Tags: cameron | euro | crisis | disaster

Britain's Cameron: 'Time Is Short' to Avert Disaster

Sunday, 09 Oct 2011 09:15 PM

Eurozone leaders must accept "collective responsibility" and take "decisive steps" to prevent economic disaster, British Prime Minister David Cameron told the Financial Times.

He also called on France and Germany to bury their differences and to introduce a decisive plan to end the uncertainty before the end of the year.

"The situation with the world economy is very precarious...you either make the eurozone work properly or you confront its potential failure," he said.

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David Cameron
(Getty Images photo)

Cameron urged European leaders to adopt a "big bazooka" approach to resolving the currency crisis, warning they have just a matter of weeks to avert economic disaster.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks on Sunday that a new comprehensive package for solving the eurozone debt crisis would be unveiled by the end of the month.

Cameron also called for credible stress tests on Europe's banks and said Britain's banks, including Royal Bank of Scotland, would pass them "if they are properly carried out."

"They need to be tough, they need to pass the credibility test. Some of my fellow leaders complain that it's all about markets and speculators, but none of us are proposing to change the market system."

He said the next stress tests should be a model for sovereign debt writedowns and said the British government would "do whatever is necessary," which may include injecting more funds into RBS to bolster its core tier one capital ratio.

Commenting on domestic issues, Cameron said government plans to bolster lending for small companies can be worked up "relatively quickly," while he also endorsed the Bank of England's decision to restart quantitative easing.

On the issue of euroscepticism in his own party, voiced at last week's Tory conference, Cameron said EU treaty reform should not be on the "immediate agenda," but added that he feels it would be in Britain's interest to retrieve some powers from Brussels.

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