David Cameron calls for G20 euro urgency

 

Prime Minister David Cameron called today for tomorrow's G20 summit to show a sense of "urgency" over the implementation of measures to resolve instability in the eurozone.

The gathering in the French Riviera resort of Cannes is set to be dominated by the chaos unleashed by Greek prime minister George Papandreou's announcement on Monday of a referendum on the eurozone rescue package for his country's ailing economy.

Mr Papandreou, who is coming under intense pressure to reverse his decision, is facing crisis talks this evening with French president Nicolas Sarkozy and German chancellor Angela Merkel in Cannes.

Global markets were panicked into steep falls yesterday by his shock announcement, which threw into doubt the package agreed at an emergency meeting of the 17 eurozone states only last week.

Greek sources said today the national poll - approved by Mr Papandreou's Cabinet last night - could be held as early as next month. But the Greek prime minister must first survive a no-confidence motion in the Athens parliament on Friday as well as calls from some of his own party for him to quit.

European leaders had been hoping for a period of calm in which to finalise the details of last week's deal, which envisages banks taking a 50% "haircut" on Greek debts while the eurozone bailout fund is boosted to one trillion euro (£870 billion).

They now face weeks of uncertainty and potential market instability until it becomes clear whether the Greek electorate will back the plan - or indeed whether Greece can remain a member of the euro.

Their frustration at events in Athens was reflected by German finance minister Wolfgang Schaueble, who said: "It would be helpful if clarity is achieved as soon as possible on which path Greece wants to take."

It is still not clear how the third element of the rescue package - a firewall fund to prevent contagion in future crises - will operate, with suggestions that the eurozone could set up an IMF-administered special purpose vehicle, funded in part by cash-rich trade-surplus countries such as China.

Mr Sarkozy will argue the case for Beijing to supply funds at an eve-of-summit dinner with Chinese president Hu Jintao this evening, though his negotiating position has been undermined by Mr Papandreou's surprise announcement.

Mr Cameron, who arrives in Cannes tomorrow morning, has made clear that Britain will not contribute to any eurozone bailout fund for Greece or any IMF package specifically designed to shore up the single currency area.

At Prime Minister's Questions in the House of Commons today, former chancellor Alistair Darling urged Mr Cameron to use the G20 gathering to persuade the leaders of the world's biggest economies of the need for urgency in filling in the detail in the eurozone plan.

"It is not at all clear how on earth Greece is going to get out of its deficit even if the referendum passes," said Mr Darling, who was chancellor when the G20 met in London in 2009 to agree a global rescue deal in the wake of the financial crisis.

"European banks will need shoring up well before next summer and as for the new rescue fund, which may be needed sooner than we think, it doesn't actually exist.

"Will you not accept that G20 now needs to show the same urgency and sense of purpose that it showed two years ago when it met in London, otherwise instead of being ahead of events, governments are going to be condemned to be dragged along in their wake."

Mr Cameron told MPs that Mr Darling was "right about the urgency of the G20 meeting and the necessity of its agenda".

And he added: "I think some progress was made at the European Council meeting a week ago when, for the first time, they did accept a proper write-down of Greece's debt, which has to be part of the solution.

"We need also a proper recapitalisation of Europe's banks, done to a credible test rather than the incredible tests that were there in months gone by, and the final element - which needs to have more detail added and more substance added - to make sure there is a proper firewall to stop contagion in the eurozone.

"It has become even more urgent to put meat on the bones of this plan to show that we're removing one of the key obstacles to global growth, which is the failure to agree a proper plan to deal with problems in the eurozone."

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Account Manager

£20000 - £35000 per annum: Recruitment Genius: This full service social media ...

Recruitment Genius: Data Analyst - Online Marketing

£24000 - £35000 per annum: Recruitment Genius: We are 'Changemakers in retail'...

Austen Lloyd: Senior Residential Conveyancer

Very Competitive: Austen Lloyd: Senior Conveyancer - South West We are see...

Austen Lloyd: Residential / Commercial Property Solicitor

Excellent Salary: Austen Lloyd: DORSET MARKET TOWN - SENIOR PROPERTY SOLICITOR...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there