David Cameron urges action for euro zone
British Prime Minister, David Cameron, is urging European leaders to take “decisive steps” to deal with the debt crisis.
Mr Cameron said the crisis is putting the global economy in a “precarious” situation and told leaders of the 17-member nation they had a “collective responsibility” to avoid a disaster.
Mr Cameron told the Financial Times on Monday: “We need to push, but in the end it is their currency, it is their issue – they have to take the decisive steps.”
His comments come as Europe’s largest two nations, Germany and France, have so far failed to agree on which course of action to take.
France has said the euro zone’s newly extended €440 billion (£378 billion) bailout fund should be used but Germany is insisting that the fund should be used as a last resort.
However, at a summit in Berlin yesterday, German chancellor Angela Merkel and French President Nicolas Sarkozy said they are determined “to do the necessary to ensure the recapitalisation of Europe’s banks”, while also dealing with crisis-torn Greece.
They are expected to deliver a plan that resolves the sovereign debt crisis by the end of the month – prior to a G20 summit in Cannes in early November.
Last week, US President Barack Obama urged Europe to take action immediately, describing the crisis as “the largest obstacle to a recovery in the United States”.
Last month, the European Commission warned that euro zone growth will almost grind to a halt in the second half of the year, as a result of the debt crisis.
Growth is expected to be hit as several euro zone nations having to reduce spending in order to slash debt levels.
However, the Commission is confident that there will not be a double-dip recession.