Manchester: Europe must urgently fix its banks and deal with its debts, British Prime Minister David Cameron said on Sunday, warning that the euro zone’s problems were threatening the global economy.
Any prolonged economic crisis in the rest of Europe, the UK’s main export market, would hurt Britain when the government is trying to rebalance a struggling economy and increase the sale of British goods and services overseas.
Britain’s PM DavidCameron Speaks On The Bbc’s Andrew Marr Show, In Manchester. (Photo Reuters)
Cameron, speaking on the first day of his party’s annual conference in the northern English city of Manchester, said there was little that Britain could do to “insure” itself against what was happening on the continent.
“The euro zone is a threat not just to itself but also a threat to the British economy, but a threat to the worldwide economy,” Cameron told BBC television.
“Action needs to be taken in the next coming weeks to strengthen Europe’s banks, to build the defences that the euro zone has, to deal with the problems of debt. They’ve got to do that now. They’ve got to get ahead of the markets now.”
The Conservative-Liberal Democrat coalition government, in power since May 2010, is increasingly concerned about a lack of growth in the British economy, with critics saying its tough austerity plan is only making matters worse.
But the coalition argues that dealing with Britain’s debts decisively is the only way to restore long-term growth and stability, and to also keep financial markets at bay.
Cameron said he was not about to “tear up” Britain’s own deficit reduction plans, but said everything must be done to “fire up the engines of the British economy”.
He unveiled plans to make thousands of acres of state-owned land available in a “build now, pay later” scheme for property developers which he said could mean 100,000 homes were built and 200,000 jobs created.
Searching for growth
Britain’s economic destiny will dominate much of the Conservative Party’s annual gathering after a leading parliamentarian criticized finance minister George Osborne for lacking a coherent growth strategy.
With no spare cash to spend on stimulus, the government has looked to the Bank of England to keep monetary policy loose to support growth and ministers have ramped up pressure in recent weeks for more action.
The BoE meets this week for its monthly policy meeting with some expecting the central bank to start printing money again, despite inflation running at more than twice the 2% target.
The Conservative conference also is likely to see a renewed focus on Britain’s relationship with Europe. Many backbench Conservative MPs are angry that Cameron has not taken a tougher line with the European Union over funding and human rights.
Cameron said he wanted to claim back some powers from European institutions but slapped down party members who want to leave the EU.
“I think what most people want in this country is not actually to leave the European Union but to reform the European Union and to make sure the balance of powers between a country like and Europe is better.”
European officials are scrambling to avert a Greek debt default, which could wreck the balance sheets of European banks, damage the prospects of the euro single currency and possibly plunge the world back into another financial crisis.
“The problem for Europe right now is dealing with the eurozone problem, that is where all our energies should go. Because we’ve got to solve this problem in order to get the world economy to grow again,” Cameron said.