Cameron Issues Stark Warning On Euro Crisis

David Cameron has delivered a stark warning to eurozone countries and warned political leaders they are running out of time to solve the crisis.

The Prime Minister, in a speech to business leaders in Manchester, declared that the single currency is at a "crossroads".

Reinforcing his message to MPs on Wednesday, Mr Cameron said: "It either has to make up or it is looking at a potential break up.

"Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone or we are in unchartered territory which carries huge risks for everybody."

The Prime Minister made clear Britain faces "perilous economic times" and vowed to do everything in his power to keep the country safe amid the ongoing uncertainty.

But he rejected demands to ditch the drastic austerity measures adopted by the coalition, saying it is time to "stand firm" and ignore the "dangerous voices calling on us to retreat".

The speech comes ahead of a video conference this afternoon with the new French President Francois Hollande, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti.

The talks will give the four European leaders a chance to prepare for the G8 summit at Camp David this weekend and discuss the eurozone crisis together for the first time.

Mr Cameron said that it is in Britain's interest for the eurozone to sort out its problems, but whichever path was chosen, that he will work to protect Britain and secure its economy and financial system.

Only days after the UK economy slipped into a double dip recession, he admitted: "We are living in perilous economic times.

"Turn on the TV news and you see the return of a crisis that never really went away: Greece on the brink...the survival of the Euro in question. Faced with this, I have a clear task: to keep Britain safe.

"Not to take the easy course - but the right course. Not to dodge responsibility for dealing with a debt crisis but to lead our country through this to better times."

Insisting this could be done, he said: "We are well on the way in this journey. Since we took office two years ago, we have cut the last government's deficit by more than a quarter. Yesterday, we had encouraging news on unemployment, too."

Now more than ever, Mr Cameron insisted, is the time for the coalition to hold its ground and reject Labour's alternative.

"Let me be clear: we are moving in the right direction - not rushing the task, but judging it carefully and that is why we must resist dangerous voices calling on us to retreat," he said.

"Yes, we are doing everything we can to return this country to strong, stable economic growth. But no, we will not do that by returning to the something for nothing economics that got us into this mess."

The Prime Minister added: "We cannot blow the budget on more spending and more debt. It would squander all the progress we've made in these last two, tough years.

"It would mean more austerity, for even longer. It would risk our future. It is not an alternative policy, it is a cop-out."

Labour leader Ed Miliband told Sky News: "David Cameron isn't part of the solution, he is part of the problem. He promised Britain there would be recovery and he has delivered a recession.

"All of Europe's leaders, including David Cameron, bear responsibility for the fact that over the last two years they haven't sorted out the problems of the eurozone and they haven't had a proper plan for growth and jobs in Europe.

"When you listen to the Prime Minister, he is like a man watching events. He is the Prime Minister - he should be getting in there, getting it sorted out with Europe's leaders.

"Sorting it out means not just sorting out the eurozone problems, but getting that proper plan for growth in Europe, just like we need a proper plan for growth here in Britain.

"The Prime Minister should be showing leadership, not looking like a man who is a bystander to events, shouting from the rooftops."

He added: "Even though we have got a recession made in Downing Street, he is refusing to change."

But Business Secretary Vince Cable said: "We have to be focused very very clearly on growth and jobs but we also have to be financially disciplined. These things are not alternatives, the two things go together."