Debt crisis has split Europe down the middle - Ed Miliband

THERE is a split between leaders on how to deal with eurozone debt, Ed Miliband claimed today.

He accussed world leaders of failing to agree plans to boost economies and cut spending.

The Labour leader told MPs: “The international community is divided between those who believe we must have a decisive shift towards growth... and those who believe the answer lies in more of the same.”

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But Prime Minister David Cameron insisted leaders were united at last weekend’s G8 summit.

Mr Miliband said austerity had failed in Britain. He demanded new plans to cut unemployment and stimulate growth.

The Labour leader said: “For two years you have been the high priest of austerity, you have been telling the world that austerity alone is the answer.

“But now the recognition has dawned that it isn’t working and you find yourself on the wrong side of the argument.”

Mr Miliband accused the PM of “desperately scrabbling around” to back new French President. Francois Hollande is widely seen as being against deep cuts, preferring spending to bolster demand.

The Labour leader called it ”the ultimate irony” that Mr Cameron, whom he blamed for creating the UK’s double-dip recession, was “lecturing other people on how to get growth”.

He also criticised the PM’s work ethic after he reportedly spent time relaxing during his trip to the US, amid accusations he “could win a medal for ‘chillaxing”’.

Mr Miliband said: “What did you actually achieve at this summit?

“We know some of the things you did: you watched the football - nice pictures; you went to the gym; you even squeezed in some sightseeing.

“The only thing there isn’t a photo of is you making a difference to the world economy. In other words, doing your job.”

He was speaking after the Prime Minister updated the Commons on the Camp David summit,

Mr Cameron said the G8 leaders agreed that Greece’s financial turmoil was the biggest risk to the eurozone and world economies.

He told MPs: “The future of Greece is for the Greek people to determine, it’s for them to decide what is best for their country.

“But I don’t believe we can afford to allow this issue to be endlessly fudged or put off.”

He said fresh Greek elections after parties failed to form a coalition should be “a straightforward choice” between keeping the single currency or “taking a different path”.

He called on European leaders to develop contingency plans for a Greek exit for the euro - or a commitment to stay in.

“This should involve strengthening banks, protecting financial systems and ensuring decisive action by European institutions to prevent contagion,” said Mr Cameron.

But he denied there was a trade-off between deficit reduction and growth, saying: “You need the first to deliver the second.”

The Prime Minister went on: “At a time of tight budgets, a proper growth plan requires not just a credible fiscal policy which secures low interest rates, but also structural reform to make our economies more competitive, active monetary policy and innovative use of our hard-won credibility to secure investment in long-term infrastructure.

“We are taking all of these steps in the UK and we are promoting them across Europe as well.”