Cameron: EU crisis 'chilling' UK

David Cameron spoke today of the “chilling effect” of the eurozone crisis on Britain.

He arrived at an EU summit in Brussels insisting the issue had to be tackled once and for all – and it involved all member states and not just those in the single currency club.

“The crisis in the eurozone is having an effect on all our economies, Britain included.” the British Prime Minister insisted.

“It’s having a chilling effect. We need to deal with this issue and so it’s right to have a European council (summit) and for the European council to discuss this issue here in Brussels today.”

EU leaders were taking their turn on the third day of talks designed to forge an economic crisis response which will calm market fears and deliver reassurance that the eurozone has a credible package of measures to withstand current and future economic shocks.

Yesterday EU finance ministers, including Michael Noonan, produced a provisional agreement to the tune of €100bn on strengthening European banks’ liquidity.

The issue is one of three parts of an ambitious package deal due to be announced at another EU leaders’ summit in Brussels next Wednesday.

Today the leaders were striving for an accord on the other two parts – a massive increase in EU bailout funds, rising potentially from billions to trillions, and a 50% write-down of Greek debt repayment.

Draft summit conclusions on the table today confirm there will be another summit on Wednesday: the text welcomes yesterday’s agreement on banking sector measures “and invites the Council to finalise this work at its meeting of 26 October”.

The draft goes on: “These measures will be an essential component of a broader package whose other elements will be agreed by the Euro Summit of 26 October.”

The text also addresses concerns of any split between the 17 eurozone countries and the other ten, stating: “The European Council agreed on the need for coherence between the Euro area and the European Union, in full respect of the integrity of the European Union as a whole and its operation at 27.”

In an address to the summit, European Parliament President Jerzy Buzek said all EU institutions had to stay united to deal with an ``extraordinary'' economic and financial situation:

“The markets are impatient. Our citizens are tired, but we must explain better that we are working hard in their interests.

“For today the most important topic is of course lowering Greece’s debt burden and deciding how much, and in which way, private investors should be involved.

“The second important issue for today is the recapitalisation of European banks. This recapitalisation should be properly undertaken at the EU level, and with as much co-ordination as possible.

“The third important issue for today is to create a firewall around economies which are in difficulty.”

Mr Buzek urged to “draw conclusions” from the crisis and “reflect on Europe’s future”.

He went on: “The main conclusion is that we cannot afford the situation of an artificial unity which is a kind of fragmentation in reality – fragmentation reinforced by particular interests of member states.

“In practice, we talk about the EU, but we build our politics mostly on national levels. Union is like a dream, whereas the nation state is current business. Europe it is not only a common market, but a coherent political concept – maybe even a power – able not only to overcome crises, but to have an impact on the modern world.”

Mr Buzek said everyone should be prepared for another Treaty change – strictly on economic governance issues – but warned:

“I am concerned that our citizens might not be ready for another round of referendums and ratifications.

“If any Treaty change is possible in the near future we certainly need to convince our citizens. It will take time but it also requires a huge involvement and commitment of politicians.”