July 20, 2011
Deeper fiscal co-ordination among eurozone members is the only way to avert a "calamitous debt crisis", Ed Balls said on Wednesday as he accused chancellor George Osborne of a "failure of leadership" before a crunch Brussels summit.
Balls, Labour's shadow treasury spokesman, warned that the UK government's hands-off stance on Europe meant one of the top three economies in the EU was in effect abdicating responsibility for resolving a crisis that could engulf the British economy.
He backed the creation of eurobonds to fund a bailout package that would also involve eurozone countries agreeing greater co-ordination and guarantees to protect member states' debt mountains.
He urged the prime minister, David Cameron, and Osborne to join leaders in Brussels to hammer out a deal. "There isn't any possibility of getting through this crisis without at least a temporary eurozone-wide guarantee based on government-issued debt from countries at risk from contagion. Without that support the markets are going to continue to lose confidence. We need to face up to today's problems. When you see Italian and Spanish bond spreads you can see the situation is incredibly dangerous," he said.
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