The British Prime Minister David Cameron and the German Chancellor have met to discuss the eurozone debt crisis in Berlin. The pair also acknowledge their differences in regards to the tactic that should be employed to deal with the single currency region, despite the differences the pair vowed to work together in a spirit of ‘strong friendship’ as their common concern needs solving.
Improve the competitiveness
They held their own talk after the talks in Berlin where they emphasized the measures that would be needed to improve the competitiveness in economies across Europe, hold down the EU budget and encourage, in whatever way possible, members to work on solving their own debts and deficits.
However, they did not meet eye to eye on one point, this was Germany’s demand for a treaty change to stop the sovereign debt crisis in the eurozone from happening again in the future and calls to the European Commission for a Financial Transaction Tax, which Britain is totally against.
Cameron had stressed that while the pair where not going to agree on every part of the European policy, he was sure that they would be able to accommodate those conflicting views in trying to do what was right for the entire region.
In the talks the German Chancellor had made a strong case for a ‘limited treaty change’ as a way of making sure that members of the eurozone stay true to their commitments in the coming years under the Stability and Growth Pact.
Germany is hoping that the forthcoming summit of European Council in December will come to an agreement to make the necessary amendments to the EU treaties. Both Cameron and Merkel where in agreement that ‘a strong, successful and sustainable euro is in all our interests’.
On the idea of Britain’s quantitative easing, where more money will be printed and pushed into the economy, was one Germany’s Foreign Minister Guido Westerwelle was against as he felt that it would not ease the eurozone crisis. He stated that the move would end up being a ‘momentous mistake’ in the long run.
Solve debt crisis
The talks between the pair ended a two-month closing low, after reacting in the markets was seen to the Chancellors message that Europe’s largest economy would support monetary measure to solve the eurozone debt crisis.
London’s FTSE index closed 1.1% lower at 5,363, and the German-Spanish borrowing rate gap increased to a record five percentage points as the cost of Spain’s borrowing continue to hover under the 7% level, which is seen as unsustainable.