UPDATE 1-Cameron tells Germany UK needs strong, stable euro

* Cameron says UK needs stable, strong euro zone

* Naked short selling is matter for UK regulator FSA

* Won’t agree to treaty changes pulling UK into euro

(Adds details, quotes)

By Stephen Brown and David Brunnstrom

BERLIN, May 21 (BestGrowthStock) – British Prime Minister David
Cameron told Germany on Friday that Britain needs a stable euro
currency, although he would not agree to any EU treaty changes
that drew Britain further into supporting the euro.

“Britain is not a member of the euro nor are we likely to
become a member of the euro, but we want a strong and stable
euro zone,” said Cameron. “That is where 50 percent of our trade
goes and it is in our interests that that takes place.”

Cameron met German Chancellor Angela Merkel in Berlin and
made Germany his second foreign destination as British leader
after visiting Paris the previous day.

At their joint news conference, Merkel, who spooked money
markets this week by saying the “euro is in danger”, said she
and Cameron had “talked about how important a stable euro also
is for countries who don’t belong to the euro zone”.

Germany caused market mayhem earlier this week by acting
alone, and without consulting its European Union partners, to
ban naked sort selling of certain financial instruments, which
helped push the euro to a four-year low and routed stocks.

Cameron, asked whether he planned to imitate this ban,
replied: “In Britain it would be a matter for the Financial
Services Authority and obviously we should respect each others’
decisions on these issues.”

Some of Germany’s euro zone partners were less phlegmatic,
with the French government and European Commission voicing
irritation at the unilateral move, and U.S. Treasury Secretary
Timothy Geithner saying such measures tended to be unhelpful.

Cameron said debate should focus instead on the “real
causes” of the problems suffered by European economies, citing
their excessive debt and deficits as well as financial system
and banking failures “that have dragged our economies down”.

“Those are the problems, we have to tackle the problems, and
get to the source of the problems, and then we will find the
symptoms will be less of a problem,” he said.


Cameron voiced his admiration for the German chancellor’s
“determination and leadership”. Merkel had expressed her fears
before the British election month that eurosceptic tendencies in
his party could weaken the EU if it came to power.

Such tendencies in his centre-right Conservative party may
be toned down by its partnership with the centre-left Liberal
Democrats, and Cameron said he had asked Merkel for advice due
to experience leading an earlier German “Grand Coalition”
between her conservatives and the centre-left Social Democrats.

“I am sure this will be the start of a very strong and
positive partnership based on results and practical actions in
the interests of our countries,” said Cameron regarding his
future relationship with Berlin.

He stressed areas of agreement and said they would work
together on the G20 and G8 agendas “particularly in terms of
banking regulation, making sure that banks are serving our
economies rather than our economies serving banks”.

But, reiterating that Britain was unlikely to join the EU
currency union, Cameron said there was “no question” of London
accepting any EU treaty change “that transfers power from
Westminster to Brussels”.

That contrasts with earlier comments by Merkel, who has said
that changes to the EU treaty are unavoidable if the bloc wants
to learn from the Greek debt crisis.

Cameron said Britain “wouldn’t agree to any arrangements or
treaty that drew us further into supporting the euro area”,
stressing that this would require unanimous support of all 27 EU
member states — “including the UK, which of course has a veto”.

Stock Market Analysis

(Additional reporting by Paul Carrel and Madeline Chambers;
writing by Stephen Brown; Editing by Elizabeth Fullerton)

UPDATE 1-Cameron tells Germany UK needs strong, stable euro