Cameron: Pointless EU Rules Stifling Growth

David Cameron has attacked "pointless" European Union rules and regulations which he claims are stifling growth amid a eurozone debt crisis.

The Prime Minister called for "fundamental reform" in Europe as he slated "out of touch" EU institutions demanding budget increases at a time of austerity for their citizens.

He dismissed talk of "grand plans and utopian visions" and called for a looser EU with "the flexibility of a network, not the rigidity of a bloc".

His comments were in contrast to Germany's Chancellor Angela Merkel who earlier said dealing with the problems of the eurozone did not mean "less Europe, but more".

In his annual foreign policy speech to the Lord Mayor of London's banquet, the PM acknowledged the immediate priority for the EU was restoring growth and tackling the debt crisis.

Mr Cameron - who described himself as among the "sceptics" on Europe - said: "Unless we get a grip on growth the European Union will remain an organisation in peril representing a continent in trouble."

However, he said the current crisis also offered an opportunity to undertake fundamental reform and address long-standing problems afflicting the EU.

Mr Cameron said: "It's how out of touch the EU has become when its institutions are demanding budget increases while Europe's citizens tighten their belts.

"It's the pointless interference, rules and regulations that stifle growth not unleash it."

While he stressed leaving the EU was not in Britain's national interest, he strongly defended those arguing they should be "doing less" at a European level.

"For too long, the European Union has tried to make reality fit its institutions. But you can only succeed in the long run if the institutions fit the reality," he said.

"For years people who have suggested doing less at European level have been accused of not being committed to a successful European Union.

"But we sceptics have a vital point. We should look sceptically at grand plans and utopian visions. We've a right to ask what the European Union should and shouldn't do - and change it accordingly."

In contrast, Mrs Merkel told her Christian Democratic Union party conference in Leipzig that the EU's treaties would have to be overhauled to create a tighter political union.

She described the euro as "the symbol of Europe's unification" as the continent faced its "most difficult hours since the Second World War".

Mrs Merkel said: "We must develop the European Union's structure further. That does not mean less Europe, but more. That means creating a Europe that ensures that the euro has a future."

In Italy, new unelected prime minister Mario Monti, dubbed 'Super Mario', has been urged to form a unity government and push through austerity measures.

Silvio Berlusconi's replacement has begun talks over the selection of his cabinet. But, despite the political shake-up, markets remained sceptical.

Speaking on Jeff Randall Live, Keith Wade, chief economist at Schroder Asset Management, said: "This situation is very difficult for Mario Monti because the level of interest rate that he has to pay is clearly unsustainable.

"Markets remain concerned because there isn't a bailout fund, so it's very difficult to see where we go from here and we think that this is an extremely difficult point for Italy."

He added: "Every time we call for more action, Germany says it's not going to do unlimited purchases by the ECB (European Central Bank), and not create more inflation, but unless they do so the euro could break up."

Spanish bond prices have also become a cause for concern with 10-year yields rose above 6% for the first time since the summer.

Speaking about Spain, Mr Wade said: "Spain has been a bit of a side show, but it has an economy similar to Italy. It's in an unsustainable position, which means it could follow Italy quite easily."