Cameron pushing Merkel for euro action

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David Cameron has only limited influence over Angela Merkel
David Cameron has only limited influence over Angela Merkel

David Cameron is pressuring Angela Merkel over Germany's resistance to eurobonds, after making clear he is not putting all the responsibility for fixing the eurozone crisis "on one eurozone leader".

The prime minister's comments came after George Osborne said he believed there was a "remorseless logic" in favour of a banking union and further fiscal union on the continent.

Britain is seeking to prevent the ongoing eurozone crisis spiralling out of control but has limited influence.

"All countries across Europe can help by offering the right advice and the right steps forward to the eurozone countries," Mr Cameron said before the meeting with Ms Merkel.


"The first priority is to stabilise the financial situation. That means the recapitalisation of banks, it means the building of firewalls, it means the reassuring of markets."

He said structural reforms and "proper and credible plans for deficit reduction" were also needed "to show the world we can pay our way".

With Spain having warned it is struggling to prop up its failing banks and could need a bailout within weeks – what would be the fourth in two years – the UK is seeking to influence proceedings in tandem with the US, after Mr Cameron spoke with president Barack Obama on Tuesday night.

The prime minister is meeting with Ms Merkel this afternoon to present the German chancellor with an ultimatum from Britain and the US that action to shore up the eurozone is urgently needed.

"The prime minister's view has always been that decisive action needs to be taken in order to underpin the eurozone," a Downing Street spokesperson said.

"Confidence in the markets is essential, and in order to regain that confidence decisive action needs to be taken."

Germany is a key player in the negotiations, having insisted that struggling eurozone countries fulfil their obligations with as little assistance as possible.

But speaking in Norway before heading to Germany, Mr Cameron signalled that he did not believe the future of Europe rested on Ms Merkel's shoulders alone.

"I don't think we should single out one eurozone leader and put all the responsibility on them," he told reporters.

"There is a whole series of steps that need to be taken."

Progress is unlikely to be made after today's talks, which are overshadowed by the Greek general election on June 17th.

The poll is being viewed as a referendum on whether Greek voters accept the harsh austerity measures judged necessary to restore the country's finances.

Key decisions could be taken at the EU's annual summer summit at the end of the month or at the looming G20 summit in Mexico.

Meanwhile Mr Osborne has called for a "greater harmonisation of fiscal policies" in the eurozone.

He suggested that a form of banking union should be considered among eurozone countries but made clear that the UK would not play a part of it.

"There is no way that Britain is going to be part of any eurozone banking union," Mr Osborne told the Today programme.

"I think Britain will require certain safeguards if there is a full blown banking union."

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