UK'S POSITION:EURO ZONE leaders must "get a grip" at their summit today, George Osborne, the British chancellor of the exchequer, has warned, because the euro zone debt crisis is serious enough to threaten a repeat of the 2008 economic crisis.
In an interview with the Financial Times, Mr Osborne said he was “very worried” that the euro zone sovereign debt crisis could spiral out of control.
“We see the potential for a set of economic events that could be as damaging as 2008,” he said.
The chancellor was optimistic that the euro group would make progress involving the private sector in reducing Greece’s debts but said that this was only the first step towards a necessary fiscal union in the single currency area.
He acknowledged that his enthusiasm for greater euro zone integration turned British foreign policy on its head.
He added that in the medium term the euro zone “has to start looking at how you follow that remorseless logic of monetary union into greater fiscal union”.
Although Mr Osborne did not criticise Germany directly, he called for “serious consideration” of Eurobonds, which would force Germany to stand behind southern European debt.
In the short term, Mr Osborne was hopeful that the euro zone summit would make progress.
“I’m optimistic that they are going to be able to produce plan. . . but they have really got to show the world that they can get a grip,” he said. – (Copyright The Financial Times Limited 2011)
