Cameron: EU financial tax would be madness

PM urges fellow leaders to take 'bold and decisive action' to solve the eurozone's debt crisis

Davos

David Cameron delivered a blistering message to European leaders, urging them to take bold action to sort out the eurozone debt crisis, and describing their proposals for a financial transaction tax as "madness".

In a message aimed squarely at the German Chancellor, Angela Merkel, Mr Cameron warned: "Tinkering here and there and hoping we will drift to a solution simply won't cut it any more. This is a time for boldness not caution."

The Prime Minister, speaking at the World Economic Forum in Davos, conceded there were some signs of stabilisation of European bond markets since the European Central Bank injected almost half a trillion euro into the Continent's banking system last month. But he said uncertainty about the future of the single currency was undermining the global economy.

"We need to be honest about the overall situation," he told an audience of politicians, business leaders and academics in the Swiss ski resort. "The crisis is still weighing down on business confidence and investment."

Mr Cameron pointed out that the borrowing costs of nations on the periphery of Europe were still dangerously high. "A year ago, bond rates were 5 per cent in Spain, nearly 5 per cent in Italy and more than 7 per cent in Portugal. Today, they are still 5 per cent in Spain, up to 6 per cent in Italy and 14 per cent in Portugal. So we still need some urgent short-term measures."

The Prime Minister, pictured, identified these measures as a speedy conclusion to the Greek debt restructuring talks, the rapid recapitalisation of vulnerable European banks and an increase in the size of the EU's bailout funds. "The uncertainty in Greece must be brought to an end, Europe's banks recapitalised ... [and] the European firewall needs to be big enough to deal with the full scale of the crisis," he said. He also vehemently criticised the European Commission for undermining Europe's economic competitiveness and called for an entirely new approach to single market legislation.

"Here's the checklist: all proposed EU measures tested for their impact on growth; a target to reduce the overall burden of EU regulation; a new proportionality test to prevent needless barriers to trade in services and slash the number of regulated professions in Europe," he said.

Mr Cameron contrasted European leaders' slow movement through the eurozone crisis with his government's radical deficit-reduction plan, which was outlined in George Osborne's emergency Budget in June 2010.

"By taking bold decisions to get to grips with the debt, Britain has shown it is possible to earn credibility and get ahead of the markets," he said.

Mr Cameron's rejection of the EU's proposed financial transaction tax, advocated by Chancellor Merkel and the French President, Nicolas Sarkozy, was his strongest yet. The Prime Minister said the European Commission's own analysis showed that such a levy would cost 500,000 jobs across Europe.

"Even to be considering this at a time when we are struggling to get our economies growing is quite simply madness," he argued.

Despite his stark warning about the eurozone, Mr Cameron did attempt to rebuild some bridges with Britain's European partners after he used the UK's veto in Brussels last month to block a new EU Treaty.He insisted that he saw Britain as a constructive and committed player in the bloc.

"Let me be clear. To those who think that not signing the treaty means Britain is somehow walking away from Europe let me tell you, nothing could be further from the truth," he said. "Britain is part of the European Union. Not by default but by choice."

Mr Cameron will meet other European leaders, including Ms Merkel, on Monday.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
ebooksNow available in paperback
Life and Style
tech
News
The 67P/CG comet as seen from the Philae lander
scienceThe most important scientific breakthroughs of 2014
Arts and Entertainment
Ian McKellen as Gandalf in The Hobbit: The Battle Of The Five Armies
film
Arts and Entertainment
Sarah Koenig, creator of popular podcast Serial, which is to be broadcast by the BBC
tvReview: The secret to the programme's success is that it allows its audience to play detective
News
Ruby Wax has previously written about her mental health problems in her book Sane New World
people
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 Executives - OTE £60,000

£25000 - £60000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Care Workers Required - The London Borough of Bromley

£15000 per annum: Recruitment Genius: This homecare agency is based in Beckenh...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas