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Eurozone Crisis: Merkel Says UK 'Still An Important Partner' Despite Veto (Live Blog)

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Angela Merkel said today that the UK is still an important part of the EU, despite its veto over treaty change
Angela Merkel said today that the UK is still an important part of the EU, despite its veto over treaty change

Angela Merkel said the UK remains a key partner in the European Union, despite her "regrets" that David Cameron to pulled out of crisis talks over the eurozone last Friday.

Speaking in the Bundestag, the German chancellor said it was regrettable that Britain was not part of the process, agreed in frantic talks last week, that pledged to create enforceable fiscal rules within the eurozone and to move towards greater economic integration.

But she added: "I have no doubt that in the future Britain will also be an important partner in the European Union.

"Britain is not only an important partner in foreign and security affairs. Britain is a partner in many other areas - in competitiveness, in the internal market, in trade, in [fighting] climate change."

Britain was the only country out of the 27 EU member states not to back the new treaty, leading to many in Europe and at home forecasting that it would be left isolated.

The chancellor's olive branch comes at a point when the cracks in the EU plan are starting to show, with protests in Poland highlighting that the implementation of the treaty may take longer than the three-to-six months that European leaders anticipated.

The prime minister had to deny in parliamentary questions today that the UK would still be drawn into assisting with the EU bailout plan by the back door. Friday's agreement included a proposal to lend €200bn to the International Monetary Fund (IMF). According to the IMF's in-house publication, €150bn of that would come from eurozone members, with €50bn sourced from the rest of the EU.

The UK papers this morning seized on this as evidence that the opt-out had achieved little, and that the government was still heavily exposed to the eurozone's woes.

The European markets took a battering on Wednesday, with the German DAX and French CAC-40 falling 1.66% and 3.21%, respectively, as the close approached, as hopes faded that the European Central Bank (ECB) would be given a license to expand its bond buying programme. The FTSE-100 was down nearly 2.1%.

Merkel and the president of the Bundesbank, Jens Weidmann, reiterated their resistance to using the bank's unlimited liquidity, either to intervene directly or to lend money to the IMF.

Some in the market are saying that €1tr - provided through a combination of the ECB, the IMF and the European Financial Stability Facility - a eurozone bailout mechanism - will be needed to satisfy investors that Italy, Spain and peripheral countries can be supported enough to ensure that they do not default.

 
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