18 Nov 2011

Cameron and Merkel agree to differ

Speaking after talks in Berlin, David Cameron concedes the UK and Germany do not agree on every aspect of European policy, while Angela Merkel stresses that both countries “need each other”.

Both leaders made it clear they had not papered over the cracks on Germany’s wish for treaty change to prevent a repeat of the covereign debt crisis in the eurozone.

On European commission calls for a financial transaction tax, David Cameron said such a tax would be introduced immediately by both countries if it was global – but there had been no agreement in the talks on the imposition of a tax confined to the eurozone.

He warned that if it was confined to Europe, the danger was “driving transactions to jurisdictions where it wouldn’t be applied.”

David Cameron and Angela Merkel - what they said and what they meant.

Chancellor Merkel said: “The United Kingdom and Germany need each other.” She believed that both countries “share a common opinion about how Europe can be successful”.

But on the subject of the European Central Bank’s role in the present eurozone financial crisis, she warned: “One should not pretend to be more powerful than one really is.”

‘Completely unjustified’

Earlier, Mr Cameron met the European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy.

Both figures share Chancellor Merkel’s frustration at what they see as Britain’s adamant stance over how to handle the eurozone.

Business Secretary Vincent Cable said this morning that Germany’s stance on the transaction tax was “completely unjustified.”

Germany and France want the tax levied on all dealings between financial institutions, meaning Britain could be left outside of key decision making in the eurozone.

The German chancellor is seeking limited changes to the European Union treaty to provide stricter fiscal discipline within the 17-nation eurozone, in hopes of preventing another debt crisis like the one currently spreading across the continent.

But Mr Cameron is to push for any such change to be limited to the eurozone nations.