Europe could be plunged into war if efforts to save the euro fail, warns German leader Angela Merkel
by James Lyons, Daily Mirror 27/10/2011 Decrease font size Increase font size
DAVID Cameron had to sit on the sidelines last night as the heads of countries in the euro met to try to strike a deal to save the currency.
The Prime Minister was only invited to take part in an informal hour-long summit of all 27 EU nations in Brussels.
He was then left hanging around hoping 17 leaders including German Chancellor Angela Merkel and France’s President Nicolas Sarkozy could thrash out a deal.
Ms Merkel had dealt Mr Cameron an early blow by demanding European Union treaty changes and an international tax on city fatcats he opposes.
Then he got another slap in the face when Euro MPs in Strasbourg ignored the eurozone crisis and voted for a 6.6billion euro – or 5.2% – rise in Europe’s 2012 budget. That would take EU spending over 130billion euros next year and increase Britain’s bill by more than £700million.
He will now have to appeal to MEPs to honour their pledge to keep costs down. But this will mean teaming up with Ms Merkel and Mr Sarkozy, who appeared to snub him at yesterday’s informal talks.
Mr Cameron said after yesterday’s meeting: “We made some good progress. It’s very much in Britain’s interests that we solve this crisis.
“We have made good progress on the bank recapitalisation. That wasn’t watered down, it has been agreed.”
But he added that would only happen after “other parts of a full package go ahead” at the meeting he was excluded from. Leaders were last night trying to strike a three-part deal including writing off up to 60% of Greece’s debts.
They also hoped to agree on how much more money Europe’s banks should horde to protect them from the losses.
And they had to figure out how to boost the eurozone bailout fund to more than £1trillion to stop the crisis spreading to other countries with big debts such as Silvio Berlusconi’s Italy. Ms Merkel’s fatcats demand angered Tory MPs who staged a mutiny over Europe this week.
Mark Pritchard, secretary of the powerful 1922 committee of backbench Conservatives, said: “This provides the opportunity for Britain to repatriate significant powers back from Europe.”
The Prime Minister has said he wants to cut the powers of Brussels but Deputy PM Nick Clegg opposes it.
Labour leader Ed Miliband taunted Mr Cameron over the Tory split at Prime Minister’s Questions yesterday. He said: “We have a Prime Minister who has spent the last week pleading with his backbenchers, not leading for Britain.” Shadow Foreign Secretary Douglas Alexander said last night the Prime Minister must fight the “inflation busting” 5.2% EU budget rise. He said: “Last time the PM promised a freeze and then came out claiming that a rise was a victory. This time David Cameron must do better – he must not support another inflation busting rise in the EU budget.”
A Downing Street spokesman said: “Britain – along with France, Germany and others – will push for a more realistic proposal.”
The European heads of state hoped the outcome of last night’s summit would be positive enough to avoid a meltdown in the money markets.
Ms Merkel had even warned European countries could end up warring with each other if the euro collapses.
She told the German parliament: “No one should think that a further half century of peace and prosperity is assured. If the euro fails, Europe will fail.”
The FTSE 100 had a late rally last night to overcome losses triggered by fears that EU leaders would not reach agreement.
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