Cameron joins talks on Euro crisis
Sunday 23 October 2011
Prime Minister David Cameron and fellow EU leaders are bidding for more progress today in the latest of a series of meetings to crack the economic crisis.
A summit in Brussels will try to break the deadlock over plans for a massive increase in EU bailout funds to reassure markets that Europe can deal with any more eurozone meltdowns.
And EU leaders want to advance plans for a 50% write-down of Greek debt repayment in another bid to stabilise the single currency and restore calm.
Coupled with yesterday's "real progress" at separate talks on capitalising EU banks, the moves mark a major new effort to restore confidence in the single market.
But the summit is not the last word - another summit is already scheduled for next Wednesday and more meetings of the 17 eurozone countries and all 27 EU financial ministers and leaders are on the cards before the EU delivers its agreed plan for stopping the economic rot.
Strengthening banks to withstands future economic shocks, topping up existing bail-out funds and slashing Greek debt repayments - are now seen as the key elements in a package of measures German chancellor Angela Merkel said last night should be finalised at the Wednesday meetings.
She was speaking before a crunch dinner in Brussels last night with French president Nicolas Sarkozy in a bid to sink their deep differences over how to finance the programme and, crucially, how to ensure the moves do not revive public backlashes in Paris and Berlin.
Also at dinner were the heads of the European Central Bank and International Monetary Fund, plus the presidents of the European Commission and European Council.
Leaving Brussels yesterday after 10 hours of gruelling talks at which finance ministers reached provisional agreement on bank recapitalisation to the tune of 100 billion euros (£87bn), Chancellor George Osborne commented: "Britain will keep up pressure in the next few days for a comprehensive package to resolve the European crisis and to make sure that we get jobs and growth."
Before Mr Cameron arrived today to take up the next stage of a hastily-choreographed series of talks, his spokesman said: "We have got to come up with a resolution. These are difficult problems and we recognise that. We want to see these issues dealt with as quickly as possible and we want to see them dealt with comprehensively.
"Ultimately these are eurozone issues but we are doing what we can to try to help move things forward."
The UK Government backs Germany in targeting Wednesday for firm decisions - although the ultimate deadline is put by some as a G20 summit in Cannes in less than a fortnight, when world leaders gather to discuss the global financial crisis.
However, deal until Cannes -assuming one is possible at all - would fuel market turmoil, as well as being impractical because not all of the 17 eurozone members are part of the shape of a deal, it must be "credible and sustainable".
An immediate stumbling block is banking lobby resistance to bearing the burden of a 50% Greek write-down, something ministers hope will be a voluntary agreement.
And Chancellor Merkel and President Sarkozy know they face a domestic backlash if they expand a current 440 billion euro (£383bn) bail-out fund to a figure about two trillion euros (£1.74 trillion).
It is a figure number-crunchers believe the markets will see as a sign of determination to get on top of the crisis.
But it exposes taxpayers, especially in Germany and France, to potentially huge extra liabilities via their national budgets.
It is a worry that Mr Cameron does not have as, from a safe haven beyond the eurozone, he urges fellow leaders today to do what needs to be done and do it quickly.
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