David Cameron has said the ongoing sovereign debt crisis is having a “chilling effect” on the UK economy and must be resolved.
David Cameron has said the eurozone crisis must be resolved to help Britain recover from the economic downturn.
The Prime Minister arrived at an EU summit on the spiralling debt crisis on Sunday, insisting that the eurozone’s problems are affecting all member states and not just the countries that have signed up to the single currency.
Mr Cameron said: “The crisis in the eurozone is having an effect on all our economies, Britain included.
“It’s having a chilling effect. We need to deal with this issue and so it’s right to have a European council (summit) and for the European council to discuss this issue here in Brussels today.”
EU leaders are weighing in to the debate on a third day of talks designed to forge an economic crisis response which will calm market fears and deliver reassurance that the eurozone has a credible package of measures to withstand current and future economic shocks.
On Saturday, finance ministers including Chancellor George Osborne, struck a provisional deal to use 100 billion euros (£87 bn) on strengthening European banks’ liquidity.
Bank recapitalisation will not affect British banks, which have already been shored up since the current economic crisis began in 2008.
But the issue is one of three parts of an ambitious package deal due to be announced at another EU leaders’ summit in Brussels next Wednesday.
EU leaders are striving to reach an agreement on the other two parts – a massive increase in EU bailout funds, rising potentially from billions to trillions, and a 50 per cent write-down of Greek debt repayment.
Draft summit conclusions on the table today confirm there will be another summit on Wednesday.
The draft goes on: “These measures will be an essential component of a broader package whose other elements will be agreed by the Euro Summit of 26 October.”
Speaking at a news conference late on Sunday, the Prime Minister said progress was being made but more had to be achieved in the run-up to another crunch summit in the city on Wednesday, which he confirmed he would be attending.
He said: “The eurozone countries must come together and take responsibility and produce a comprehensive and credible package which puts the success of the eurozone beyond doubt,” insisted Mr Cameron.
He acknowledged that this could mean closer fiscal and economic integration between the 17 single currency nations – but not at the expense of the UK national interest.
Sunday’s summit conclusions refer to the prospect of another EU treaty change to deliver the kind of economic changes necessary to steady the eurozone – something Mr Cameron insisted could be turned to the UK’s advantage.
Any treaty change is an opportunity for Britain to advance our national interest. David Cameron
With one eye on Monday’s Commons vote on a possible EU membership referendum, he emphasised: “Any treaty change is an opportunity for Britain to advance our national interest.”
He explained that the last treaty change enabled Britain to agree in return for opting-out of any further bailouts for eurozone countries, having been required to take part after a deal reached in the final stages of the last Labour government.
Mr Cameron said: “The idea of another examination of the possibility of limited treaty change has always been floating around because the countries of the eurozone see a need to do that.”
If there were a treaty change, the Prime Minister continued, it would need unanimous agreement of the 27 leaders before going ahead, and would take years to implement, so “let’s not get ahead of ourselves”.
Meanwhile, it was crucial to safeguard the interests of “those countries that want to stay out of the euro but are part of the single market”.
He added: “I think this crisis means that greater fiscal and economic integration is inevitable (in the eurozone) but that must not be at the expense of the UK national interest.”