Merkel Considers Cameron's Proposal to Renegotiate British Membership with the EU

The euro traded steadily on Friday morning even after UK Prime Minister David Cameron gave a worrying speech on Wednesday; in which he promised to but Britain's membership to the EU to a vote if his Conservative party won the upcoming election. Following his speech, the common currency was little changed and traded at $1.3446 at 10:15 GMT on Friday morning. Cameron's speech was much anticipated, which accounts for the lack of affect it had on the value of the euro. His hope is to renegotiate Britain's membership in the union, and allow for looser and more flexible terms. Although he did not mention whether or not he would push to leave the union if the terms were not changed, most of his conservative party would be sure to press for an exit. At Thursday's World Economic Forum, German Chancellor Angela Merkel unexpectedly spoke of Cameron and his wishes to renegotiate membership in a positive light. According to Financial Times, Merkel told her peers that she believes EU membership should be binding for countries within the currency, but “freely accessible” to EU members like the UK. In her address she also promised to work alongside Cameron in order to fight tax evasion, one of his initiatives as chairman of the G8. Although Merkel kept from criticizing Cameron's promise to put his membership to a vote, many are expecting her to take a tough stance when it comes to the membership renegotiation. The fear among most eurozone leaders is that once you allow one member to unpick EU treaties, other countries, like France, will want to do the same. A domino effect like that would threaten to tear the single market apart. Later on Friday, investors will be waiting to hear how much of the one trillion euros European banks will be required to pay back to the ECB. The amount, set to be released at 11:00 GMT, is expected to be near 100 billion euros, although some expect the number to be as high as 300 billion as banks try to show their strength and slowly move away from ECB funding.