PM's pleas for more action- and even branded him as being "impatient."

 "It is human to think the euro crisis could be solved in one fell swoop – but I don't think this would work."

She added: "The euro crisis developed over ten years and it is going to take several years before we can repair the system and make it viable again. With everybody getting so impatient around here, it is a good job that I am one of the people who is staying patient."

Furthermore, the Telegraph's Mats Persson says instead of calling for the eurozone to move towards a fiscal union, including eurobonds, Britain should spend all its political capital on convincing Merkel that Europe as a whole needs to move in the direction of free trade and structural reform.

This means that, instead of talking about "digital government" as Cameron and Merkel did yesterday, Cameron should have said the following:

"I will support the Chancellor's vision for a Europe based on responsible spending, sound money, liberal cross-border trade and respect for the rule of law. Like the Chancellor, I believe that Europe must learn how to live within its means and reform itself if it is going to remain a vibrant economic actor on the world stage. But just as Germany will need to seek the right conditions to be comfortable with its new position in Europe, so must Britain. Since we cannot join the euro, Britain will need a different – and more flexible – set of arrangements under EU law than euro members. This is the only way to reconcile continued EU membership with UK public opinion."

Though Stephen Pollard of the Daily Express argues that attempting to save the euro is the opposite of what is required. He says Euro membership itself is the cause of the chaos engulfing Europe.

"Every further attempt at shoring up the euro not only delays the inevitable break-up but does so at vast cost, both in money spent on bailouts and in the impact on the people who are suffering. The sooner Greece, Spain and the others are able to rebalance their economies free of the euro the better for everyone."

 

More on Mindful Money:

The quantitative easing addiction

Financial crisis: Alternative routes to recovery

Buffett & Soros weigh into the eurozone crisis

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