End game for the Eurozone?

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THAT the leaders of France and Germany denied reports which asserted that they had discussed an overhaul of the single currency, with fewer member states going it alone, in future does not mean it is an end of the matter.

Quite the opposite. The collapse of the Greek economy, and the disintegration of Italy’s finances and governance as borrowing reach unsustainable levels, means the notion of an ‘inner Europe’ is likely to grow in currency.

For, unless the Eurozone’s shattered finances can be miraculously pieced back together in days, the likelihood of the protests on the streets of Rome turning into riots and anarchy becomes greater – irrespective of the fate of a politically, economically and morally bankrupt Silvio Berlusconi.

Yet where does this leave Britain?

That the country did not sign up to the Single Currency was fortuitous and vindication of William Hague’s ability, when Tory leader, to exert sufficient pressure on Tony Blair.

The downside is that Ed Miliband, the current Opposition leader, is among those complaining that Britain is already on the margins of Europe because it is not a member of the euro, and a breakaway group headed by France and Germany will leave this country even more isolated.

Mr Miliband is right to heed a word of warning, even though the emergency summit he is demanding is likely to be pointless unless a tangible agreement can be reached. Alistair Darling, the former Chancellor, said as much in the House of Commons this week.

Yet, while David Cameron’s position appears relatively secure in this country despite faltering growth forecasts, both Nicolas Sarkozy and Angela Merkel have one eye on their domestic fortunes. The former stands for re-election next year while the latter is struggling to hold her coalition together as Germans, understandably, become fed up at propping up the finances of the Eurozone’s less affluent countries.

To his credit, Mr Cameron refused to take the Paris and Berlin denials at face value. He says he is preparing for “every eventuality”, as he must. But he should remember this. Britain’s economy depends on Europe.