Eurozone crisis 'killing' British recovery: finance minister

10th June 2012, Comments 0 comments

Britain's economic recovery is being "killed off" by the crisis in the eurozone, its finance minister George Osborne has said.

Writing in the Sunday Telegraph newspaper, Osborne pleaded for a solution to the turmoil in the 17-member eurozone -- of which Britain is not a member -- to boost the struggling British recovery.

"Our recovery -- already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years -- is being killed off by the crisis on our doorstep," he wrote.

"A resolution of the eurozone crisis would do more than anything else to give our economy a boost."

The British economy, the seventh largest in the world, slipped back into recession at the end of last year, but Prime Minister David Cameron has stood by tough austerity measures, albeit at a slower pace than before.

As Spain secured a European lifeline of up to 100 billion euros ($125 billion) to save its stricken banks, Osborne wrote: "The lesson of the last two years is that treating the latest symptom does not cure the underlying condition."

Spain secured the deal from eurozone finance ministers after an emergency video conference lasting more than two hours.

The deal -- hailed by European economic powerhouse Germany and the United States as well as the IMF -- was a dramatic climbdown for Spain, where successive governments have hotly denied any need for outside aid.

Osborne, whose official title is the Chancellor of the Exchequer, said the eurozone was approaching a "moment of truth" which could determine Europe's economic future for more than a decade.

He urged greater fiscal integration in the eurozone, but stressed that further pooling of sovereignty should be limited to countries using the single currency.

Any further transfers of power from London to Brussels will require a referendum, he wrote, in a move that will placate the "eurosceptic" wing of his Conservative party.

"Any politician proposing to give up more power over our own affairs in any new treaty will have to put that choice to the people," he wrote.


© 2012 AFP

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