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News Analysis: Cameron vs. Merkel, conflicting ideas for eurozone at Davos
Last Updated(Beijing Time):2012-01-27 07:18

David Cameron, the British prime minister who distanced himself from the rest of EU leaders at the latest summit, struck an unwelcome tone on euro at Davos on Thursday, only one day after his German counterpart spoke to boost spirit on the currency union at the same forum.

"We need to be honest about the long-term consequence of a single currency," he said before a brief event on the six-month count-down on the London Olympics this summer.

Cameron pointed out "a number of features that are common to all successful currency unions." According to the prime minister, the common features of the U.S. dollar and British Pound entail a central bank that can comprehensively stand behind the currency.

It also requires the deepest possible economic integration with the flexibility to deal with economic shocks, and collective debt issuances that can deal with tensions and imbalances between different countries and regions in the union.

"Currently, it's not the eurozone that doesn't have all of these, it doesn't really have any of these," he noted.

The remark formed sharp contrast to the somber but forceful speech by German Chancellor Angela Merkel, who pronounced a resounding "Yes" to a self-proposed question "do we dare more Europe?"

Looked to by many as the savior of the euro, Germany is not only the biggest bailout fund provider, but also a major coordinator of the crisis relief efforts.

Merkel was widely expected to dominate headlines at the beginning of the week-long World Economic Forum (WEF), and the WEF founder Schwab used terms of a "tower of strength" and navigator of the European ship before giving floor to his distinguished guest at the opening event.

Many had hoped Merkel would make pledges that would boost spirit on the euro, something that might include the injection of as much as half a trillion euros (657.3 billion U.S. dollars) into the bailout fund.

However, with Greece faltering on deadlocked talks with private creditors, some begin to slap the "unreadiness" of Germany in work with full strength to solve the problem.

Among the fiercest criticizers, one found George Soros, who said on Wednesday in Davos that he doubted if Germany was deliberately "prolonging the crisis atmosphere" in order to maintain the pressure on countries with unhealthy fiscal conditions.

Soros used "dictator" to describe Germany's role in setting the European policy, adding that at times of crisis, the creditors are in the driver's seat.

Apart from an utter denial of the European single currency, Cameron also denounced the proposals for a financial transaction tax.

The tax could reduce the EU's GDP by 200 billion euros (262.9 billion dollars), cost 500,000 jobs and force some 90 percent of the market away from the EU, he said.

The speeches by both leaders were extensively watched by twitterers. A participant identifying himself as Faisal Islam hailed the "pretty radical economic speech" from Cameron.

It "poked in the eye" at Germany over eurobonds and diagnosed the euro weaknesses, he said.

"It would appear that Cameron is getting more impatient with eurozone leaders," said another twitterer called Tim Montgomerie.

Faced with heightened pressure, Merkel appealed for patience, saying that Europe is serious about opening up its labor market and taking other steps to improve growth.

What's interesting is that she cited democracy as the reason behind dragging decisions and measures to counter the crisis.

Because it is a democracy, progress may be slow. "Please take the long, drawn-out practices with a degree of patience," said Merkel.

Source:Xinhua 
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