10/06/2012 04:58 BST | Updated 10/06/2012 05:48 BST

George Osborne: UK's Economic Recovery 'Killed Off' By Eurozone Crisis

Britain's economic recovery is being "killed off" by the crisis in the eurozone, chancellor George Osborne has warned.

In an aptly timed letter to The Sunday Telegraph, Mr Osborne issued a stark warning to the leaders of the 17-nation single currency bloc.

He described the current crisis as a "moment of truth" and called on eurozone leaders to take action to end the instability.

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George Osborne describes eurozone turmoil as "the crisis on our doorstep." He has argued it is this that is killing off the UK's economic recovery

In some of his most strongly worded comments to date, Osborne voiced his exasperation at the repeated failure of the eurozone nations to find a permanent solution to the financial turmoil.

"Our recovery - already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years - is being killed off by the crisis on our doorstep," he says.

"I know from talking to British businesses that our country is bursting with entrepreneurial spirit and exciting investment plans that are being held back because of uncertainty about the future.

"That's why a resolution of the eurozone crisis would do more than anything else to give our economy a boost."

However shadow chancellor Ed Balls said Mr Osborne could not blame the problems in the eurozone for his mistakes in handling the economy.

"It's deeply complacent and out of touch for George Osborne to blame Europe for a double-dip recession made in Downing Street. He will fool nobody with these increasingly desperate excuses," he said.

"Despite the eurozone crisis, Germany, France and the euro area as a whole have so far avoided recession while Britain's recovery was choked off in the autumn of 2010.

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Shadow chancellor Ed Balls has lambasted Osborne, claiming he is shirking his own responsibilty

Revised figures published in May showed that the UK's double-dip recession was deeper than originally feared.

Gross domestic product (GDP) shrank by 0.3% between January and March, the Office for National Statistics (ONS) said, down from an initial estimate of 0.2%.

The news put pressure on chancellor George Osborne, the results published a week after the head of the International Monetary Fund (IMF) said he should consider a new approach to the economy with an increased focus on public investment.

Osborne's call on the eurozone to do more comes as it was announced that Spain's banks were to receive up to 100 bn euro of EU funds to shore up their floundering financial sector.

Eurogroup has welcomed the move, saying that the loans will improve confidence in the economy. However Osborne said that the current measures would not be enough to end the threat to the UK.

Washington said the loan to Spain was a vital step towards the "financial union" of the eurozone.

However Osborne argues that Spain's troubled banking sector is only the "latest symptom" of the eurozone crisis, saying: "The lesson of the last two years is that treating the latest symptom does not cure the underlying conditions."

With the prospect of further turmoil in the wake of the of the forthcoming re-run of the Greek elections, Osborne's desperate diagnosis of economic conditions across the eurozone capitalises on the fear felt across the Europe

"We urgently need a change of course and a plan for jobs and growth, here in Britain and in the eurozone, if we're to get people back to work and get deficits down. If we fail to act now, we will pay a very heavy long term price."