Eurozone Collapsing!

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Tory prime minister Cameron’s decision to veto an EU-wide treaty change over eurozone financial rules was ‘largely political’, Business Secretary Vince Cable said yesterday.

He told the Andrew Marr show that Cameron had ‘got a short-term boost from it, but it doesn’t actually deal with the big long-term problems in Europe’.

Asked if he had thought about quitting in the wake of the EU veto, Cable said ‘No’, before adding: ‘I frequently wonder about my position in government because we’re all making difficult decisions.

‘But when I reflect on it as I do, I realise that what we’re committed to is actually making this government work; we’ve got to deal with the very serious problems in the economy.’

Appearing on the same programme, London Mayor Boris Johnson backed the veto and warned against ‘hysterical attempts to bubblegum’ the eurozone together.

Predicting Greece would leave the eurozone within a year, he added: ‘I would be amazed if we were all sitting here next year and the euro had not undergone some sort of change.

‘I think it highly likely that there will be a realignment in the sense that some countries will fall out. . . and we all know who the likely candidates are.’

Elsewhere, Andrew Tyrie, chairman of the House of Commons Treasury committee, warned: ‘Few people believe that Greece can remain solvent within the eurozone. Should Greece have to leave, the recapitalisation of a number of continental banks would be necessary.’

Earlier, Cameron had sought to stress that his top priority was for the eurozone to survive the crisis because the consequences of a disorderly break-up would be devastating for European economies.

Meanwhile, Liberal Democrat deputy prime minister, Nick Clegg said that there was a clear understanding across government that it was in the UK’s interests for the euro to survive, saying that three million British jobs depended on EU membership.

He said: ‘I read and hear a lot of people breezily predicting, almost with a sense of glee, that the eurozone is going to fall apart and this country is going to drop out of the EU.

‘My crystal ball is no clearer than anybody else’s, what I do know is that no-one should lightly wish for that outcome.

‘We need to try to move from a phase of uncertainty to a phase of greater stability and I don’t think witnessing the break-up of the currency bloc on our backyard would do us any good at all.’

Former Labour cabinet minister and former European Commissioner, Lord Mandelson, said that the proposed EU treaty change had not posed any ‘threat to Britain whatsoever’.

He said the UK veto was ‘whipping up a bit of storm, a bit of red meat to throw to Mr Cameron’s anti-European backbenchers’.

Following Friday’s warning by the Fitch ratings agency (see page 2) the Standard & Poor’s agency, was rumoured to be about to cut France’s rating within days.

Fitch added over the weekend that it could cut Belgium’s credit rating, along with those of Spain, Italy, Slovenia, Cyprus and Ireland.