Osborne in eurozone economy warning

Britain's prospects for economic recovery are being "killed off" by the crisis in the eurozone, Chancellor George Osborne has warned.

In a stark message to the leaders of the 17-nation single currency bloc, Mr Osborne said they were facing a "moment of truth" which could determine the future of the entire continent for years to come.

In some of his strongest comments to date, the Chancellor voiced his exasperation at the repeated failure of the eurozone nations to find a permanent solution to end the financial turmoil.

Writing in The Sunday Telegraph he said: "The lesson of the last two years is that treating the latest symptom does not cure the underlying conditions."

While there were signs a solution to the latest bout of uncertainty in the Spanish banking system was on the cards, Mr Osborne said it would not be enough to end the threat to the UK economy.

"Our recovery - already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years - is being killed off by the crisis on our doorstep," he said.

"I know from talking to British businesses that our country is bursting with entrepreneurial spirit and exciting investment plans that are being held back because of uncertainty about the future. That's why a resolution of the eurozone crisis would do more than anything else to give our economy a boost."

He added: "The British Government is clear that it is strongly in Britain's interests for our biggest export market to succeed; the risks for us of a disorderly outcome are huge."

With the prospect of further turmoil in the wake of the of the forthcoming re-run of the Greek elections, the Chancellor called on the eurozone countries to take decisive action to end the instability. He said: "We are approaching a moment of truth for the eurozone. After more than two years of uncertainty, instability and slow growth, decisions taken over the next few months could determine the economic future of the whole European continent for the next decade and beyond."

He again underlined the need for greater fiscal integration - with more pooling of financial resources and the creation of a banking union - across the currency bloc, saying: "The solution in the eurozone doesn't have to be a full-blown United States of the Eurozone, but if it is to be successful it is likely to include most of the mechanisms that make other currencies work."

©Press Association

Cameron, Osborne, Brown and Clegg At Leveson Nex Teek

David Cameron and Chancellor George Osborne are among a list of political heavyweights due to appear before the Leveson Inquiry next week.

The Prime Minister has been called to give evidence to the probe into media ethics at the Royal Courts of Justice in London on Thursday.

Ex-PM Gordon Brown and Mr Osborne will be first up on Monday, followed by Labour leader Ed Miliband, his deputy Harriet Harman and former prime minister Sir John Major on Tuesday.

On Wednesday, Deputy Prime Minister and Liberal Democrat leader Nick Clegg will take the stand, as well as Alex Salmond, leader of the Scottish National Party.

Mr Cameron is likely to be questioned about his relationship with the media, News Corporation chief executive and chairman Rupert Murdoch, and his friendship with former News Of The World editor Rebekah Brooks.

The PM is also likely to be grilled over his decision to hand Culture Secretary Jeremy Hunt the responsibility for overseeing News Corp's BSkyB bid.

At the last hearing on May 31 before a one-week break, Mr Hunt survived a six-hour grilling over his handling of the process .

Mr Cameron judged afterwards that the cabinet minister had acted "properly" and decided not to order an investigation into whether he had breached the ministerial code of conduct.

Mr Hunt also insisted there was no reason for him to quit, insisting he handled the bid with "scrupulous fairness" - though he admitted in his evidence that he had considered resigning.

He also suggested he regretted text messages he exchanged with senior figures from News Corp.

The inquiry also heard he sent text messages to Mr Osborne expressing his fears the Government was going to "screw up" the deal when secret recordings of Business Secretary Vince Cable "declaring war" on News Corp emerged.

Mr Cable was later stripped of his responsibilities for the media.