British finance minister 'frustrated' after eurozone talks

5th October 2011, Comments 0 comments

British Chancellor George Osborne said he was concerned by the ongoing failure to solve the eurozone crisis but that progress had been made at Tuesday's meeting of EU finance ministers in Luxembourg.

"I am not pretending that by the end of the day we had a solution to the eurozone crisis, much to my frustration," he told Sky News after returning to Britain for a Conservative Party conference.

"But I think we did take some steps forward. I think everyone now is aware of the gravity of the situation in the eurozone," he added.

Osborne earlier urged eurozone governments to make it clear to markets that the state will, if necessary, rescue banks threatened by the debt crisis.

"We need to reflect on the reality of the situation in the eurozone and account for the reality of sovereign risk, which requires more capital in some eurozone banks," the finance minister said after breaking away from lengthy EU talks.

"Obviously, it is preferable if that capital is raised privately but they have to make it clear (that) national public backstops are there if required," he stressed.

Osborne told Sky that solving the crisis would provide a vital boost to the British economy and that he had used Tuesday's talks to push for firm action over Greece's precarious situation.

"Instead of this endless speculation about whether they (Greece) will change course ... they (EU leaders) have got to make decisions and stick to them," he said.

Prime Minister David Cameron earlier warned of "some very serious clouds on the horizon," during an interview with the BBC.

"Chief amongst them are the problems in the eurozone where the French and German economy have both stalled. Dealing with the eurozone is absolutely vital," he added.

Ministers from the 27 European Union states spent most of the day talking about how to contain the spillover from the debt crisis which begun in Greece as France and Belgium said they would guarantee failing bank Dexia's commitments.

Eurozone leaders, who have once more delayed bailout funds for Greece, are worried that the banking system could be put at risk in a chain reaction if Athens defaults on its debt.

© 2011 AFP

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