Don't Take Your eye off the Eurozone Crisis

30/07/2011 15:19 BST | Updated 29/09/2011 10:12 BST

As the British media continues to churn out story after story on the hacking scandal, the troubles in the Eurozone continue to mount. Like a set of dominoes, one by one countries are falling into deeper and deeper financial trouble. This week, the Cypriot Cabinet resigned over concerns that the island state would be next to go, following the patterns of Greece, Ireland, Portugal and potentially Spain and Italy.

The sudden burst of morality that has taken hold of the UK means that this crisis - arguably a more concerning and long-term one - has been pushed out of the spotlight. This is dangerous for politicians of all colours. Whist the hacking scandal should be given coverage, the way in which is has pushed all other news off our screens is disproportionate. In the same way, the US debt crisis is indeed important, and a US default would no doubt have an effect on the British economy. But we forget the impending Euro crisis at our peril.

The long-standing glue that holds the Eurozone together, Germany, is beginning to lose its will to do so. German taxpayers are beginning to question the benefit of them bailing out and supporting countries such as Greece and Ireland. At present, they have begrudgingly done so. If bigger economies collapse however - with Italy, Europe's third biggest economy, looking increasingly like it will - the Germans may not have the stomach for a rescue.

It is a catch-22 situation, because if these countries are not bailed out they will drag the Eurozone down with them. However, by bailing them out, other European countries are embroiling themselves in this whirlwind crisis.

Britain finds itself in a bizarre position in this crisis. Whilst not directly in the Eurozone per se, the import/export value of the EU is extremely valuable to Britain and, as David Cameron has said multiple times, keeping European countries afloat is in Britain's interest. Were there to be a serious collapse in the Eurozone, Britain would feel it, even though she is not directly linked.

This is a message that the Government must keep plugging and keep reminding the public of. The hacking scandal may be more appealing to the media, but the Eurozone crisis is more pressing. It also brings up a whole host of questions, the most urgent of which is whether Britain should remain in the EU at all. David Cameron seems reluctant to leave, his reasoning being the trade benefits mentioned above. Another reason for his reticence is that to abandon Europe now, whilst the continent is in crisis, would have a damaging impact on Britain's relations. Eurozone countries would be reluctant to trade freely with a country that effectively left them to sink.

On the other side of the coin, the Prime Minister is right to not involve Britain too much in the situation. The further sucked in Britain gets, the harder it is to get out. As the Germans are finding, the European ideal is not all it was built up to be. Britain has a valuable position on the outside, able to offer advice and assistance as and when without getting implicated beyond its means.

The Government must keep an extremely careful eye on Europe. Hacking and the US are bound to take up media space, but the Government must focus on the Eurozone. In such a fast-moving situation, taking an eye off the ball could be disastrous. For the benefits of our European neighbours and ourselves, the Eurozone crisis must be the Prime Minister's priority.