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PM's 'make up or break-up' warning

PM's 'make up or break-up' warning

David Cameron issued a stark warning today that the eurozone "either has to make up or it is looking at a potential break-up".

Speaking at Prime Minister's Questions, Mr Cameron signalled a harder line on the crisis as he urged European leaders to act quickly to put in place a proper firewall and banking reforms.

His remarks, ahead of a major speech on the economy tomorrow, mark a significant shift in Coalition rhetoric. Just two days ago, Chancellor George Osborne had reprimanded EU central bankers for 'openly speculating' about a Greek exit from the euro.

Mr Cameron's remarks about 'a potential break-up', in reply to Sir Peter Tapsell, were not off-the-cuff and will feature in his speech tomorrow, Treasury sources told PoliticsHome.com. Number 10 sources also said: "It wasn't something that just popped out of his mouth."

Tonight, Ed Balls accused the Prime Minister of diluting the UK's influence in Europe and hindering its ability to protect itself from the euro crisis.

The Shadow Chancellor told Channel 4 News that the Prime Minister's decision not to follow through with talks on European economic reform had damage the UK.

"I’m afraid that the Prime Minister walking away in December from discussions about economic reform in the euro have meant that our voice is more discounted than it should be."

"Britain should be influential in these debates," he said. Mr Balls also contrasted David Cameron's policy with that of his predecessor, which he said gave the UK "big influence" in Europe.

Earlier at PMQs, Mr Cameron also faced taunts from Ed Miliband over his refusal to meet French President François Hollande prior to his election.

The Labour leader told the Chamber: "It's a shame he didn't see the French President three months ago when he was in the United Kingdom...but I'm sure Mr Speaker a text message and LOL will go down very well."

But Mr Cameron shot back: " I have to admit that perhaps I've been overusing my mobile phone but at least as Prime Minister I know how to use a mobile phone rather than just throw it at the people who work for me."

He also said he looked forward to discussing measures that "could seriously add growth in Europe" such as the energy market, the digital market and the services single market, adding:

"There will be common ground between the British view and the French view...the French president does not back the Labour view that the way out of a debt crisis is to borrow more, spend more and add to your debts.

"What we need to have is the low interest rates that we have because when the Government came to power we had the same interest rates as Spain, ours are now under 2%, theirs are over 6%."

Earlier, a leading adviser to the president of the European Council said that "no one is planning for a Greek exit" from the euro, insisting such a move would be "extraordinarily difficult".

Richard Corbett's remarks directly contradicted International Monetary Fund's director Christine Lagarde, who warned last night that the euro zone must be "technically prepared for anything".

"That’s not the assumption we’re working on," Mr Corbett told BBC's Today programme.

"We’re not planning for a Greek exit, nobody is planning for a Greek exit, that would not help Greece, it would not help the rest of the European Union, and, technically, by the way, it’s an extraordinarily difficult thing to do."

But Bank of England governor Sir Mervyn King said the Government and the Bank were discussing plans for the break-up of the eurozone.

Mr Osborne yesterday criticised "speculation" about the future of the eurozone for flagging economic confidence.

"It’s the open speculation from some members of the eurozone about the future of some countries in the eurozone which I think is doing real damage across the whole European economy."




This afternoon European Commission President José Manuel Barroso warned Greek voters there was no way out of the country's austerity programme.

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