Cameron: I’ll fight to keep Britain safe in euro storm – PM

DAVID Cameron has issued a stark warning about the “perilous economic times” gripping the UK’s economy, as he used a keynote speech to highlight the risks to the future of the European single currency.

The Prime Minister yesterday insisted he would do “whatever it takes to keep Britain safe from the storm” surrounding the mounting eurozone debt crisis, but made clear that the UK could not be immune from the consequences of a collapse of the euro.

Mr Cameron used a high-profile speech to business leaders to deliver his starkest warning yet of the dangers created by the debt crisis in Greece, as he said the UK should be “resolute” as it faces the potential fallout from the eurozone.

However, Business Secretary Vince Cable appeared to contradict the Prime Minister’s stance on the eurozone crisis as the Lib Dem Cabinet minister insisted Britain “shouldn’t be panicking or be unduly negative”.

Mr Cameron’s speech came ahead of a conference call the Prime Minister had with European leaders, including the German chancellor Angela Merkel and newly installed French president François Hollande yesterday afternoon.

They were joined by the president of the European Council, Herman van Rompuy, who suggested the discussion before a meeting of the group of G8 leader’s today, and EU commission president José Manual Barroso.

Mr Cameron had used Prime Minister’s Questions at Westminster to warn the eurozone “either has to make up or it is looking at a potential break-up”.

The Prime Minister yesterday said the Greek debt problem and the survival of the euro were a “crisis that never really went away”.

He said: “Turn on the TV news and you see the return of a crisis that never really went away. Greece on the brink; the survival of the euro in question.

“Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course, but the right course. Not to dodge responsibility for dealing with a debt crisis, but to lead our country through this to better times.

“My message today is that it can be done. We are well on the way in this journey.”

The Prime Minister cited the remarks made by Bank of England governor Sir Mervyn King, who this week warned that the eurozone seemed to be “tearing itself apart”.

Mr Cameron went on to claim that the “eurozone is at a crossroads” as he repeated his warning made at Prime Minister’s Questions that “it either has to make up or it is looking at a potential break-up”.

The Prime Minister, in a message directed at Germany, said that the “remorseless logic” of monetary union meant that successful economies must be prepared to do more to shore up weaker states on the periphery, such as debt ravaged Greece.

He said: “It is becoming increasingly clear that they are less likely to be able to sustain that necessary adjustment economically or politically unless the core of the eurozone, including through the European Central Bank, does more to support demand and share the burden of adjustment.

“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 everybody.

“As I have consistently said: it is in Britain’s interest for the eurozone to sort out its problems.

“But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system. We are living in perilous economic times.”

However, Mr Cable said the UK could not directly influence the eurozone and the government must concentrate on ensuring Britain had a well-run economy with “growth and jobs on the one hand, and financial discipline on the other”.

He said: “We need to get the risks in perspective” adding there was no reason the crisis should spread beyond Greece.

Meanwhile, Mr Cameron defended the coalition’s programme of spending cuts, tax rises and pay freezes, which he insisted were already reducing the deficit.

He said: “Let me be clear, we are moving in the right direction – not rushing the task, but judging it carefully.”

Labour said the Prime Minister was using the eurozone crisis as “an excuse for Britain’s problems” and should be urging Europe to rethink its approach to austerity and the role of the European Central Bank.

Ed Miliband said: “David Cameron isn’t part of the solution, he is part of the problem. He promised Britain there would be recovery and he has delivered a recession.

“All of Europe’s leaders, including David Cameron, bear responsibility for the fact that over the last two years they haven’t sorted out the problems of the eurozone and they haven’t had a proper plan for growth and jobs in Europe.”

Mr Miliband added: “The Prime Minister should be showing leadership, not looking like a man who is a bystander to events, shouting from the rooftops.”

Shadow chancellor Ed Balls said: “David Cameron is deeply complacent. His failed policies have pushed us into recession and the government is now set to borrow an extra £150 billion to pay for this economic failure.”