Germany hits out at UK over fiscal agreement

DAVOS

A demonstrator stages a protest in the street of Davos during the 42nd Annual Meeting of the World Economic Forum in Davos, Switzerland, yesterday. AP photo

German Finance Minister Wolfgang Schaeuble took a jab at Britain’s Prime Minister David Cameron on Jan. 27, blaming him for Europe’s failure to agree a common debt-reduction treaty.

Cameron has refused to take Britain into a proposed EU fiscal pact, which would see member states agreeing to common deficit reduction targets, forcing other states to draw up an agreement outside the Union’s treaty structure.

Challenged at the World Economic Forum in Davos by Swedish Euro-MP Anna Maria Corazza Bildt over this approach, Schaeuble said, “I would like to give you the mobile number of David Cameron.” As laughter erupted, “Of course, this is not a joke,” he continued.

“It would be much more better and better to understand for everyone outside of Europe, if we were to do what we will now have to do in our fiscal compact in the framework of European treaties. “But that has to be done by unanimous decision, that is the basis of European treaties. Therefore, for the meantime, we go for 17 plus, I hope, nine. Everyone is invited to join,” he said.

Following Cameron’s refusal to take part, Germany and France pushed for the 17 nations of the eurozone single currency bloc to take part and they hope that nine more non-eurozone members will join them.

Cameron has been unrepentant, coming to Davos on Jan. 26 to berate his EU allies for failing to promote growth and for seeking to introduce a financial transaction tax he regards as sheer “madness”.

European leaders will meet on Jan. 29 hoping to turn the page on the sovereign debt crisis that has undermined the euro and threatened the bloc’s weakest members with financial collapse.

Geithner: US ready
U.S. Treasury Secretary Timothy Geithner, meanwhile, signaled the United States is ready to go along with an increase the IMF’s ability to loan to Europe if Brussels boosts its own rescue kitty first.

“The only way Europe is going to be successful ... is for them to build a stronger firewall,” Geithner told the meeting of the world’s business and political elite on Jan. 27 at Davos.

“That is going to require a bigger commitment to resources, the Europeans recognize that and it’s an unfinished piece of the framework for the moment that and they have to fix that.

Earlier this month, Washington insisted that it would not help boost the IMF’s war chest, after the lender’s director Christine Lagarde said she would need an additional $500 billion to protect against Europe’s financial crisis.