BRITISH taxpayers will not be asked to bail out ailing banks in Greece and Spain, David Cameron said last night as he accepted the eurozone crisis would result in greater integration among its members.
However, if the UK's relationship with Europe is to change in the months and years ahead, it remains unclear whether or not this will necessitate a referendum and on what terms.
During a visit to Berlin for talks with German Chancellor Angela Merkel, the Prime Minister stressed how he wanted the euro to succeed so that the EU could return to "healthy growth" and he acknowledged there was now "no doubt" the 17-member eurozone would move towards closer fiscal union.
Earlier, Mrs Merkel spoke of the inevitable movement towards a political union within the eurozone, which would lead to a two-speed Europe.
Declaring "we need more Europe," she added: "Whoever is in a currency union will have to move closer together. We have to be open to make it possible for everyone to participate. But we cannot stand still because some do not want to go with us."
Mr Cameron said he fully understood why the eurozone countries were looking at deeper integration such as a banking union but added: "Because we are not in the single currency, we won't take part in the profound elements of that banking union.
"I wouldn't ask British taxpayers to stand behind the Greek or Spanish deposits; it is not our currency, so that would be inappropriate to do."
The PM said the talks with the German Chancellor had been "good and positive" but there was no breakthrough in the fight to save the euro.
Earlier this week, he and US President Barack Obama tried to instil a sense of urgency among eurozone leaders by agreeing that an "immediate plan" was needed to end Europe's crisis.
Yet it now is looking likely no grand bargain will be forthcoming ahead of the Greek elections on June 17. A day later the G20 meets in Mexico and a week after that, EU leaders gather in Brussels for their regular summit.
Mr Cameron accepted that finding a comprehensive solution was not easy but pressed for action involving moves to "recapitalise the banks, build the big firewall, get growth going in Europe through structural reform and make sure there are clear and credible plans to deal with deficits".
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