Nigel Morris: Germany Tightens the SCREW!

An anti-British backlash gathered pace in Germany as David Cameron and Angela Merkel struggled to disguise the gulf between them on how to tackle the euro-zone crisis. The Prime Minister returned from talks in Berlin with the German leader, having made little progress in agreeing emergency action to stop the financial contagion spreading. Tensions were inflamed after a close ally of Ms Merkel predicted that Britain would eventually adopt the euro. The German media joined the clamor, with the mass-circulation Bild questioning whether it might be better for Britain to leave the European Union altogether. Behind the leaders' smiles at a joint press conference yesterday, they acknowledged fundamental differences remained on three key issues: New euro-zone rules. Ms Merkel called for "limited" changes to European treaties to impose fiscal discipline on the single currency, but stressed negotiations should only be for euro-zone members. Mr Cameron wants Britain involved in the talks because of the potential impact of the decisions on the UK. Whether the European Central Bank should intervene to support the Euro-zone. Ms Merkel, backed by the German public, is fiercely resisting the move, which she fears would fuel inflation. But Mr Cameron insisted that all the euro-zone's institutions had to "do what is necessary to defend it". Taxing financial transactions within the EU. Ms Merkel supports the step, but Mr Cameron fears it would disproportionally hit the City and said it would work only if applied globally.