Obama, Cameron call for urgent action to save eurozone

US, UK leaders say failure to deal with crisis will infect economies across the globe.
Barack Obama and David Cameron have issued their strongest statements yet about the eurozone crisis, emphasising the impact that they feel the continuing turmoil could have on the rest of the world. Their warnings came at the end of a summit of leaders of G8 countries at Camp David in the US over the weekend (19-20 May) at which they vowed to take steps to “promote growth and jobs”. 

The discussions at the gathering, during which Angela Merkel, Germany’s chancellor, was increasingly at odds with the US president and the British prime minister, raise the stakes as European Union leaders prepare to meet in Brussels on Wednesday (23 May). 

According to diplomats, François Hollande, France’s new president, who will be attending his first summit of EU leaders, will use the meeting to bring measures such as Eurobonds and the use of the €500 billion European Stabilisation Mechanism to directly re-capitalise banks – both changes that Merkel opposes – back onto the agenda. 

Because of continuing uncertainty in Greece – which is to hold a general election on 17 May after a first ballot, earlier this month, proved inconclusive – and Merkel’s resistance to a change in a direction of policy away from strict austerity, Obama and Cameron fear that the eurozone’s decision-makers will be unable, or unwilling, to take any further steps to shore up the currency bloc. 

Obama, warning that problems in the eurozone could infect the US economy, said that there was an “emerging consensus” that countries in the EU needed to “invest in job-creating infrastructure and other programmes at the same time as it tackles its deficits and debt”, adding that growth and jobs had to be a “top priority”. 

Cameron described the “growing sense of urgency that action needs to be taken [and] contingency plans need to be put in place.” 

He added: “The strengthening of the banks, governments and firewalls, all of those things need to take place very fast.” 

Sources close to the G8 meeting at the weekend said that Merkel was unwilling to see any reference to the eurozone and its problems in the final communiqué. However, it did appear, with leaders insisting that “a strong and cohesive eurozone” was “important for global stability”. 

“Greece should remain in the eurozone,” it added. 

According to the latest opinion poll on Greece’s election, published by Kathimerini newspaper, the far-left Syriza party is in the lead, on 28%. New Democracy, the main centre-right party, is on 24%, with centre-left Pasok a distant third on 15%.