Merkel, Cameron to discuss eurozone debt crisis

German Chancellor Angela Merkel will host talks on Friday with British Prime Minister David Cameron amid friction over how to restore stability in the face of Europe's debilitating debt crisis. Merkel and Cameron, who will arrive after meeting with EU leaders in Brussels, have clashed recently on the way forward for Europe as it suffers what she has called perhaps its most difficult hour since World War II. While Merkel sees "more Europe" as the solution, with member states agreeing to cede more sovereignty on issues such as fiscal policy, Cameron has taken a hard eurosceptic line of late in response to domestic pressure. He lashed out in a speech Monday against "grand plans and utopian visions" and called for an European Union with "the flexibility of a network, not the rigidity of a bloc". He has also evoked using the crisis to claw back powers from Brussels. German Foreign Minister Guido Westerwelle sought to soothe British fears over Berlin's calls for limited treaty change to beef up the EU's fiscal rule book, in an interview published Friday in London's Financial Times. Any European treaty changes restricted to the 17-member eurozone bloc will only arise as a last resort, he said, playing down anxiety over a potential two-tier Europe that could see non-euro countries sidelined. German commentators fretted about the anti-Europe mood in London and said Cameron appeared to be seeking a scapegoat for troubling economic data seen this week including a record one million young people out of work. "The atmosphere between the two countries is currently frostier than it has been in a long time," the centre-left daily Sueddeutsche Zeitung wrote. "With his speech he has positioned himself firmly against Merkel, who is calling for more Europe. In Berlin this development is being viewed with concern." "The Cameron government is facing a dilemma," added news weekly Der Spiegel in its online edition. "It wants to maintain the greatest possible distance to the crisis on the continent, but it also wants to have a say, given that the crisis is changing the nature of the EU and Britain remains one of the big three in the Union." The opposing views could put the two camps on a collision course ahead of a December 9 EU summit to hammer out changes to the fiscal guidelines for the 27-member bloc. Germany would like to see non-euro Britain do more to help resolve the debt crisis such as support a financial transaction tax, which the City of London fears would spook investors. However Merkel has grudgingly conceded that Berlin would move forward with the tax in the 17-nation eurozone alone if need be. Meanwhile the combative parliamentary group leader of Merkel's Christian Democratic Union party, Volker Kauder, ruffled feathers this week with a call for Britain to "do its part" in rescuing the euro. He also staked a claim to Berlin's leadership in Europe, saying it was now "speaking German" which provoked howls of protest in some corners of the British press. Cameron has for his part urged the European Central Bank to be used as a "big bazooka" to defend the euro by buying up bonds on a major scale and becoming the lender of last resort to debt-mired countries -- moves Berlin strongly opposes. New ECB chief Mario Draghi brushed off the political pressure Friday, saying its overriding task was to safeguard price stability and that governments must get their finances in order to buck the crisis. In the current environment, the "continuity, consistency and credibility" of the ECB and its monetary policy were "essential", the Italian central banker said. In Brussels, Cameron made no comments after meeting with European Commission chief Jose Manuel Barroso and EU president Herman Van Romputy. A statement from Barroso's office said they agreed on the need for decisive action "to ensure the stability of the euro area as well as fast-tracking measures to stimulate growth and jobs." "They both underlined the central importance of further developing the single market," it added.