PM: 'Eurozone Crisis Bad For UK Economy'

The Prime Minister has said it is in Britain's interest that the eurozone crisis is sorted out as rapidly as possible and that decisive action is needed from Greece.

Speaking at a conference on the second day of the G20 summit , David Cameron said: "This is having a chilling effect on our economy and, as I said, for every day it goes on not resolved, is a day that is bad for our economic prospects. That is fact.

"Clearly one aspect of getting it solved is to resolve the Greek situation one way or the other."

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Mr Cameron added that Greece would need to decide whether to stay in the eurozone and accept the accompanying conditions, or "take a different path", but that it could not have "endless discussions" on the subject.

He also reiterated that Britain, like other G20 countries, will contribute further to the International Monetary Fund (IMF) but not to the eurozone bailout.

The IMF increase will provoke controversy in the UK because it will indicate that Britain will be indirectly committed to providing further cash for bailouts - although the Fund will not give directly to the European Financial Stability Facility (EFSF) , and the extra cash will not show up as a bigger UK deficit - because of the way the contribution is accounted for.

Earlier the German Chancellor Angela Merkel had said there was no G20 accord on the exact size of the larger international economic backstop.

IMF head Christine Lagarde said this was unimportant as it had "no floor, no cap, unlimited commitment".

Delegates at the G20 summit had aimed to bolster the IMF to protect vulnerable economies like Italy and Spain.

Chancellor George Osborne, had said there was a "conversation about increasing resources to the IMF in the classic way", although there are unlikely to be precise figures until the meeting's conclusion, if then.

Experts think the IMF's resources would need to be doubled in order to make it big enough to calm markets.

Meanwhile, Italy has refused a loan from the IMF but will submit to having its books looked at in an effort to boost its credibility.

European Commission president Jose Manuel Barroso said the IMF will monitor the country's economic reforms.

The Fund currently has \$950bn (£595bn) of resources, although more than half of this is either in use or has been committed to troubled countries.

The plans to increase the emergency fund gathered pace amid concerns that the EFSF - the eurozone's own bailout fund - is failing to inspire investors and calm markets.

The day's events follow news about the Greek government's volte face on plans to hold a referendum on the latest stage of the country's bailout.

Despite cancelling the referendum plan, the Greek Prime Minister faces a confidence vote in parliament on which the nation's future hangs.

In his speech at the G20 conference, US President Barack Obama said Mr Papandreou's actions had made many people nervous but that despite the turmoil even the Greek opposition wants the bailout.