David Cameron tells Angela Merkel: act to save stricken economies now

 

David Cameron will warn Angela Merkel today that the eurozone's future is in grave peril unless she orders action within weeks to rescue struggling economies such as Greece and Spain.

The Prime Minister, who flies to Berlin today, will tell the German Chancellor of fears in Britain and the United States that delays in tackling the crisis could prove fatal to the currency's chances of survival.

He is backing French calls for eurobonds to be issued to allow Mediterranean countries to borrow at reduced rates. But the suggestion has run into strong resistance in Germany, among both politicians and the public.

Downing Street said yesterday that Mr Cameron and President Barack Obama, who spoke to each other on Tuesday, had agreed on the need for an "immediate plan" to deal with the eurozone's chronic problems. Mr Cameron's move is designed to increase pressure on Ms Merkel to agree immediate action at next week's G20 summit in Mexico ahead of a meeting of EU leaders in Brussels later this month. He runs the risk of irritating Berlin by appearing to lecture Germany over the future of a currency of which Britain is not a member.

But Mr Cameron's aides say he cannot avoid speaking out as the survival, and stabilisation, of the euro is essential for helping the economy to start growing again. Last month, the Prime Minister argued there was a "remorseless logic" to the eurozone's wealthier members helping those that were in trouble.

A Downing Street spokeswoman said yesterday: "The Prime Minister's view has always been that decisive action needs to be taken in order to underpin the eurozone. Confidence in the markets is essential, and in order to regain that confidence decisive action needs to be taken."

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