David Cameron, Britain’s prime minister, will on Thursday warn that the single European currency could unravel in a way that “carries huge risks for everyone” unless the eurozone’s 17 members move rapidly towards full fiscal and political union.
“The eurozone is at a crossroads,” Mr Cameron will tell a business audience in the north-west of England. “It either has to make up or it is looking at a potential break-up.
“Either Europe has a committed, stable, successful eurozone with an effective firewall, well-capitalised and regulated banks, a system of fiscal burden sharing and supportive monetary policy across the eurozone or we are in uncharted territory which carries huge risks for everyone.”
Mr Cameron’s stark warning amplified comments made on Wednesday by Sir Mervyn King, the governor of the Bank of England, who said the eurozone was “tearing itself apart without any obvious solution”, threatening the British economy and banking sector.
Mr Cameron and Sir Mervyn’s comments highlight the growing alarm in London that the British economy – already in a double-dip recession – could be plunged into further difficulty as a result of the crisis in the eurozone, which is the UK’s biggest trading partner.Page 1 of 3 | Next Page