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Eurozone crisis to dominate Cameron talks with Merkel Eurozone crisis to dominate Cameron talks with Merkel
(40 minutes later)
  
UK PM David Cameron is to hold talks with German Chancellor Angela Merkel to try to resolve tensions over the eurozone crisis.UK PM David Cameron is to hold talks with German Chancellor Angela Merkel to try to resolve tensions over the eurozone crisis.
They have both been pressing for action to stabilise the euro, as Italy and Greece implement austerity measures.They have both been pressing for action to stabilise the euro, as Italy and Greece implement austerity measures.
Germany is pressing for closer eurozone integration - but the UK says there must be safeguards for EU states which do not use the single currency.Germany is pressing for closer eurozone integration - but the UK says there must be safeguards for EU states which do not use the single currency.
And the UK is resisting calls for a financial transactions tax. And the UK is resisting calls for a financial transactions tax in the EU.
BBC Europe editor Gavin Hewitt said Mr Cameron would arrive in Berlin at a time when some of Chancellor Merkel's MPs have criticised Britain for not supporting Europe in its hour of need. 'Two-speed Europe'
Mr Cameron first met European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso in Brussels on Friday before flying to Berlin.
BBC Europe editor Gavin Hewitt said Mr Cameron would arrive in Germany at a time when some of Chancellor Merkel's MPs had criticised Britain for not supporting Europe in its hour of need.
She has admitted there are tensions between them, but despite their differences, both sides are keen to say there is no rift.She has admitted there are tensions between them, but despite their differences, both sides are keen to say there is no rift.
Mrs Merkel wants the eurozone to be much more closely integrated, while David Cameron is not prepared to see British influence decline in a "two-speed Europe", our correspondent added.Mrs Merkel wants the eurozone to be much more closely integrated, while David Cameron is not prepared to see British influence decline in a "two-speed Europe", our correspondent added.
Mr Cameron also wants the European Central Bank to be allowed to bail out struggling countries - something Germany is resisting. Mr Cameron also wants the European Central Bank to be allowed to bail out struggling countries - something Mrs Merkel is resisting.
Overshadowing the meeting is likely to be the fear the debt crisis is spreading, in recent days core countries like France have joined Spain and Italy in seeing their borrowing costs rise. Michael Fuchs, of Mrs Merkel's governing party the CDU, told BBC Radio 4's Today programme the German chancellor was right to do so - and it was important to first get indebted countries which spent too much to "do their homework".
"Who is the one backing up the ECB most? It is Germany. We already do almost 30% of the ECB so you can understand that the Germans are a little bit reluctant to spend even more."
Sovereignty issueSovereignty issue
Mrs Merkel's governing party, the CDU, wants href="/1/hi/world/europe/6901353.stm" title="Q&A: The Lisbon Treaty" >the EU's Lisbon Treaty to be amended to sanction a move towards closer fiscal union within the eurozone and says negotiations should begin at once. Overshadowing the meeting is likely to be the fear the debt crisis is spreading; in recent days core countries such as France have joined Spain and Italy in seeing their borrowing costs rise.
Mrs Merkel's CDU wants the EU's Lisbon Treaty to be amended to sanction a move towards closer fiscal union within the eurozone and says negotiations should begin at once.
Senior CDU figures have suggested that if all 27 EU countries cannot agree, the change should be approved by those countries which use the single currency - of which the UK is not a member.Senior CDU figures have suggested that if all 27 EU countries cannot agree, the change should be approved by those countries which use the single currency - of which the UK is not a member.
Speaking earlier this week, Mrs Merkel said the EU needed more powers to ensure budget discipline among member states and Germany was willing to give up sovereignty in some areas to facilitate this.Speaking earlier this week, Mrs Merkel said the EU needed more powers to ensure budget discipline among member states and Germany was willing to give up sovereignty in some areas to facilitate this.
Meanwhile Mr Cameron is pushing for the UK to take powers back from Brussels in pursuit of what he says is his goal of a more flexible and diverse Europe.Meanwhile Mr Cameron is pushing for the UK to take powers back from Brussels in pursuit of what he says is his goal of a more flexible and diverse Europe.
The UK supports greater fiscal integration among eurozone countries as part of efforts to tackle the debt crisis.The UK supports greater fiscal integration among eurozone countries as part of efforts to tackle the debt crisis.
But the government has said it wants safeguards, so those outside the single currency area will not be disadvantaged in terms of access to the single market and regulations on key sectors like finance.But the government has said it wants safeguards, so those outside the single currency area will not be disadvantaged in terms of access to the single market and regulations on key sectors like finance.
There are concerns Germany is determined to push ahead with a tax on financial transactions, known as the Tobin or Robin Hood Tax, in an effort to regulate the markets.There are concerns Germany is determined to push ahead with a tax on financial transactions, known as the Tobin or Robin Hood Tax, in an effort to regulate the markets.
'Economic suicide''Economic suicide'
The idea, also backed by French President Nicolas Sarkozy, has caused alarm in the UK amid concerns that the US, China and other major economies may not come on board and the City of London would be seriously damaged if the tax only applied across Europe. The idea, also backed by French President Nicolas Sarkozy, has caused alarm in the UK amid concerns that the US, China and other major economies may not come on board and the City of London would be seriously damaged if the tax applied only across Europe.
British ministers reacted angrily to recent remarks by a senior member of Mrs Merkel's party, Volker Kauder, who suggested the UK may need to make concessions on the issue of the tax and must show more collective responsibility in Europe. An EU-wide financial transactions tax would require the backing of all EU leaders - but Germany and France are considering going ahead with one just within the eurozone, if necessary.
Chancellor George Osborne said a Europe-only tax would be "economic suicide" while Business Secretary Vince Cable said the UK would not "fall for" such an idea, which he said had nothing to do with the urgent problems facing Europe on productivity and employment. British ministers reacted angrily to recent remarks by a senior member of Mrs Merkel's party, Volker Kauder, who suggested the UK might need to make concessions on the issue of the tax and must show more collective responsibility in Europe.
Chancellor of the Exchequer George Osborne said a Europe-only tax would be "economic suicide" while Business Secretary Vince Cable said the UK would not "fall for" such an idea, which he said had nothing to do with the urgent problems facing Europe on productivity and employment.
Ahead of Friday's meeting, Labour's Chris Bryant - a former Europe minister - said the coalition was "not managing to get its argument across" and was instead making "injudicious" comments about other countries' economies.Ahead of Friday's meeting, Labour's Chris Bryant - a former Europe minister - said the coalition was "not managing to get its argument across" and was instead making "injudicious" comments about other countries' economies.
"I think we should have been doing much more to bind together a caucus of Britain, France, Germany to provide much more leadership on this issue," he told BBC One's Question Time."I think we should have been doing much more to bind together a caucus of Britain, France, Germany to provide much more leadership on this issue," he told BBC One's Question Time.