G20 Branded 'A Failure' With Greek Crisis Showing No Sign Of Ending
The G20 Summit in Cannes has largely been branded a failure by political pundits, with David Cameron warning the continued uncertainty surrounding the bailouts for Greece and the wider Eurozone risks damaging the British economy.
UK ministers have used interviews to warn growth is likely to remain sluggish following the breakup of talks in France. A communique issued by the heads of government following the talks describes the G20 summit as "successful", but the claim was almost immediately rubbished by Britain's prime minister, who warned the problems within the Eurozone hadn't been fixed.
David Cameron told reporters: "This is having a chilling effect on our economy. Every day that it goes on unresolved is a day that’s not good for our economic prospects."
The only political relief for Cameron is he now has a good explanation when the growth figures for the final quarter of 2011 come in. Most analysts predict that the modest gains seen over the summer will be wiped out. Expect the narrative now coming from Downing Street of the Eurozone crisis providing a "chilling effect" on the UK economy to be expanded.
The heads of government hoped the Greek political crisis would have moved towards a resolution last night but instead prime minister George Papandreou survived a confidence motion at the parliament in Athens. He has suggested he could now become the head of a government of national unity, but the fractious nature of Greek politics makes this unlikely. The main opposition party says they won't enter into government with him, prompting speculation that Papandreou will have to resign anyway in the next few days.
Although the UK has signalled it is ready to increase its IMF contributions, how much those payments might be - and where that money might be needed - remains unclear. The Italian government has been told the IMF will be monitoring its austerity agenda closely, amid fears Italy could be the first major European economy to come under the kind of pressure that has afflicted Ireland, Portugal and Greece.
One British official told The Guardian of their frustration: "We cannot have the Italians meeting in crisis every three days. We need some action."
David Cameron has confirmed that any rise in British IMF contributions won't require a Commons vote because the money will fall within potential funds already agreed on in June - that vote saw a significant Tory rebellion, although by no means as large as the one seen a fortnight ago on the EU referendum motion.
But many Tories are disturbed by the idea of Britain putting more money into the IMF. Tory 1922 Committee Secretary Mark Pritchard told HuffPost UK yesterday that the limited measures agreed at the G20 amounted to "a back-door bailout in all but name."
In an interview with The Daily Telegraph employment minister Chris Grayling signalled support for the Euro rebel Tory MPs, saying, "I understand where our colleagues were coming from,” and suggested that whatever happens within the Eurozone will require "significant renegotiation" of Britain's place within the EU.