The British Prime Minister David Cameron attended a European Union Summit in Brussels recently to announce that the debt crisis hanging over Greece and much of Western Europe needs to be solved “once and for all”, and that the solution needs to involve all Western European countries and not just those that are in the European Union. At present the spreading debt crisis in the Eurozone is having a “chilling effect” on the British economy. Great Britain is not currently in the EU.

“The crisis in the euro zone is having an effect on all our economies, Britain included.” said the British Prime Minister. “It’s having a chilling effect. We need to deal with this issue and so it’s right to have a European council (summit) and for the European council to discuss this issue here in Brussels today.” At the time of this writing the European Union leaders were finishing up their third day of talks conducted to develop a resolution to the economic crisis which has gripped the global economy. The response crafted needs first calm market fears and provide investors with assurances that the Eurozone is likely to remain intact. If not, then there could be a dramatic sell-off to the Euro and a flight to U.S. dollars and strategic metals like gold. The lack of a final plan that deals with the region’s financial crisis is what is credited with the long, drawn out cycle of turmoil and recovery that keeps battering the European markets.

To continue to work, the euro zone needs to be a credible vehicle which can endure through the prevailing and yet-to-be felt economic shocks. The Brussels Summit is seen as the means to a solution which would involved the consent of the stronger EU members such as Germany and France, but discussions between France and Germany have became deadlocked up to this point thus far.

Part of the plan that the EU finance minsters met to work out would include a mandate to recapitalize the region’s commercial banks in order to bolster their balance sheets and make them stronger and more likely to withstand any losses brought about by default of sovereign government debt. According to the plan, those European banks will need to have on hand about 108 billion Euros of new capital over the next 6 to 9 months according to Financial Times newspaper reports.

Complicating the matter is the European banking lobby which is heavily influenced by French owned financial institutions having a high degree of exposure to Greek government debt issues. They have complained that any “haircut” over 40 percent would be too great to bear.

One thing that is very helpful to realize is that the European Union lacks any kind of internal money transfer system such as that which is in effect within the United States. In the U.S., the more wealthy states send money to Washington which is then transferred to the less wealthy states keeping the nation as a whole insulated from economic shocks. If they had one, the European Union could instantly benefit from having an internal money transfer system because the pending Greek debt crisis would simply go away. Of course, the German taxpayers would need to agree to it, and that is one of the sticking points that prevent the EU from implementing that kind of solution anytime soon.