British chancellor: "Moment of reckoning" for Europe this summer

(CBS News) Will the European financial crisis drag America back into recession?

In an emergency measure, Britain is moving to defend itself. The Treasury pledged the equivalent of $150 billion to keep money flowing.

Europe is the biggest economy in the world; 17 countries use the currency called the euro, but several are nearly broke. There's danger that a failure would trigger a financial crisis like we saw in 2008.

That's the warning from the man who works at 11 Downing Street in London, next door to the prime minister. George Osborne is the top treasury official. He told CBS News Europe must create a common banking system so strong countries can support the weak. He talked to CBS Evening News anchor Scott Pelley about what he's been telling Europe's leaders.

GEORGE OSBORNE: The messages they're getting from myself, from the U.S. administration, and from others are very, very clear that this is an exceptionally grave moment for the whole world economy.

SCOTT PELLEY: An exceptionally grave moment for the world economy. Help the folks at home understand what the stakes are here.

GEORGE OSBORNE: Well, I think the stakes are very high. I think we might be plunged back into the kind of financial problems we saw in 2008 if we don't have a resolution of the euro crisis. And in a way, we've seen that movie already. And we didn't like it.

SCOTT PELLEY: What has to happen to stabilize Europe, in your estimation?

GEORGE OSBORNE: Well, I think what has to happen is, in effect, what Alexander Hamilton understood a couple hundred years ago in the United States, which is if you have a single currency then you need to have a national debt. You have treasury bills. There needs to be something like that in the euro zone. We need to have some confidence that bank depositors in Spain and other countries have their deposits protected by the rest of the euro zone.

SCOTT PELLEY: Deposit insurance like we have in the United States.

GEORGE OSBORNE: Deposit insurance. These are big decisions. I mean, this is all about moving more in the direction of a political union. It doesn't have to be a United States of the euro zone. But it has to move more in that direction. And whilst they dither and delay in getting to that point, the U.S. is suffering, the U.K. is suffering, the rest of the world is suffering, and, of course, the peoples of Spain and Greece and all these other countries are suffering, too.

SCOTT PELLEY: How much time do they have?

GEORGE OSBORNE: Well, I don't think they have very long. I mean, I'm not gonna put a timetable on it but I...

SCOTT PELLEY: Weeks? Months?

GEORGE OSBORNE: Well, I think you're gonna see over this summer a moment of reckoning. I think you're gonna see a moment when the euro zone have to decide. Are they gonna stand behind their currency? Are they gonna stand behind all 17 members of that currency? Or are they gonna allow, for example, Greece to leave the euro? One thing is clear: The worst thing for the world would be a Greek exit without a plan to deal with the contagion, because that would be like letting Lehman Brothers go and not having a plan for the day after.

[earth5695]

" British Chancellor "..................????????

Since when did the Prime Minister of Great Britain become Chancellor ?

In Germany its Chancellor.

Who is the editor at CBS ?

[skunk_monkey]

the UK has a chancellor to, he lives in number 11 downing street the prime minister lives in number 10. the canceller in the UK deals with the budget.

[hypnotoad72]

I thought the US was the biggest economy, with China closer at its heels?

Now it's been Europe all along?

Bogus.

[Emolana]

Why is the UK telling the Euro zone members what to do when they are not a member of this union? All what the UK is interested in is to see the full of the Euro. This will never happen. UK should not forget that even without the Greeks the Euro will not full. The UK should also take note, very soon they will be asked to start paying taxes for every business transaction made in the Euro zone since they are not a member of that union. If this happen, we are going to know what the state of the UK economy is. You are not smarter than the rest of the EU. Someday all that the UK is doing will tune back on them.

[stanleyblog]

THIS GUY AND THE BANKERS NEED TO BE ARRESTED. IT'S NOT REAL DEBT, BECAUSE IT WAS ONLY CREDIT DEBT. VIA INFLATION. THERE IS NO DEBT BECAUSE THERE WAS NOTHING EXCEPT FIAT MONEY PRINTING. SO ARREST THE BANKERS.

[stanleyblog]

LIES, the EURO WAS CREATED, as a Monopoly currency, FIAT Currency, in order to kill the Dollar, like a domino. It's destruction will drag down the other Fiat Currency, namely the Petro-Dollar, aka Dollar-Reserve-Currency that is required to trade OIL. hence the bankers and Oil people are married via this currency. Via World Bank and IMF, they loaned to EURO, and when it crashes, the dollar will crash shortly after. And this will WIPE-OUT ALL HOLDERS OF T-BILLS. E.G. SAUDI ARABIA, JAPAN, CHINA, AND EVERY MOM/POP, GRANDMA/GRANDPA Who have their life savings in Dollar backed Treasury Bills. That was why they created the Euro, the same banks that make up the Federal Reserve control the Euro. And deliberately loan to each other incestuously in order to create fast and vast debt to crash and then make these countries pay for it via gold, when they switch to gold backed currency after they have crashed this currency. EVERYTHING ELSE THIS GUY IS SAYING IS PURE PR BS, AND LIES. PROPAGANDA, AND PEOPLE ARE NOT BUYING IT ONE BIT. LIAR, LIAR, LIAR.

[Lerianis4]

Here is a better idea: Why don't you start 'acting' on the countries like Greece who are doing economic things that make the problems in Spain and Greece worse than they actually are AND the companies in question who bankrupted Greece.

[sevdalisk]

Will the beaches of southern Europe be full again after the exit of Greece, Spain and Portugal from the EuroZone? The north looking for bargains in the south and world travelers also looking for a deal. The strong Euro is no good for tourist activity which has been a vital source of income for southern Europeans for generations.

[NB62]

His offical full title is Chancellor of the Exchequer

[MythostheWhale]

hey, Germany taxes its working class much more than the US and they're doing fine!

[Lerianis4]

German working class also makes more (Euro to dollar) than working class in the United States does.

[hypnotoad72]

True, to you and Lerianis4.