Greek delay is dangerous, David Cameron warns

 

Prime Minister David Cameron today urged successful parties in
yesterday's Greek elections to move swiftly to form a government,
warning that delay could be "very dangerous".

His comments came as he arrived in Mexico for a G20 summit of the world's leading economies which will be dominated by the crisis in the eurozone and the fallout from yesterday's polls.

Before leaving London late last night, Mr Cameron held a conference call with the leaders of Germany, France, Italy and Spain as well as the presidents of the European Commission and European Council.

It is understood that the leaders were encouraged by the results of the ballot, which saw the centre-right New Democracy party outpoll the far-left Syriza in an outcome which makes Greek departure from the euro less likely.

But there is now a sense of urgency about New Democracy - which is signed up to the austerity programme demanded in a memorandum setting out the terms of Greece's multibillion-euro bailout - forming a coalition government in Athens.

Mr Cameron said: "The outcome of the Greek election looks clear in terms of a commitment to stay in the eurozone and to accept the terms of the memorandum.

"But I think those parties that want that to happen can't afford to delay and position themselves.

"If you are a Greek political party and want to stay in the eurozone and accept the consequences that follow you have got to get on with it and help form a government. A delay could be very dangerous."

Mr Cameron is expected to use a speech later today to step up pressure on the 17 eurozone countries - and particularly Germany and the European Central Bank - to take decisive action to address the fundamental problems behind the crisis in the single currency.

Europe's leaders must be ready to take tough political decisions or face the threat of either "perpetual stagnation" or a hugely damaging break-up of the single currency, he will warn.

He has brought a 25-strong business delegation with him to Mexico, in a sign that he wants to build up trade links with emerging economies to make up for continuing weak demand from traditional markets for British exports in Europe.

Speaking to a business audience in the Pacific resort town of Los Cabos, the Prime Minister will put the crisis in the euro area at the top of a list of "five big threats to the global economy".

He will urge fellow G20 leaders to take "bold steps" to restore growth, and will warn against "backsliding" on trade protectionism and reforms to financial regulation.

A failure to follow through on pledges made at previous summits to reform the banks would leave the world exposed to a repeat of the 2008 financial crash, he will warn.

No corner of the world is safe from the five threats of the eurozone instability, sovereign debt, low growth, protectionism and failure to regulate the banks, the PM will say.

"These five threats are very real. And let's be clear - in a global economy, they threaten us all."

Speaking to the B20 business summit in Los Cabos, Mr Cameron is expected to renew his call on the eurozone to take the steps towards closer fiscal and financial integration which he believes are necessary to restore stability.

He will call on "core" members like Germany, as well as the ECB, to "do more to support demand and share the burden of adjustment", warning that central banks cannot afford to "stand on the sidelines" in the current crisis.

"The reality is that there are a set of things that eurozone countries need to do," the PM will say. "And it's up to eurozone countries whether they are prepared to make the sacrifices these entail.

"The challenge is one of political will as much as economics. Of course these things are difficult to do, but just because these things are difficult does not mean we should not say them.

"If the eurozone is to stay together then it has to make at least some of these difficult decisions.

"The alternatives to action that creates a more coherent eurozone are either a perpetual stagnation from a eurozone crisis that is never resolved or a break-up caused by a failure to address underlying economic fundamentals that would have financial consequences that would badly damage the world economy, including Britain."

Mr Cameron will say that the UK has a "clear vision" of the "stable, growing, competitive and dynamic" world economy, powered by trade and financed by strong banks, which it wishes to create.

But he will warn of five threats to this vision: instability and contagion in the eurozone; debt and the "muddle-headed" belief that indebted countries can spend their way out of crisis; the failure to deliver the monetary activism and structural reform needed to deliver sustainable growth; 1930s-style protectionist barriers to trade; and the failure to complete long-term banking reforms.

G20 leaders need to show "courage, resolve and political commitment", he will say, adding: "There can be no room for timidity in meeting these threats, no ducking the essential action on fiscal discipline, monetary activism and structural reform and no backsliding on the hard-won gains of previous summits.

"For the G20 to give in to self-defeating protectionism or to water down the tough new commitments on financial regulation would be unforgivable."

Britain is pushing for G20 states including the US, Russia, Indonesia and South Korea to complete the implementation of the Basel III requirements on bank liquidity and leverage agreed following the 2008 crisis.

Mr Cameron will say: "This is no time for caution or defeatism.

"The road ahead will not be easy. But I believe that we understand the steps needed to revitalise the world economy and that together we can take the bold steps necessary.

"The stakes are high, of course - incredibly high. But with courage and determination we can use these G20 and B20 summits to really begin to get to grips with these five great threats to the global economy.

"That is the task that brings us together in Mexico. To secure our prosperity now and for generations to come."

PA

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

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: Sales Manager

£35000 per annum: Recruitment Genius: Due to continuous expansion and growth o...

Recruitment Genius: Automotive Service Advisor - Franchised Main Dealer

£18000 - £25000 per annum: Recruitment Genius: This successful, family owned m...

Ashdown Group: Digital Marketing Executive - West London - £35,000

£28000 - £35000 per annum: Ashdown Group: A luxury fashion retailer based in W...

Ashdown Group: IT Systems Engineer - East Riding of Yorkshire

£30000 - £35000 per annum: Ashdown Group: IT Systems Engineer - East Riding of...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable