European finance ministers postponed giving Greece a further £10.6 billion of support until the stricken country's ministers agreed to a new round of spending cuts and tax rises.
It was uncertain last night whether the Greek government, which has faced mass protests against the cuts it has already introduced, would be able to deliver on the demands.
But there was also a stark warning from the new head of the International Monetary Fund, John Lipsky, that if the Greek economy was allowed to collapse, it would have a domino effect across the eurozone and could destroy the currency and drag other economies down.
In a statement in the Commons yesterday, Treasury minister Mark Hoban said that the only UK support for Greece would come through the IMF and not a European Union package.
However, he also told MPs that the UK banks were exposed to about £8bn of Greek debt.
The government's stance was attacked by Mr Straw, who said that ministers were "hiding behind weasel words". He went on to say that the euro "cannot last".
"What the government should do - instead of sheltering behind the complacent language, weasel words 'it's not appropriate, we shouldn't speculate' - is recognise that this eurozone cannot last and it's the responsibility of this British government to be open with the British people now about the alternative prospects," he said.
"If this euro in its current form is going to collapse, is it better that it happens quickly rather than a slow death?"
Tuesday, June 21, 2011
Jack Straw says the Euro is Doomed
The result that most European leaders refuse to even mention, let alone discuss -- the end of the Euro -- is being publicly debated in Britain. The latest to weigh in is former Treasury Secretary Jack Straw: