My message to the Greeks would be - recognise reality and bite the bullet
Cameron
tells Greece to accept austerity or quit the eurozone
David
Cameron has issued an ultimatum to the Greek people to accept
austerity or leave the eurozone
21
May, 2012
The
Prime Minister insisted failure to provide clarity could prove
disastrous for the world economy, and told the Greek people that
fresh elections must decide once and for all whether the country
stays in the eurozone.
The
message came as his Cabinet colleague Ken Clarke said the European
banking system was already "in tatters".
Mr
Clarke warned that Britain was "heavily exposed" to
potential problems and could be among the next targets for market
speculation.
Deputy
Prime Minister Nick Clegg also criticised the lack of leadership on
the eurozone crisis, raising fears of a rise in extremism and civil
unrest unless it was addressed.
Mr
Cameron, in America for back-to-back G8 and Nato summits, said talks
with fellow world leaders had "crystallised" the problems.
"We
now have to send a very clear message to (the Greek) people - There
is a choice, you can either vote to stay in the euro with all the
commitments you have made, or, if you vote another way, you are
effectively voting to leave," he said.
"The
crucial thing is that eurozone leaders have to put in place
contingency plans for both of those eventualities - really clear
plans to keep our economies safe and stable."
He
went on: "What I think would be bad for Greece, bad for Europe,
bad for the world would be if we just allowed the can to be kicked
down the road with an inconclusive outcome," he said.
"It
has just got to try and make sure that this is a moment of clarity
and decisiveness for the eurozone."
The
premier indicated that German chancellor Angela Merkel - who has
driven the demands for austerity and fiscal discipline within the
eurozone - had shown signs of a willingness to compromise.
"I
think she did show some flexibility in terms of what more can be done
on the growth agenda and also what more can be done to handle the
risks inside the eurozone," he said.
"The
fact that you have got countries like Japan, America, Canada round
the table, as well as Britain, who are outside the eurozone but
affected by what happens inside the eurozone, I think, was helpful in
bringing that important pressure to bear."
Justice
Secretary Mr Clarke, a former chancellor, said Greek voters had to
"face up to reality".
"These
are hardships inflicted on them by the irresponsibility of their
former politicians," he said.
"But
they cannot just vote for saying, 'could people just carry on giving
us some money so we do not have to change anything'."
Mr
Clarke said the consequences would be "serious" if the
Greek people elected "cranky extremists" and defaulted on
their debts as a result.
"No-one
knows exactly what will happen in the rest of Europe. But the banking
system is in tatters, it is weak in very many places," he went
on.
"We
don't know what the knock on effects would be, they could be very
serious and of course people will start barking at the door of
Portugal, Ireland, Italy and here in Britain.
"Our
banks are heavily exposed to some of these countries, we have
recapitalised them so far...
"I
obviously hope the Greeks will vote responsibly and that we can avoid
turmoil."
Meanwhile,
Mr Clegg warned that Germany must do more than merely insist on
austerity if the eurozone was to stabilise.
He
also admitted that the coalition may have been too "dogmatic"
in its rhetoric on cutting spending.
In
an interview with Der Spiegel ahead of a visit to Berlin this week,
the Liberal Democrat leader said: "You have to have something
which creates a fiscal accompaniment to monetary union.
"Whilst
I have a huge amount of sympathy with German taxpayers and German
politicians who are reluctant, understandably because Germany is the
paymaster of the European Union, to entertain these ideas, I fear
that they are unavoidable.
"It
is not sustainable to believe that the eurozone can thrive through
fiscal discipline alone - it also has to, at some level, include an
ability to either share debt or to deal with shocks in one part of
the system or the other through fiscal transfers."
Mr
Clegg hit out at a lack of leadership on the eurozone crisis,
cautioning that there could be a rise in extremism unless it was
addressed.
"This
cannot carry on, because the combination of economic insecurity and
political paralysis, we know this from the history of our continent,
is the ideal recipe for an increase in extremism and xenophobia,"
he said.
Mr
Clegg denied that the coalition parties were "austerity
fanatics".
"Maybe
our rhetoric has been too dogmatic in the early stages because we
needed to persuade people it was necessary," he said.
Mr
Clegg insisted people should look at what the government had
"actually done".
"Last
autumn when I was told, when David Cameron was told, when George
Osborne was told that the predictions of growth and the public
finances in Britain were worse than we'd anticipated what we could
have done was to cut more to meet our initial target in dealing with
the structural deficit by the end of this parliament," he said.
"We
did something completely different. We said we're going to take two
more years to do this.
"So
we've actually enlarged the time, far from going too fast we've
actually said okay we're going to take this quietly and steadily."
Shadow
chancellor Ed Balls told Murnaghan that it would cause "huge
damage" if Greece made a disorderly exit from the eurozone.
"Greece
needs to stay in for at least as long as the eurozone needs to sort
its act out," he said. "And I am afraid that is taking a
very, very long time."
Mr
Balls said Mr Cameron and other leaders had to persuade Germany to
"pull its weight".
"In
the end... somebody has got to persuade Germany that this is a
catastrophe for Britain, Europe and the world and that Germany has
got to change course," he added.
"The
problem is, the German people went into the eurozone 10 years ago on
the clear promise that they weren't going to bail out Italy and the
central bank wasn't going to play this role.
"Both
things have got to change."
Greece, just take what the Euro Zone is trying to pull here. This is for the better.
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