G8 summit: David Cameron calls for action on Eurozone meltdown

The group, meeting in the United States, pledged to “take all necessary steps” to avoid a meltdown of the single currency. At Camp David in Maryland, the leaders said they wanted to keep Greece in a “strong” Eurozone, after a week that saw billions wiped off markets.

It was reported the leaders discussed a new plan, formulated by Italian Prime Minister Mario Monti, under which European governments will fund guarantees for bank deposits in vulnerable banks.

It comes amid claims savers are already withdrawing cash in Greece and Spain, fearing their countries’ withdrawal from the euro. But German Chancellor Angela Merkel is resisting pressure to commit billions more of German taxpayers’ money for a new “firewall” to back up the banks.

A G8 communique last night affirmed “our interest in Greece remaining in the Eurozone while respecting its commitments”. It also committed the G8 “to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses”. However, in a nod to their differences the leaders acknowledged “the right measures are not the same for each of us”.

Uncertainty has returned in the wake of Greece’s failure to form a government last week and fresh elections called for June. A new poll yesterday showed the left-wing anti-austerity Syriza party marginally in the lead.

Hosting the talks yesterday, US President Barack Obama sought to maintain a diplomatic front, saying that both “fiscal consolidation” and “growth” were required to restore stability in Europe. However, he joined an alliance of leaders including Cameron, French President Francois Hollande and Monti in calling on Germany for a change of course.

Hollande said European funds could be used to inject capital into Spain’s banks –damaged by their exposure to Greek debt – which would mark a significant acceleration of EU rescue efforts.

Cameron said he detected a “growing sense of urgency that action needs to be taken” on the Eurozone crisis.