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Eurozone crisis to dominate Cameron talks with Merkel Eurozone crisis: Cameron and Merkel stress friendship
(about 2 hours later)
  
UK PM David Cameron is to hold talks with German Chancellor Angela Merkel to try to resolve tensions over the eurozone crisis. David Cameron and German Chancellor Angela Merkel have acknowledged differences but stressed they have the "same plan" for European growth.
They have both been pressing for action to stabilise the euro, as Italy and Greece implement austerity measures. The two leaders met in Berlin to discuss the eurozone crisis and other issues, including sanctions on Iran.
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. Mrs Merkel said they did "not make progress" on plans for a European financial transactions tax.
And the UK is resisting calls for a financial transactions tax in the EU. But Mr Cameron, who argues any such tax must be global, said they were "good friends" who wanted Europe to succeed.
'Two-speed Europe' 'Good relationship'
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. The meeting came amid continuing tensions between the two countries over issues like the transactions tax.
But both leaders stressed their "good relationship" and went through areas of agreement - including the need for European countries to tackle their debts and deficits, the importance of the single market, and the need for action to resolve the eurozone debt crisis.
Mrs Merkel acknowledged that no progress was made on Germany and France's calls for a European financial transaction tax.
Mr Cameron stressed a global tax was a good idea, but is concerned one that does not involve other major global financial centres would penalise the City of London.
"It is obvious that we don't agree on every aspect of European policy, but I am clear that we can address and accommodate and deal with those differences," he said.
"It's a good relationship. We have strong agreement on key issues about action the European economy needs to take."
'Two speed Europe'
Mr Cameron met European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso in Brussels on Friday before flying to Berlin.
In a statement, they said Mr Barroso and the PM had "agreed on the importance of prioritising the decisive action needed to ensure the stability of the euro area, as well as fast-tracking measures to stimulate growth and jobs".In a statement, they said Mr Barroso and the PM had "agreed on the importance of prioritising the decisive action needed to ensure the stability of the euro area, as well as fast-tracking measures to stimulate growth and jobs".
It also stressed the "central importance of further developing the single market to deliver its full growth potential" - a key issue for the UK, should eurozone countries choose to integrate further.It also stressed the "central importance of further developing the single market to deliver its full growth potential" - a key issue for the UK, should eurozone countries choose to integrate further.
BBC Europe editor Gavin Hewitt said some of Chancellor Merkel's MPs had criticised Britain for not supporting Europe in its hour of need.BBC Europe editor Gavin Hewitt said 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. Mrs Merkel wants the eurozone to be much more closely integrated, while Mr 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 Mrs Merkel is resisting.Mr Cameron also wants the European Central Bank to be allowed to bail out struggling countries - something Mrs Merkel is resisting.
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". Overshadowing the meeting is 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.
"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 issue
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.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.
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.
'Economic suicide''Economic suicide'
At the press conference, Mrs Merkel called for "limited treaty change" in the eurozone - Mr Cameron said they had had a "discussion" on the issue adding: "Germany has her interests and so does Britain."
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 that 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.
The idea, also backed by French President Nicolas Sarkozy, has caused concern in the UK that the City of London would be seriously damaged if the tax applied only across 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.
A senior member of Mrs Merkel's party, Volker Kauder, has suggested the UK might need to make concessions on the issue of the tax and must show more collective responsibility in Europe.A senior member of Mrs Merkel's party, Volker Kauder, has 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 has said it would amount to a "tax on Britain" - the UK has said such a move must apply equally to all global financial centres.Chancellor of the Exchequer George Osborne said a Europe-only tax would be "economic suicide" while Business Secretary Vince Cable has said it would amount to a "tax on Britain" - the UK has said such a move must apply equally to all global financial centres.
Labour's Chris Bryant - a former Europe minister - said the coalition was "not managing to get its argument across".Labour's Chris Bryant - a former Europe minister - said the coalition was "not managing to get its argument across".
"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.