Saving euro is matter of political will says Cameron

There are “very real” questions about whether the political will exists to fix fundamental problems with the eurozone, David Cameron warned last night.

The prime minister said the “logical” step to deal with fears over the future of the single currency would be closer fiscal union.

However, he said he expected a series of piecemeal solutions being hammered out between the 17 member states instead.

The intervention came as Mr Cameron appeared before the powerful Commons Liaison Committee – made up of the chairs of the cross-party backbench committees.

Questioned about concerns over debt-laden states he said: “To make a single currency work either you need all the countries to behave in a more Germanic-like way in terms of fiscal responsibility and debt levels, or you need to have some way of transfers between countries.

“In America for instance, if Texas has a good year it pays more in tax, it gets less in public spending. You don’t have that mechanism in the eurozone, so you have to have one of those two circumstances to come back.

“We are all politicians, we can all make our minds up as to whether there is political will in Europe to do either.”