eurozone crisis

Angela Merkel and David Cameron talked of the shared friendship between Germany and Great Britain, but made no progress on the question of a Financial Transaction Tax. Photograph: Odd Andersen/AFP/Getty Images
2.44pm: Shadow foreign secretary Douglas Alexander has claimed that Cameron achieved little in Germany today.

Alexander told BBC News that:


I fear that, for all the warm words at the end of today's meeting, David Cameron is actually leaving Berlin just as isolated as he was when he arrived.

That is a genuine concern for those of us who want Britain to be a strong, and indeed leading, voice in trying to find a way forward.

2.14pm: Reuters is focusing on the different ways that Cameron and Merkel are approaching the crisis:


The leaders of Germany and Britain sent out conflicting signals on Friday about how to solve the euro zone's debt crisis and admitted they had failed to narrow differences over the introduction of a financial transaction tax in Europe.

At a news conference in Berlin, British Prime Minister David Cameron and German Chancellor Angela Merkel tried to paper over divergent views on European policy that have sparked a war of words between politicians and media in both countries.

But they could not mask differences over how the single currency bloc's debt crisis should be handled, with Cameron calling for "decisive action" to stabilise the euro zone and Merkel making clear she favoured a "step-by-step" approach.


1.31pm: With the press conference now over, what have we learned?

Angela Merkel and David Cameron were both keen to present a united front, stressing that the two countries share a strong friendship, and agree about many crucial issues. The agreement that next year's EU budget should be pegged to the rate of inflation will cheer many.

It's not a surprised that the two leaders didn't make progress on a financial transaction tax - as there is such a gulf between their two positions.

The most important quote is probably Merkel's warning that Europe "mustn't pretend to have powers we don't have."

That suggests that Cameron's demands for Europe to throw everything it's got at the crisis -- the Big Bazooka -- may not be heeded. [it also reminds us of Jean-Claude Juncker's suggestion this morning that the UK should stop telling the eurozone what to do]

1.16pm: Merkel finished by modestly saying that her English is "limited" and that she needs to improve her Russian and French. But that's OK, because:

We all speak in the language of Europe.


Angela Merkel and David Cameron joint conference in Berlin Photograph: Sky news
1.15pm: Merkel stressed that "The UK and Germany need each other" and paid tribute to Britain's achievements.

Britain has always been an engine and driver of more competitiveness [through the Doha round.]

However, she did then question whether Cameron's call for everything possible to be done to address the crisis was completely credible:

Here's the key quote from Merkel (via Reuters):


The British demand that we use a large amount of firepower to win back credibility for the euro zone is right. But we have to take care that we don't pretend to have powers we don't have. Because the markets will figure out very quickly that this won't work.

1.13pm: Where is the Big Bazooka that the prime minister called for last month, asks Matt Frei of Channel 4 News. And what does Cameron think about some of the recent German media coverage?

Cameron starts by saying that his German isn't too hot, and promptly proves it by getting the German for Bazooka wrong* (they won't like that in the Eton Language department).

Unfazed, Cameron tells the conference that Britain remains firmly committed to the European Union -- after all, "Britain helped create it".

Another question -- what does he think EU should be doing to fix the crisis?

Cameron replies that the long-term solution must involve "proper rules on fiscal discipline", and that all the eurozone's institutions need to defend the euro.

* - he referred to a "Superwaffe" while a better term is "Panzerfaust", or even better would be "das große Geschütz"

1.12pm: Merkel and Cameron said they agreed that a global financial transaction tax would be a good thing.

Merkel added: "But just a European one - we did not make any progress on that one."

Cameron reiterates that UK position - that if an FTT isn't truly global, the government won't accept it.

1.07pm: The first question (from Sky News): How can Merkel and Cameron talk about strong friendship when there is such dispute over certain issues?

Cameron says that the two countries agree about a lot - starting with the need for a solid European economy, one that is "strong, efficient, that deals with its debts".

1.03pm: Now David Cameron speaks, saying that the talks have been positive. He also refers to the strong bonds of friendship between the two countries (after several days of tit-for-tat rowing over the financial transaction tax)

The prime minister says that "it is obvious that we don't agree on everything" but it's important that Germany and Britain "talk and reach agreements".

Cameron says that he and Merkel agreed that the EU budget for 2012 needs to be pegged to the EU inflation rate, rather than accepting the EU parliament's demand for an inflation-busting rise [Merkel also expressed support for this position].

Broadly speaking, he says, "Germany has her interests, and so does Britain....we have agreed to work together and achieve our joint interests".

Cameron also says that European leaders must deliver on the promises made in Brussels last month.


1.01pm: Merkel goes on to explain that Europe needs to stop breaking the growth and stability pact (having violated it "60 times"). She paints a picture of an amicable meeting with Cameron, saying:

We share a strong bond of friendship.

12.58pm: The press conference is just starting now.

Angela Merkel goes first, explaining that Europe must focus on "creating jobs", being "innovative and creative".

Europe must...takes its potential and uses it to find a strong position in the global economy.

Merkel said that there is a clear difference between Germany and Great Britain -- only one country is in the single currency -- but "we share a single market in Europe and we want it to be successful."

12.49pm: The press conference between Angela Merkel and David Cameron is about to start -- if you're near a TV in the UK you can watch it on Sky....

12.13pm: In the reader comments, ZenonP rails against the "utterly false and misleading" image at the top of the blog. And in the spirit of Crowd Sourcing/Open News/Web 2.0/'Anything you can do' he has kindly designed an alternative.

Posted in: eurozone crisis