Post by dait on Nov 18, 2011 10:31:28 GMT -5
British Prime Minister David Cameron and German Chancellor Angela Merkel have acknowledged their differences over the way forward in the euro crisis. However, the two leaders insisted that Britain and Germany will work together in a spirit of "strong friendship".
Speaking after talks in German capital Berlin, they stressed areas of agreement over measures to improve competitiveness in Europe economies, hold down the EU budget and encourage member states to deal with their debts and deficits.
But they left no doubt that they have not papered the cracks over Germany's demand for treaty change to prevent a repeat of the sovereign debt crisis in the eurozone and European Commission calls for a Financial Transaction Tax, which Britain opposes.
Mr Cameron said: "It is obvious that we don't agree on every aspect of European policy, but I am clear that we can address and accommodate and deal with those differences.
Ms Merkel said that Germany wants a "limited treaty change" to ensure that eurozone members stick to their commitments under the Stability and Growth Pact in future.
This process would not involve countries such as Britain, which has not adopted the single currency Germany is hoping that the upcoming summit of the European Council on December 9 will agree measures to amend EU treaties. Mr Cameron said he and Mrs Merkel had agreed that "a strong, successful and sustainable euro is in all our interests".
"We need this crisis to be resolved. Britain, like Germany, has a big national interest in this crisis being resolved," he said. Germany's Foreign Minister Guido Westerwelle has said the ECB should not print money to help ease the eurozone crisis.
In an article for the Financial Times, Mr Westerwelle argued that this would offer only short-term relief and could boost inflation and dissipate reform. While he conceded that the measure might bring temporary relief, he insisted it would be a "momentous mistake" in the long run.
Europe's main stock markets opened lower this morning, as fears grow over potential contagion from the deepening eurozone debt crisis. The German-Spanish borrowing rate gap widened to a record five percentage points as the cost of Spain's borrowing continues to hover just under the key 7% seen as unsustainable.