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UK told it is facing severe debt
Auckland News.Net
Monday 8th February, 2010
An ex-IMF chief economist, Simon Johnson, has told the BBC he believes the UK should be seen as being akin to countries such as Greece and Spain, which are facing severe debt problems.
Mr Johnson said that the UK should be added to countries where debt ratings have come under serious pressure, because it has large budget deficits and cannot spend sufficiently to boost its economy.
He said: "Borrowing has been allowed to rise so that the government has been able to protect the economy from the global downturn. But,
supporting the economy through to recovery goes hand-in-hand with steps to rebuild fiscal strength once recovery is firmly established."
The UK officially come out of recession in the fourth quarter of with a growth of only 0.1%, much less than expected.
Mr Johnson also described the G7 group of leading economies as "fundamentally useless."
He said the organisation had not reacted quickly enough to the financially critical problems facing Europe.
Mr Johnson accused G7 officials of having an out-of-date mindset and showing no awareness that much of Europe is facing a serious crisis.
He said the crisis would not be limited to Spain, Greece and Portugal, but would soon also affect Ireland and Italy.
Economic pressures on the EU will be discussed later this week when the new President of the European Council Herman von Rompuy chairs a special economic summit in Brussels at which the public finances of Greece, Spain and Portugal will be discussed.  Email this story to a friend
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