Belfast Telegraph

Home News World

Greece must keep its euro promises, warns David Cameron

By David Usborne in Chicago and Andy McSmith

David Cameron has issued his bluntest warning yet to Greece that voters need to “meet their commitments” as a member of the eurozone in elections next month or leave the currency union.

Speaking at the Nato summit in Chicago, and three days before a crucial EU meeting, the Prime Minister said eurozone leaders must prepare for either outcome and be ready for the repercussions of the Greek vote, set for 17 June. The poll was called after Greek parties failed to form a new government earlier this month.

“We are coming to a decision point where Greece is going to vote. It has to be absolutely clear there is a choice: they can vote to stay in the eurozone and meet their commitments, or they can vote to give up on their commitments and effectively give up on the eurozone,” Mr Cameron said.

No-one could tell the parties what to do, but he can have left them in no doubt of how he feels. “The choice Greece faces is maintaining its commitments and maintaining its place in the eurozone or deciding that's not the path it wants to take. What is required is decisiveness, strong actions by government, whether action to deal with deficits, to deal with the banks, to calm markets,” he said.

“The eurozone has to put in place the most robust contingency plans for both eventualities because the world is suffering from continued uncertainty in the eurozone. So this is a decision point.”

Mr Cameron also defended German Chancellor Angela Merkel whose insistence on austerity has been blamed for preventing the G8 summit from making progress.

“Obviously she wants to make sure that countries in the eurozone that signed up to all sorts of commitments meet those commitments. She did show some flexibility on what more can be done on the growth agenda.”

Cabinet colleague Ken Clarke, a lifelong Euro-enthusiast, said staying in the euro is still an option for Greece.

“But if they get a lot of cranky extremists elected, they will default on their debt and everybody says they will leave the euro. For the Greeks, that will be disastrous. They will encounter real poverty,” he said.

While Mr Cameron and Mr Clarke appealed to Greek voters to face reality, the Deputy Prime Minister, Nick Clegg, pleaded with German taxpayers to be patient with the Greeks.

Interviewed in Der Spiegel, he said: “Whilst I have huge sympathy with German taxpayers, it is not sustainable to believe the eurozone can thrive through fiscal discipline alone.”

Mr Clegg also lamented a lack of leadership in the eurozone, and the political instability which has brought down nine eurozone governments in three years. “This cannot carry on, because the combination of economic insecurity and political paralysis is the ideal recipe for an increase in extremism and xenophobia,” he said.

There was another warning against the risk of a forced Greek exit from the euro and the impact on others from the shadow chancellor, Ed Balls.

“If Greece does try to leave in a disorderly way it would cause huge damage to the world economy, to the British economy, and to the eurozone economy, as the eurozone has not sorted out how to stop this crisis spreading to Spain and Italy,” he said.

The looming crisis in Europe, combined with austerity at home, is proving corrosive for the Government. A ComRes poll for the Independent on Sunday showed for the first time that David Cameron's personal rating is lower than Ed Miliband's, with only two-thirds of Conservative voters saying he is a good Prime Minister.

Former Chancellor Alistair Darling claimed the Government had added to the country's economic problems, causing a second recession by focusing on spending cuts instead of growth.

“Reducing public expenditure at a time when businesses and individuals stop spending runs the risk of crashing the economy, and that's pretty much what's happened,” he said.

Belfast Telegraph

Popular

From Belfast Telegraph