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Eurozone crisis: Cameron and Merkel stress friendship Eurozone crisis: Cameron and Merkel stress friendship
(about 1 hour later)
  
David Cameron and German Chancellor Angela Merkel have acknowledged differences but stressed they have the "same plan" for European growth. David Cameron and Angela Merkel have acknowledged differences over the eurozone crisis but stressed they have the "same plan" for European growth.
The two leaders met in Berlin to discuss the eurozone crisis and other issues, including sanctions on Iran. The UK PM and German chancellor met in Berlin to discuss the eurozone crisis and issues including Iran and Syria.
Mrs Merkel said they did "not make progress" on plans for a European financial transactions tax.Mrs Merkel said they did "not make progress" on plans for a European financial transactions tax.
But Mr Cameron, who argues any such tax must be global, said they were "good friends" who wanted Europe to succeed.But Mr Cameron, who argues any such tax must be global, said they were "good friends" who wanted Europe to succeed.
'Good relationship''Good relationship'
The meeting came amid continuing tensions between the two countries over issues like the transactions tax.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. At a joint press conference, 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, keeping EU spending in line with inflation 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.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. Mr Cameron said a global tax would be "a good thing", but is concerned that a tax which 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 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 these differences," he said.
"It's a good relationship. We have strong agreement on key issues about action the European economy needs to take.""It's a good relationship. We have strong agreement on key issues about action the European economy needs to take."
'Two speed Europe' Treaty change
He said that as economic growth stalls, it was "essential" the UK and Germany work together, and the German view that eurozone countries must show a commitment to fiscal discipline was "absolutely right".
Other areas of disagreement include whether the European Central Bank should be allowed to bail out struggling countries - something Mrs Merkel is resisting.
Neither leader addressed the issue directly at the press conference, but Mr Cameron said: "All the institutions of the eurozone have to stand behind and back and do what is necessary to defend it."
Mrs Merkel's CDU party 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.
A treaty change could prompt calls from Mr Cameron's Conservative MPs for a UK referendum - a "referendum lock" was introduced in the UK's European Union Act 2011, aimed at preventing major transfers of power from London to Brussels.
Boost competitiveness
At the press conference, Mrs Merkel called for "limited treaty change, only for members of the eurozone" - Mr Cameron said they had had a "discussion" on the issue adding: "Germany has her interests and so does Britain."
Mrs Merkel said: "The UK has made it clear to us that they have a few difficulties here and there with certain legal provisions of the EU and also have their own ideas on how to boost competitiveness.
"We both have interests, but we also have strong bonds of friendship and these strong bonds of friendship bring us to say we will work together closely in the period leading up to December 9 [the European Council summit] because we absolutely understand each other's viewpoints."
For Labour, shadow foreign secretary Douglas Alexander told the BBC the meeting had to be followed by "action" - and accused the PM of spending more time negotiating with his own backbenchers, rather than other European leaders.
"I welcome the fact that at least today there seemed to be some common ground between Germany and Britain on the need to continue to take forward the completion of the single market," he said.
"But we should have been engaging in that argument for many months and I fear that for all the warm words at the end of today's meeting, David Cameron is actually leaving Berlin just as isolated as when he arrived."
Mr Cameron met European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso in Brussels on Friday before flying to Berlin.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". The meetings come as concerns grow that the debt crisis is spreading; in recent days core countries such as France have joined Spain and Italy in seeing their borrowing costs rise.
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.
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.
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 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.
'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.
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.
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.
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.