Eurozone Crisis:

Europe must prevent contagion, says David Cameron

 

David Cameron has called for tough action to prevent Greek debt
turmoil spreading as City analysts warned that today's £110 billion
bailout does not spell the end of the "crisis marathon".

The Prime Minister said Europe must focus on creating a firewall capable of preventing contagion within the eurozone after a second massive rescue package for the debt-laden country was finally delivered.

European ministers cautiously welcomed the deal but it has been dismissed by some experts as undeliverable.

At a press conference in Downing Street Mr Cameron said: "Greece has made its choice and we now have to focus on the next step, which is constructing a firewall which is large enough to prevent contagion within the eurozone."

Eurozone governments approved the the rescue package for the ailing nation following more than 12 hours of talks in Brussels.

But the deal is based on long-range forecasts of Greek's best-case scenario for slashing its debts over the next eight years and forthcoming elections in the country will make it politically difficult to keep on track.

Chancellor George Osborne insisted the bailout was good for Britain and would "hopefully" allow Europe to "move on".

He said: "Of course, resolving the Greek situation is only part of resolving the eurozone crisis, but I think we took a really significant step towards that last night and that is good for Britain, because resolving the eurozone crisis would be the biggest boost that Britain could get for its economy this year."

The Chancellor described the package as the "crucial missing ingredient" in securing a sustainable debt position for Greece.

"The other significant point about last night's deal was that the rest of the eurozone signalled a willingness to stand behind their currency and stand behind Greece and frankly, all along, the failure to deal with the Greek situation has caused uncertainty," he added.

City analysts were less enthusiastic about the long-term prospects of the bailout.

Carsten Brzeski, analyst at ING Bank, said: "It looks like a deal, it walks like a deal, it is almost a deal. Last night's eurogroup meeting has paved the way for a second Greek bailout but the crisis marathon is not over."

Michael Hewson, senior market analyst at trader CMC Markets, said the "can has just been kicked a little further".

He added: "Churchill said, 'Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning'. Greece has still got some way to go."

In return for the latest 130 billion euro (£110 billion) bailout and a private creditor debt write-off worth about another 100 billion euro (£84 billion), the Greek government has pledged to implement fully a severe austerity package of pay, pension and jobs cuts, as well as finding savings of 325 million euro (£270 million) in this year's national budget.

It follows the 110 billion euro (£91 billion) bailout from the EU and IMF in 2010, which failed to lift the nation out of crisis.

Asked whether the UK would be liable for a share of the new package through its contributions to the IMF, Mr Cameron's official spokesman said: "We have not agreed to anything.

"This was a eurozone agreement and there is no proposal on the table for additional IMF support."

European Commission president Jose Manuel Barroso said the bailout "closes the door on the scenario of an uncontrolled default".

He added: "There is no alternative to fiscal consolidation and to structural reform in Greece if Greece wants to regain competitiveness so that it can once again generate growth and jobs.

"I think this message has to be clear and the best way of showing our solidarity with Greece is to speak the truth."

At bilateral talks Mr Cameron and Spanish counterpart Mariano Rajoy united to push for action on growth in the European Union.

Both leaders were among the signatories on a letter from 12 members states calling for "bold decisions" at next week's summit to rebuild confidence among citizens and businesses.

The PM said a "very strong collection" of countries was backing the letter but indicated he was keen for eurozone powerhouses France and Germany to throw their weight behind the plans.

"It's obviously completely open to the French and the Germans to support this letter," he said.

"Obviously the more people that support it, the more we will be able to drive that agenda through at the European Council."

PA

News
Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’
news

New UK station Russia Today gives a very bizarre view of Britain

News
people
Voices
Left: An illustration of the original Jim Crowe, played by TD Rice Right: A Couple dressed as Ray and Janay Rice
voices

By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen

Arts and Entertainment
Keira Knightley and Benedict Cumberbatch at the premiere of The Imitation Game at the BFI London Film Festival
filmsKeira Knightley tried to miss The Imitation Game premiere to watch Bake Off
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Life and Style
fashion
Arts and Entertainment
Hand out press photograph/film still from the movie Mad Max Fury Road (Downloaded from the Warner Bro's media site/Jasin Boland/© 2014 Warner Bros. Entertainment Inc.)
films'You have to try everything and it’s all a process of elimination, but ultimately you find your path'
Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site this morning

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

News
i100
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

Humanities Teacher - Greater Manchester

£22800 - £33600 per annum: Randstad Education Manchester Secondary: The JobAt ...

Design Technology Teacher

£22800 - £33600 per annum: Randstad Education Manchester Secondary: Calling al...

Foundation Teacher

£100 - £125 per day: Randstad Education Chelmsford: EYFS Teachers - East Essex...

English Teacher- Manchester

£19200 - £33600 per annum: Randstad Education Manchester Secondary: Are you a ...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes