David Cameron on Eurozone: “Time to Make or Break”

David Cameron

British Prime Minister David Cameron on Thursday warned the European countries that it was “make or break time” for the European currency, and that he would do whatever was in his powers to make sure that Britain does not have to suffer as a result of the turmoil that engulfs the European economies.

He charged that the economic problems of Europe “never went away” and that the continent was not at crossroads as it fights to save the single currency. He reassured the business people in Manchester, in a speech he gave there, that he would do whatever is necessary to make sure that Britain is being kept safe from the storm.

In Cameron’s opinion Europe must have a committed, stable and successful eurozone, with effective firewall, well capitalized and regulated banks, with a fiscal burden sharing and a supportive monetary policy. Otherwise, he added, “we are in uncharted waters” with huge risks for everybody.

Speaking about what should be done in the situation, the premier said that the powerful economies should help the weaker ones find a balance, reminding that the debt-laden countries relied on the core countries to help them.

Britain was affected too, Cameron said, by the crisis of the debt in Europe but it is on the way to recovery. Speaking about the new proposed vision of France to replace austerity by economic growth, a vision that is shared by the Labor party in Britain too, Cameroon dismissed it adding that reducing the deficit was “vital.”

At a time when the survival of the euro is in question, the premier said he was not inclined to take the easy way out, to dodge responsibility for dealing with the crisis, but to lead the country to better times. Fighting the deep and long recession in Britain is one of the actions Britain must take, the premier said.

The British PM is expected to involve the leaders of the most performing economies in the world in the euro recovery process as a means to stop the crisis in Europe from spreading throughout the world.

This message would be conveyed to the members of the Group of Eight, who convene on Friday in Camp David, Maryland. He is expected to support the idea of a strong and united commitment to securing the economic recovery and the job creation.

In an attempt to try to boost world economy, Cameron, whose approval rate dropped in Britain as the economy of the country has slipped into recession, is expected to speak against protectionism and appeal for trade liberalization.

Reuters quotes an article Cameron published on Friday, in which he spoke of a need to foster a U.S.-E.U. trade agreement which would come into effect next year. He wrote for PoliticsHome, a political website, that together the U.S. and European Union account for a third of the world economy, and their trade agreement would be the best EU has cut yet.

He urged the countries to work together to give the world the expected big stimulus that would really make a difference: the expansion of trade freedoms. In this context he spoke of the lower trade barriers as best way to boost economy, and low interest rate as the best way to stimulate growth.

While in America, Cameron will also meet Francois Hollande, the new president of France, who had pledged to curb austerity and foster economic growth. Their meeting will have as theme a package of measures that could stimulate growth across Europe.

Cameron, who is a conservative and has been leading a coalition government for two years, sides with Angela Merkel and her debt cutting policy. British Telegraph speculates that British diplomats make efforts to build a good relation with Hollande amid perceptions that Cameron had failed to do so before Hollande was elected.

Hollande and his advisors are conscious of Cameron’s close ties to former president Nicolas Sarkozy, and the fact that he offered him tacit backing during the campaign. It is expected that Hollande and Cameron disagree on many issues, especially on European matters.

Soon after his victory, Hollande has criticized Britain for “treating Europe like a self-serving restaurant,” and not contributing enough to the economy. Last week Hollande described British government as “indifferent to the fate of the eurozone.”

The fate of the European currency seems to lie in the hands of the voting people in Greece, who are expected to cast their ballots again on June 17, after the voting on May 6 proved inconclusive and could not offer Greece a government.

The favorite in the elections is radical leftist Syriza party, led by 38-year-old Alexis Tsipras, which came second on May 6 and is expected to win the 8 parliament seats that made the difference between Syriza and the New Democracy.

This, however, may not unlock the stalemate of the Greek political landscape, because Syriza will not be able to form a government without PASOK or the New Democracy, and the situation may repeat itself considering that Syriza refuses to make alliances with parties that backed the bailout agreement with Europe, which is loathed by the population of Greece.

Greece could leave the eurozone, if the agreement is set for renegotiation by the Syriza, considering that the European countries do not accept any more negotiation on it, and the exit from the eurozone could bring chaos to the entire European community.

Earlier this week, both Angela Merkel and the new French president Francois Hollande reassured Greece that no one wants them out of the eurozone, a message delivered also by Central European Bank head Mario Draghi, and the Spanish Premier Mariano Rajoy.

On Thursday, European Commission president Jose Manuel Barrosso joint the chorus of those who advocate hope, saying that Europe is not in disarray and that these events only taught Europe that the economies are interdependent.11