Chancellor in ‘critical’ negotiations over eurozone crisis

A ROUND of weekend negotiations in Brussels will be “critical” in selling the eurozone crisis, Chancellor George Osborne said last night.

Before leaving for Brussels for talks tomorrow with fellow EU finance ministers, he said resolving the crisis would be a boost for growth, not just in the eurozone but in the UK and across the world. Mr Osborne is attending a meeting today ahead of a Sunday summit of all 27 EU leaders amid growing concern that an answer to the economic crisis in Europe is slipping from the grasp of the member states.

A crunch summit was planned for last Monday, but German chancellor Angela Merkel and French president Nicolas Sarkozy announced a postponement until Sunday after realising they were far from agreement on key issues such as a massive reinforcement of an existing bailout fund for struggling eurozone countries, and a major recapitalisation of European banks to help them withstand economic shocks.

A sense of indecision and confusion worsened on Thursday night when Paris and Berlin announced that another summit would be held in Brussels next Wednesday –– indicating no results were likely from the Sunday meeting.

The announcement only reinforced nervousness in financial markets and increased frustration in European capitals in the face of an apparent revival of the Franco-German axis in Europe.

“At the moment Merkel and Sarkozy are dictating everything on this crisis,” said one EU official.