David Cameron warns future of euro in jeopardy

‘Some countries have seen decades of lost growth. Those countries have a single currency but they don't have a single fiscal system, a fiscal tax system. It creates bigger differences’

The former Prime Minister also suggested that populism had cost him his job (AP)

David Cameron has warned the future of the euro is uncertain during a speech in the United States.

The former Prime Minister was speaking to students at DePauw University in Indiana when he said he sees “more trouble ahead” for the currency and that it is “not working as intended”.

In a warning that further turmoil could hit Europe, Mr Cameron said he believed the euro was on the brink of collapse.

“Some countries have seen decades of lost growth. Those countries have a single currency but they don't have a single fiscal system, a fiscal tax system. It creates bigger differences,” Mr Cameron said.

“You in the United States have ways to make sure that if you have a bad year you pay less in taxes and offset federal programmes. There are no such arrangements in Europe.”

Mr Cameron also suggested that “populism” cost him his job as Prime Minister but also defended the decision to call the referendum.

“So far these three events – the Brexit referendum, the election of President Trump, the referendum in Italy – I’m sure people are going to write about this movement of unhappiness and concern about the state of the world,” Mr Cameron said.

"I think you could see that in the British vote ... was a mixture of economics and cultural arguments. I think your situation (in the US) was quite similar. I think in Italy it’s more connected with the euro.”

The former Prime Minister sent a stark warning to world leaders and said 2016 could be seen as a “real watershed”, unless action is taken.

“But ultimately, how 2016 goes down in history will depend on what political leaders do next. That's why I have tried to make a very clear argument which is that if they put their heads in the sand and say, 'well this will pass and we just carry on the way we are', then 2016 will be seen as a real watershed,” he added.

“But if, as I believe will happen, that our democracies are flexible enough and our leaders are aware enough, they will correct – course correct as I put it – the problems that they face.

“So you will see a greater emphasis on trying to help those who are left behind.”

He highlighted the need for policies such as tax cuts for low-income workers and a higher minimum wage to help address concerns people have.

“I think if that response is right, 2016 will be seen as a moment of course correction rather than a moment of fundamental change. But if leaders don't take that approach - perhaps particularly in Europe – then it could go down as something quite different,” Mr Cameron said.