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David Cameron today signalled that world leaders were ready to take action to tackle soaring oil prices.
Speaking after holding bilateral talks with President Barack Obama ahead of the main G8 meeting at Camp David, the Prime Minister said action was needed to protect world economies.
"We are addressing here the two biggest threats to all our economies and that is, of course, the eurozone crisis but also the very high oil prices that translate into high prices at the pumps," he said.
"We are making progress on both."
Mr Cameron said the summit - which brings together the leaders of Britain, the United States, Germany, France, Italy, Japan, Canada and Russia - was an opportunity for the non-eurozone nations to press the currency bloc to resolve its problems.
"Particularly on the eurozone, what is required is a sense of urgency and then clear actions for strong banks, strong deficit reduction plans, strong governance and strong contingency plans for whatever might happen," he said.
"On all those things I think there's a good sense of talks taking place and a good sense that action needs to follow.
"The G8 can't instruct the eurozone what to do but why meetings like this matter is that eurozone countries can hear from countries outside the eurozone whose economies are affected.
"It's very important these messages get across but I would say there is a growing sense of urgency that action needs to be taken, contingency plans need to be put in place and the strengthening of banks, governance, firewalls, all of those things, need to take place very fast."
Mr Cameron refused to be drawn into criticising German Chancellor Angela Merkel for blocking a rescue package for the eurozone.
However, he indicated that he would like to see the European Central Bank do more to stimulate demand.
"I think the German chancellor is absolutely right that every country needs to have in place strong plans for dealing with their deficits," he said.
"Growth and austerity aren't alternatives. You need a deficit reduction plan in order to get growth in order to have the low interest rates that we have in Britain and are vital for the future of our economy.
"But clearly, just as Britain benefits from a strong government with a strong deficit reduction plan and strong banks but also an independent monetary policy giving us low interest rates, helping to push demand in the economy, so the eurozone, I believe, needs that approach as well."
Even before official proceedings began, the event got off to a difficult start when Cameron clashed with Francois Hollande over the new French president's proposals for a Europe-wide tax on financial transactions.
The two men met for the first time following Hollande's election triumph earlier this month at the residence of the British ambassador in Washington before travelling on to Camp David.
Although the talks were described by officials as "friendly" there was no disguising the sharp difference over the issue of the financial transaction tax, which formed a key plank of Hollande's election platform.
"We are not going to get growth in Europe or in Britain by introducing a new tax that would actually hit people as well as institutions," Cameron said.
"I do not think it is a sensible measure. I will not support it."
For his part, Hollande could not resist a sly dig at Cameron's refusal to meet him when he visited London during the election campaign - a move widely interpreted as a snub to the Socialist leader.
"I couldn't meet David Cameron before the elections," he said. "I am all the happier to meet him afterwards."
The clash did not augur well for the first working session this morning to discuss the economy.
Alongside Hollande, who has called for a more growth-orientated strategy in Europe, was German chancellor Angela Merkel - the eurozone's paymaster and the arch-exponent of fiscal discipline to drive down the deficit.
The other nations taking part are Italy, Canada, Japan and Russia.
Cameron, meanwhile, had again vented his frustration at the continuing inability of the eurozone leaders to reach a resolution to the Greek debt crisis threatening stability of the whole continent.
"Decisive action is needed by the eurozone. They cannot go on kicking the can down the road," he said.
"This is in Britain's interest too because we want to have a successful growing eurozone on our doorstep and not the instability we have now."
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And after the failure of the Greek elections to deliver a clear result and with further elections looming, he said the Greek people would have to make a decision on where their future lay.
"The Greeks have to make up their mind which direction they want to go in and then Europe has to make up its mind about how to strengthen the situation and put beyond doubt the stability of the euro," he said.
Hollande insisted European leaders must consider "every possible option" for boosting growth when they meet informally next week, without adding to their deficits.
"We need to continue improving our public accounts while restoring growth. We will consider every possible option," he said.
He stressed that he hoped Greece would be able to stay in the eurozone, although like Cameron, he acknowledged that it was ultimately a matter for the Greek people.
"We would like Greece to remain in the eurozone but it is for the Greek people to answer that question," he said.
"But my response is that we should do everything to ensure they answer 'yes' to that question."
Earlier, Obama, who is pursuing his own economic stimulus package, met Hollande at the White House.
The US administration has welcomed what it has called "the evolving discussion and debate" in Europe on the "imperative for jobs and growth" since Hollande's election.
Obama said the summit would promote a "strong growth agenda".
US Treasury Secretary Timothy Geithner applauded the softer tone emerging among European leaders.
"You are seeing them talk about a better balance between growth and austerity, meaning a somewhat more gradual, softer path toward restoring fiscal sustainability," he said.
Hollande confirmed to both Obama and Cameron that he would be withdrawing French combat troops from Afghanistan this year - in line with his election promise although he said they would continue in a training role.
At the opening working dinner on Friday night, the leaders were discussing recent events in Syria, Iran, Burma and North Korea.
The working sessions today will cover energy and climate change, food security and the future of Afghanistan after the majority of international forces have left in 2015.
The head of the Office for Budget Responsibility, Robert Chote, expressed concern that Britain may never recover from a second recession caused by a deepening eurozone crisis.
"The concern is that you end up with an outcome in the eurozone that creates the same sort of structural difficulties in the financial system and in the economy that we saw in the past recession, and that has consequences both for hitting economic activity in the economy, but also its underlying potential," he told the Guardian.
Chote said he was particularly concerned about the possibility that a second deep recession would leave permanent scars. "That means not just that the economy weakens and then strengthens again - it goes into a hole and comes out - but that you go down and you never quite get back up to where you started."
David Cameron - Wikipedia, the free encyclopedia
The Conservative Party | People | David Cameron
David Cameron | Politics | The Guardian
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PA/Huffington Post UK | Posted: 19/05/2012 10:04 Updated: 19/05/2012 17:39