Cameron due in Berlin for Merkel talks on European crisis

21st May 2010, Comments 0 comments

New British leader David Cameron was paying his first official visit to Germany Friday for talks with Chancellor Angela Merkel amid a drive to heal deep EU rifts over the fiscal and financial market rulebook.

The prime minister accorded his second foreign trip since taking office last week to Berlin, after talks in Paris Thursday with President Nicolas Sarkozy.

Merkel was due to welcome him with military honours ahead of a meeting at her ultra-modern chancellery and a joint press conference around 1300 GMT.

Cameron is seen as keen to dispel his eurosceptic reputation amid criticism Britain is sitting by while fellow European Union members put together a trillion-dollar emergency rescue package to protect their debt-ridden partners.

The visits to the countries that have historically been the twin engines of European integration come at a critical time, with a raging debt crisis threatening to upset global financial stability.

In Paris, Cameron admitted that he had always had "fundamental concerns about the euro" and that Britain would not join the currency, adding that as a non-member it did not expect to have to pay to support the emergency bail-out.

"But let me be absolutely clear, it is in Britain's interest that the eurozone is a success, that the euro is a successful currency, that the eurozone economies recover," he said.

"As a member of the European Union there are steps we will take together to get our economies going," he said, adding that he and Sarkozy were agreed on the need to cut EU deficits and pass new global banking reforms.

Parliament was voting Friday to approve the German share of a 750-billion-euro (938-billion-dollar) "shock and awe" emergency package of loan guarantees. Berlin is to provide up to around 150 billion euros.

Meanwhile a European economic task force was holding its first meeting in Brussels to beef up economic and budgetary surveillance in EU member states.

Merkel and Sarkozy would like to win Cameron's support for stricter EU budget controls and market regulations, and for global financial reform at a summit of the Group of 20 major economies next month.

Given the importance of the City of London to global finance, market observers say new rules without British support would be a paper tiger.

Cameron's government has already suffered its first EU defeat, losing a battle to stop a call by the 27-member bloc for new curbs on the trillion-dollar hedge fund industry made this week with the strong backing of Berlin and Paris.

After Thursday's talks, Sarkozy said it was important that Britain, Germany and France work together, and denied reports that he had fallen out with Merkel over her handling of Europe's debt crisis.

"In terms of our relations with Angela Merkel, we're doing everything to ensure that they are in harmony, that they are complementary, that they are full and that they show a common ambition," Sarkozy said.

Merkel comes to the meeting with Cameron politically weakened, having suffered a stinging setback in a pivotal state election this month and seeing her popularity plumb new depths in recent polls.

In a bid to regain control of the debate, she has pledged to lobby hard at the G20 summit in Toronto for a tax on financial markets. It is not yet clear whether she would have Cameron's support.

Beyond the financial crisis, Merkel and Cameron were expected to touch on efforts to stabilise Afghanistan and impose sanctions against Iran over its disputed nuclear programme.


© 2010 AFP

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