listen to any other requests. he asked whether it would be a nato led operation in terms of training, yes, it will, therep won't be nato combat operations after 2014. he asked about the relationship with with pakistan. it is essential that they are reopened. i spoke to the prime minister when with he visited the u.k. about it a week or so ago. i spoke to president zadari. i'm confident progress will be made. but it does need to be made more rapidly than we currently see. he asked about the political challenge. he's right about this, i said all along, alongside the military surge, you need a political surge. we're working hard with the afghans to join us. they need to lay down weapons, join the political process, that will be open to them. we have to be prepared that the political process won't advance as far as we'd like. that's why we must make sure the buildup of the afghan national

security forces goes to plan sorgs we can hand over in good order, and i believe we will. i welcome what he says on syria and burma. on president hollande, i mean, he said something that i think he should adapt slightly and repeat. the national debt is the enemy of the left and the enemy of france. we've never heard him say anything clear like that. if you look at what president hollande is doing. he was asked how he would stimulate growth. he said, the means cannot be extra public spending, since we want to reign it in. he asks about our approach on growth. we agree with the italian prime minister. we need structural reform in europe. we agree with the german chancellor, the deficit reduction is vital in getting interest rates down. the problem is, europe hasn't

had all three. we support all three those things. i say to him that nobody i can find -- not even the left wing party in greece backs his idea of an extra 200 billion pounds of borrowing into the british economy. that is the labor policy, it would wreck our economy, our prospects, which is exactly what they did in office. >> is there anyone at the g8 summit emphasize that the basic calls of the economic and political crisis in europe is not the greek debt? it is the single european currency and lack of a lender of last resort, which is now a threat to the global stability

of banks. and may i put it to the prime minister, that until the leaders of the great nations grasp that fact and act upon it, that the turmoil in europe will continue. >> i think my friend makes an important point. a single currency requires an active interventionist central bank behind it. i think this realization is something we've been saying for a long time. it's one of the reasons why i've been skeptical about the single currency, i think there is a growing realization, that alongside plans to deal with deficits so you have fiscal credibility, you need an active monetary policy. just as it's the u.k. between our nations, if you're going to have a working single currency, you need that sort of monetary policy too. >> i welcome the change of rhetoric over the weekend.

the prime minister recognizing that austerity alone will work. at least from his point of view in europe. could you tell us whether or not the german position has changed at all? because it doesn't seem like it? and until the german position does change, i find it very hard to believe the eurozone is possibly going to come up with anything that is convincing and credible before the greek elections on the 17th of june. >> i have great respect for the gentleman. i would say that the german approach is changing to an extent because the germans know that alongside deficit reduction, you do need to have greater coordination of the currency, they don't want to take the foot off deficit reduction until they have move a political system around a single currency. i understand their kens many it's one of the reasons i never wanted to join a single currency much i always believed a single currency involves a single

economic go. . i think that is the struggle to try to convince countries in europe that alongside deficit reduction, you need a more active monetary policy. >> thank you, mr. speaker. does the prime minister agree, the bank of england and the banking regulators in the u.k. need to amend their operation, in order to assure sufficient money and credit available to fuel the private sector led recovery, not just more cheap money for the state. could they not learn from america which is doing this very well, and avoid the problems which europe is plunged into by doing it far worse than we're doing it. >> my friend makes a very important point. when i say active monetary policy, i don't simply mean a central bank that engages in

quantities, you need to assure that all the monetary insti tugszs are properly capitalized and properly working. i think around europe, there's a lot of work that needs to be done on that. >> with regard to the prime minister's discussion with the president of pakistan. will he deploy barack obama's offense i offensive courtesy to pakistan, the united states has violated the sovereignty of with deadly effects. and will he say that britain stands shoulder to shoulder with with our commonwealth partner in defying american colonialism. >> i wouldn't put it like that. the point is, i think we need to, with our american allies and the special relationship work very closely with them to try to deal with the terrorism that has

come out of afghanistan, and is still coming out of parts of pakist pakistan, it's in our national interest we do that. i urge all friends and partners to show patience and understanding with pakistan, because they are the biggest victims of terror of all. they have complex politics, and they need to be given the space to resolve some of these issues and they need to know that their friends like britain will not leave them after the afghan conflict is over. but are there for long term partnership, friendship and support. >> mr. speaker, of course i associate myself and colleagues, but the tributes to our serving forces particularly in afghanistan and those who have given their lives. on the globe sal economy, would the prime minister continue to make clear, although we are not in the eurozone, and shouldn't wish to join the eurozone, it's in our interest to support the other countries in the eurozone

by supporting their structural reform. and increase across the whole of europe is in their interest and ours, and construction at home is the best way of getting us into the growth that we need in this country. >> i think my friend is entirely right, it's in britain's interests that the problems of the eurozone are dealt with. we have made consistently a whole with series of suggestions about firewalls, strengthening banks, about consistent and strong contingency plans. the point i was making is it's become ever more urgent to make those plans, it's not in our power about whether greeks will decide to stay in the eurozone or out of the eurozone. we have to prepare for every eventuali eventuality. >> this morning the european parliament by a very large majority passed the call for

action stance. >> i'm against the financial transactions tamm. for a simple reason, the european commission did a piece of research into a transactions test. what it sounds like, it's taxing the bankers and the rest of it, actually you end up putting up the costs of people's insurance policies, putting up the costs of pension policies and driving all that offshore. i'm not surprised some of the european countries support it, because they see it as a good way of taking a lot tax out of the u.k. and spending in europe. i'm not falling for it. >> there is increasing pressure for political union between certain member states. whether this is by enhanced corporation or by governmental treaty or other stealth measures. does my friend accept that irrespective of the european union act passed last year that

such a fundamental change in the relationship between the european union and the united kingdom would with necessitate a referendum? >> i think the right position for the u.k., if we were to pass power from brussels to -- we should hold a referendum. where i do agree is clearly the single currency has within it the seeds of greater political union, and we have to work out in this country, the coalition how to respond to that, and how to get the best deal for britain as that situation develops. >> you talked about the continued importance of nato, and some of the things that had been agreed. but the changes that have been agreed are largely peripheral, and the need for reform is

pretty profound. is there not a danger that the understandable focus of the economic crisis is sucking the life out of the need for reform in nato. we need to focus on that, and notwithstanding the understand able needs of the economy, make sure the change program that's so badly needed to get decent interoperatability within with nato doesn't lose its momentum. >> the gentleman speaks with with great knowledge of this subject. there has been one nato reform, which i know he would welcome, which is to try to cut down on the bureaucratic headquarters. to be fair to secretary-general rasmus, we've also delivered the ballistic missile defense in

capability. where i'm an optimist, perhaps more optimistic than him, i think the reality of the situation is going to drive us toward reform. everyone faces tough budgets. the fact that america is providing almost three quarters of natos funding and assets is unsustainable. other countries are going to have to step up to the plate, look at their arrangements, cooperate more as we're doing with the french. in order to deliver more of the teeth and less of the tail. >> nato is vital to our security and may i congratulate you on the role you played as the leader of one of the most important countries. the secretary-general's program for smart defense is key to the future of nato. >> i thank my friend for his remarks. the truth is, that there is duplicated capacity over europe

in terms of defense, and much of it is not deployable. what we need is for all countries to undergo the quite difficult and painful things we've done in terms of strategic defense reviews so work with out the systems that you need for the conflicts of the future. recognizing that we're less likely to fight fights, land invasion in nato much more likely to be dealing with failed states, the capacities you need are different. we need a lot more cooperation, i think between the leading members of nato. and that's why we're work so closely with the french. we can deliver complimentary capabilities and get more done. >> the aim of achieving -- the imf made a recommendation that the u.k. banks slow up their acquisition, thereby producing more money available to british businesses and small businesses.

does the government agree with that recommendation and will they work with the bank of england to implement it as soon as possible? >> i think the gentleman raises an important point. this is a difficult issue to get right. here we are rightly discussing two problems. one the need for growth. the other, the need for financial stability and making sure you're safe with the head winds of a potential eurozone storm approaching. i think the best approach is to work hand in glove with the bank of england to get that balance right. that's what the government will do. >> i'd like to congratulate the prime minister on his stamina. he has done three summits in two days on two continents. can i reiterate the points made, we have to -- what we need, and

it's essential that we have a review of nato's strategy with a full commitment by all its members. >> i'd like to thank my friends. that will be enough summits for some time. the g-20 will soon catch up with us. what he says about nato is right. we need the reviews by all nato countries to go through their budgets to work out what is actually necessary for national defense, but what more we can all do to make sure nato has the capacities for the future. >> we need to spend more -- the nation of cyber terrorism which is posing an ever greater threat, can the prime minister assure us there will be the intense focus on resources given to that very big and growing problem acrossed world? >> well, i can certainly say for

the u.k.'s part, one of the things we did in the strategic defense review, was from some of the savings we made. from memory, i think 900 million pounds into a cyber defense program. that's been coordinated with gchq and the private sector. it's the capability we hope to work with ornate toe members to make sure we're sharing the best experience and endeavors, that should lead to savings. >> mr. speaker. the euro is dead -- it's no more, it ceased to be, it has expired. why did the euro continue to claim it is alive and well? isn't it essential that europe implements an oddly gray cup of the eurozone, before the markets force an economic tsunami? >> what i would say to my honorable friend, i've always been a genuine euro skeptic.

that's why i didn't want to join p it we have to recognize what is in this country's interests. i believe that will involve a greater fiscal transfer, i think it must involve overtime euro bonds. it involves more active monetary policy in europe. and we should be encouraging european partners to go down this road to ensure the system works properly. we have to be clear that although there are real dangers in terms of disorganize d exits it's not just the country that is would devalue. you have to think about the impact on financial institutions and banks around europe, including british banks. it's very important that the eurozone takes those zeps to put in place the contingency plans to keep them safe. >> now that he's lecturing greece about the need for

growth, and we need a little bit in spain, and also in the eurozone, for the sake of clarity, can we get to the bottom of this growth here, repeat these words after me. i'm going to drop the austerity plan and go for growth in britain. now's your chance. >> i'm afraid i don't agree. i don't agree with the honorable gentleman -- i deeply regret my last intervention with him was a bit more sharp than it should have been. i hope you accept my apology for that. he's a tremendous ornament to this house, sean always remains the case. i don't agree with him, because i think a deficit reduction plan is necessary and essential for growth. when this government came to power, our interest rates were the same as spains, ours are less than 2%, theirs 6%. one of the reasons for that, we have a credible fiscal policy.

>> thank you, mr. speaker. could my friend give the house an absolute cast iron assurance that while he is prime minister, this country will never ever join the euro, unlike the position of the leader of the opposition who is open to the idea. >> i'm very happy to give that pledge. i note the leader of the opposition said it depends how long he will be prime minister. i'm not sure which prospect is more terrifying. >> people see their friends suffering from a lack of opportunities, so they feel distressed when they huge unemployment rates for young people in greece and spain. will the prime minister say specifically what discussions he had with g8 colleagues about infrastructure development as a possible plan for growth. >> we did discuss the issue of infrastructure development, i think it can be part of what

needs to be done. the rise unemployment is tragic in any country. when you look at the figures if greece and spain and elsewhere. they are eye watering figures, 50% of young people unable to find work. i think the elements of the plan we need the fiscal credibility that gives you the low interest rate. the active monetary policy that supports demand in the economy, as it has done in the u.k., that needs to be combined with structural reforms and there is a need for proper structural reforms so they can have competitive economies. i think the extra llt is using the credibility that we've earned. the strength of the government's balance sheet to try to deliver innovative finance. that is obviously an option that is open in europe as well, and i think that's what president hollande is referring to. those are the elements of a growth plan, we got them in the u.k., we need them in europe as well. >> when we look at the scale and

time scale, we get a sense of the awesome challenge that would face any german chance lower in trying to achieve fiscal union in europe. >> i think my honorable africaned is entirely right. this is why, when some people, imply that german stubbornness is unreasonable. it's understandable. obviously, i think for the success of the eurozone, we need everyone to adopt the sorts of approaches i've been talking about. it is important to understand people's motivations and difficulties, because that is what lies behind the current impasse. >> chris bryant. >> it is good -- even leaving aside the elections in the russian federation, there are major human rights abuses in russia. for instance, kolikovski's

second trial who has been condemned by many organization in the world and in russia. he tried to get an appeal for that, it was turned down only last week, by judge alexander verano. he's a military judge. when the decision was handed down there could be no appeal, it was done on the russian armed forces website. doesn't this show that russia has a great distance to go yet before it can really embrace being a part of the humanitarian nations? >> we discuss regularly with russian colleagues the importance of freedom and human rights and democracy. when i met with russia, i discussed precisely those issues. i think it is worth with while having russia in the g8. when with we are discussing issues like iran and syria, where russia has an interest and we want them to join in in the efforts that we're pursuing, i think it's helpful to have them

there. >> thank you, mr. speaker. >> in the absence of progress toward a global trade, the eu deal could be a decent second best if it reduces its tariff barriers to trade and how much the european community will benefit from it? >> i think there is something salvageable, which is helping reduce customs times, charges and the rest of it bs rather than the bigger package. i think we should pursue that. in terms of the eu/u.s. potential deal, we had a conversation at the end of the g8 where we agreed to look at the issues paper for the g20 whether there was a small enough distance between the eu and u.s. to close that would make a deal

worthwhile. i'm hopeful, britain is one of the most open trading nations. there are real concerns on both sides. you have a french position on agriculture, and i think we have a good look at it in the g20 and see whether we can fast track it. >> is the prime minister aware that greece spends 50% more on defense than ourselves, france or turkey. it is the biggest arms importer in europe. the greek shipping industry doesn't pay a penny in tax. the greek orthodoxed church doesn't pay a penny in tamm. can we ask him to descale defense spending? the orthodoxed church to pay a little bit to solve the greek crisis. >> i think the auto general makes a good point, which is it, however much one can look at the greek situation and feel for the

suffering people have in terms of unemployment and living standards, there is a crying need for genuine reform in greece and for a more straight forward and honest politics of dealing with the problems. making sure people do pay their taxes and industries are competitive. the issue is obviously more complex because of the relationship between greece and turkey. there should be an opportunity to decrease greek spending on national defense in that way. but encouraging it to be a member of the eu at the same time. >> did any of the leaders make the argument that dealing with the deficit and supporting growth are alternatives? or did they argue that you need to support growth through monetary policy, supporting the banks, getting trade going? and was there anybody who made the argument that you need to

borrow your way with out of debt? >> he makes an important point. there was no one suggesting somehow dealing with deficits and -- that is the view of everybody around the g8 25ib8. there's only one with group of people that have their head in the sand or a complete deficit denial, that's the people that gave us the deficit in the first place. >> i would like to turn your attention to youth unemployment and the economy set to contract by a further 6% in the current financial year. he has preached austerity, that's what's been done in greece and that's the result of it. is he prepared to put pressure on the european central bank as far as he can, to stop the austerity oppression on greece and start supporting the needs of very ordinary people who work

very hard and don't deserve this misery? >> where i part company, we very consistently said you need to have deficit reduction that delivers you the low interest rates, and enables your central bank to pursue an active monetary policy, which is what we've had in this country. and at the same time, you need the structural reforms to make sure your businesses are competitive and they can take on more people and grow. that is what we're seeing in britain with 600,000 more private sector jobs. that is a world away from what is happening in greece or many other parts of the eurozone, they haven't undertaken the structural reforms we have in this country. >> thank you very much, mr. speaker. the biggest threat to our country at the moment is the crisis in the eurozone. almost parallel to that is the pending crisis if the middle east. with a start that today's very important conference in baghdad

did we find time over the weekend to speak to the russian and chinese leaders to emphasize the importance of anywhere goal to make sure we have a peaceful outcome of the situation? >> a good portion of the g8 was spent discussing the situation in iran, and specifically talking about the talks that are underway in baghdad today. it was the russians who signed up in terms of a tough text. europe has rightly adopted these oil sanctions, the pressure is beginning to tell on the iranian economy. this is the moment to pressure other countries aaron the world to join in on these sanctions and to say with the iranians there is another pathway. you have to give up the ambition of enriching uranium to the extent it could deliver you a nuclear weapon.

>> whatever structural deficiency and other problems, the problem is not caused by that. it's caused by a banking and economic crisis in the world. now, the suffering and austerity that's taking place in greece is on a completely different scale. it's untenable for that to continue. the problem is not to look at the germans and say, what can we do? remind the prime minister greece is a very proud nation. they're a very important ally of ours, they stood by us. we should do what we can to help them. >> of course i agree. i don't agree with him, that the problems in greece are only caused by the euro or by the banking crisis. there are deep and profound