Belfast Telegraph

Thursday 24 July 2014

Cameron calls for G20 euro urgency

David Cameron has spoken of the 'urgency' needed to resolve problems in the eurozone

Prime Minister David Cameron has called for Thursday's G20 summit to show a sense of "urgency" over the implementation of measures to resolve instability in the eurozone.

The gathering in the French Riviera resort of Cannes is set to be dominated by the chaos unleashed by Greek prime minister George Papandreou's announcement on Monday of a referendum on the eurozone rescue package for his country's ailing economy.

Mr Papandreou, who is coming under intense pressure to reverse his decision, is facing crisis talks with French president Nicolas Sarkozy and German chancellor Angela Merkel in Cannes.

Global markets were panicked into steep falls by his shock announcement, which threw into doubt the package agreed at an emergency meeting of the 17 eurozone states only last week.

Greek sources said the national poll - approved by Mr Papandreou's cabinet - could be held as early as next month. But the Greek prime minister must first survive a no-confidence motion in the Athens parliament on Friday as well as calls from some of his own party for him to quit.

European leaders had been hoping for a period of calm in which to finalise the details of last week's deal, which envisages banks taking a 50% "haircut" on Greek debts while the eurozone bailout fund is boosted to one trillion euro (£870 billion).

They now face weeks of uncertainty and potential market instability until it becomes clear whether the Greek electorate will back the plan - or indeed whether Greece can remain a member of the euro.

Their frustration at events in Athens was reflected by German finance minister Wolfgang Schaueble, who said: "It would be helpful if clarity is achieved as soon as possible on which path Greece wants to take."

It is still not clear how the third element of the rescue package - a firewall fund to prevent contagion in future crises - will operate, with suggestions that the eurozone could set up an IMF-administered special purpose vehicle, funded in part by cash-rich trade-surplus countries such as China.

Mr Sarkozy will argue the case for Beijing to supply funds at an eve-of-summit dinner with Chinese president Hu Jintao, though his negotiating position has been undermined by Mr Papandreou's surprise announcement.