George Osborne has warned that the richest Euro zone members will have to offer support to the weaker and indebted nations or else the currency union collapses.
In his report that was published in the Sunday Times, the Chancellor noted that if the wealthier nations in the Euro zone do not support the weaker ones then the union is likely going to collapse.
European economy, eurozone, Euro, Currency trading, currency news, forex news
Mr. Osborne also warned that the UK economy faces enormous risks if the current crisis continues.
He also noted that the British government has been busy coming up with contingency plans to tackle any eventualities as a result of the crisis.
Osborne also supported the idea of austerity plans the weak countries but also raised the idea of single Euro zone bonds and additional intervention from the European Central Bank in an attempt to counter the crisis.
Osborne went on to urge the countries facing deficit problems to face their difficulties head on adding that in case there are no supple exchange rates, the financial and political obstacles to handle the crisis will only deteriorate without help from the center of the currency union.
He also noted that the union should pursue the idea he had described last year as the remorseless logic of financial union toward greater fiscal integration and problem sharing. He said that he just stated the Eurobonds as one of the possible mechanisms.
The current French president Francois Hollande also promised to propose for Eurobonds at the next European meeting, as he puts forward his ideas regarding economic growth and support for ailing economies in the union.
Mr. Osborne was also quick to note that Europe has to be extra competitive by reforming the welfare and labor market, especially the creation of more job-friendly employment legislations, better education and low business taxes.
The Chancellor was also against calls for Britain to lower its austerity measures.
Britain is likely to face serious turmoil if it fails to make a clear distinction between a real deficit reduction policy and development plans.
German’s financial minister was today categorical about need for Greece to stick to the austerity plan made a few months ago along with its second international rescue.
He also told the press that European unity should not be seen as a one way street adding that it is very hard for one state to survive without the other. He also noted that it is possible to avoid Greek fallout from the Euro.