Eurozone 'economic government' will affect Britain too - by John Palmer

The breathtaking financial firepower mobilized by the EU to protect the euro, including the radically new measures announced by the European Central Bank, should give the financial sharks pause for reflection. Anyone gambling on Greece and then maybe Portugal and Spain being forced out of the euro area may in the short run risk getting badly burned.

This should buy the European Union breathing space to confront even greater challenges in the months ahead. The next urgent step must be a series of detailed agreements on an EU-wide system of financial regulation with real teeth. In spite of City objections, even the conservative leaders of Germany and France are determined to break with the Anglo-Saxon system of financial self-regulation, which they rightly hold responsible for the financial catastrophe which plunged the world into crisis two years ago .

Whoever emerges as heading the new British government should understand that the rest of the EU wants to put the financial playboys back in their box. Whoever seeks to become chancellor of the exchequer should be drafting a warning to City traders of exotic, but toxic, financial products that the game is up.

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