David Cameron set for Eurozone summit
Wednesday 26 October 2011
Prime Minister David Cameron has arrived in Brussels for another summit after risking the wrath of French President Nicolas Sarkozy with a new call to eurozone leaders to solve the crisis once and for all.
The pair clashed at last weekend's summit when Mr Sarkozy told Mr Cameron he was sick of Britain telling the others what to do about the problem while refusing to join the single currency project.
Today in the Commons before leaving for Brussels, Mr Cameron called once again for "decisive" action on Greece, a "proper recapitalisation" of the banks and a "firewall" to prevent contagion spreading.
He won the argument to attend the latest emergency meeting - but only for a brief gathering of the 27 leaders, after which the 17 eurozone heads will show the others out and settle in for what could be marathon talks to finalise economic rescue plans.
At that point Mr Cameron is planning talks with leaders of other key non-eurozone member states, including Poland, Sweden, Denmark and the Czech Republic.
Then he will fly on to Australia for a long-scheduled visit, having already cancelled the Japanese and New Zealand legs of his tour to attend the EU meeting.
At a noisy session of Prime Minister's Questions, Mr Cameron insisted: "What is absolutely necessary this evening is to deal with the key elements of the eurozone crisis, which is acting as a drag anchor on recoveries in many other countries including our own."
But Labour leader Ed Miliband said Monday's Tory rebellion over an EU referendum had undermined Mr Cameron's influence at this evening's summit.
"We have a Prime Minister who has spent the last week pleading with his backbenchers, not leading for Britain," said Mr Miliband.
Downing Street said Mr Cameron had been determined to be in Brussels to "feed in" Britain's views.
But the real focus was on the powerhouse couple of German Chancellor Angela Merkel and President Sarkozy, leading efforts to resolve their deep personal differences and steer the 17 eurozone members towards a deal which contains big enough figures to impress jittery markets that the EU is getting to grips with the problem of containing the Greek debt crisis and putting in place enough safeguards to cope with any future economic shocks.
Today was described last weekend as the day for final decisions - but even before the latest negotiating got under way officials in Brussels were dampening down expectations, insisting the talks were part of an ongoing process to resolve the crisis with a lasting set of measures.
Downing Street talking of a G20 summit in Cannes in early November as the real deadline, with more EU-level ministerial meetings on the cards in the next few days.
Ahead of the eurozone summit, the German parliament voted in favour of strengthening the EU's bailout fund - a boost for Mrs Merkel and a lift for talks which seem to remain divided on crucial details of a three-point plan to crack the crisis.
A provisional agreement is already in place on the recapitalisation of Europe's most exposed banks - none in the UK - to the tune of about 100 billion euro (£87 billion). Many financial experts say at least half as much again will be needed to convince markets that they are well insulated against further economic shocks.
On the second plank, disputes over efforts to leverage an existing 440 billion euro (£383 billion) bailout fund to boost its lending capacity above one trillion euro (£869 billion) may have receded thanks to the German parliament vote, although a figure has not been finalised. If it is agreed it should demonstrate determination to respond to any more Greek-style meltdowns.
And a decision is still awaited on a demand that private investors - mainly banks - absorb at least a 50% write-off of their loans to Greece. A consortium of global banks has so far suggested 40%, but that has been rejected.
Meanwhile, the spectre of a debt-laden Italy was hanging over the talks, with Prime Minister Silvio Berlusconi facing demands to act on austerity measures in return for financial aid.
The fear is that a Greek-style crisis in Italy will be totally unaffordable for Europe, and make the scale of financial support for Athens look like pocket money.
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