David Cameron and Barack Obama urge 'immediate plan' over eurozone crisis

 

Prime Minister David Cameron and US president Barack Obama have agreed on the need for “an immediate plan” to resolve the eurozone crisis, Downing Street said today.

It came in a phone conversation between the two leaders last night, ahead of the crucial G20 summit in Mexico later this month, where world leaders will again attempt to agree a way through the problems.

Chancellor George Osborne also took part in a "stock-taking" conference call with counterparts from the G7.

Meanwhile the Government welcomed new European Commission plans to protect taxpayers and avoid future bank bailouts as a "positive step" towards breaking the "too big to fail" culture of the European banking sector.

The contacts come amid mounting fears over Spain's ability to raise funds on international markets at affordable levels.

Mr Cameron is due to visit Berlin tomorrow, where he is expected to urge German chancellor Angela Merkel to push for tougher fiscal governance in the eurozone.

In last night's phone conversation Mr Cameron and Mr Obama "agreed on the need for an immediate plan to tackle the crisis and to restore market confidence, as well as a longer-term strategy to secure a strong single currency", said Number 10.

The Prime Minister has been making clear for some time that it is for the eurozone countries to take "decisive action" to stand behind their currency, said the spokeswoman.

This should involve building an effective "firewall" to prevent contagion spreading; ensuring banks are well capitalised; creating a system of fiscal burden-sharing; and enacting a supportive monetary policy across the eurozone.

In Brussels today, EU financial services commissioner Michel Barnier announced the latest plan for EU-wide rules to deal with bank failures, which European Commission president Jose Manuel Barroso described as "an essential step towards banking union in the EU".

Under the proposals, European banks would be obliged to draw up recovery plans setting out measures they would take if their financial position weakened.

They would also have to prepare a "resolution plan" with options for dealing with banks "in critical condition which are no longer viable".

Mr Barnier said the plan would help public authorities intervene "decisively" before bank problems arise - and swiftly if they do.

"The financial crisis has cost taxpayers a lot of money," he said.

"Today's proposal is the final measure in fulfilling our G20 commitments for better financial regulation.

"We must equip public authorities so that they can deal adequately with future bank crises - otherwise citizens will be left to pay the bill, while the rescued banks continue as before knowing that they will be bailed out again."

A Downing Street spokeswoman said: "We welcome the announcement today and the proposals. The UK Government's view is it represents a positive step in tackling the problem of 'too big to fail' in the banking sector."

But Liberal Democrat MEP Sharon Bowles said the resolution plan - not likely to come into force for years even after approval by EU governments - is likely to be overtaken by events.

"In both comedy and tragedy, timing is everything," she said.

"The proposal we have today may be useful for the future but it does not solve the current problems we face, and frankly should not be held as such. In the long term, I have no doubt that we will want to build an effective and strong crisis resolution scheme within a pan-European framework."

The short term requires measures to force banks to develop "living wills" and making the European Banking Authority more effective, she said.

"The European Parliament wants to embed such requirements in the capital requirements legislation on the table," said Ms Bowles.

"We cannot wait an extra two and a half years for the crisis management legislation to be negotiated and implemented - its implementation date is January 2015."

The crisis management plan highlights the fact that public authorities are badly equipped to deal with ailing banks.

Governments have so far injected "unprecedented" levels of public money into banks - the European Commission approved 4.5 trillion euros of state aid - 37% of EU GDP - between October 2008 and October 2011.

A commission statement said: "This averted massive banking failure and economic disruption, but has burdened taxpayers with deteriorating public finances and failed to settle the question of how to deal with large cross-border banks in trouble."

Mr Barroso said: "Two weeks ahead of the (G20) summit in Los Cabos, the commission is presenting a proposal which will help protect our taxpayers and economies from the impact of any future bank failure.

"Today's proposal is an essential step towards banking union in the EU and will make the banking sector more responsible. This will contribute to stability and confidence in the EU in the future, as we work to strengthen and further integrate our interdependent economies."

PA

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger is in Argentina having chemotherapy

Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum
theatre

Returning to the stage after 20 years makes actress feel 'nauseous'

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
peopleThe Times of India said actress should treat it as a 'compliment'
News
news

Watch this commuter wage a one-man war against the Circle Line
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
A male driver reverses his Vauxhall Astra from a tow truck
news

Man's attempt to avoid being impounded heavily criticised

Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
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

March On Cancer™ - Local Marketing and Promotions Volunteer

This is an unpaid voluntary role.: Cancer Research UK: We need motivational vo...

SEN Coordinator + Teacher

£1 per day: Randstad Education Leeds: Job Purpose To work closely with the he...

Maths Teacher - Evening session

Negotiable: Randstad Education Birmingham: I am looking for a qualified experi...

Teaching Assistants

£50 - £85 per day: Randstad Education Preston: Rapidly developing and growing ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week