Business World

Sunday 24 September 2017

No going back on spending cuts, says Cameron

David Cameron: pledges to stick with austerity plan
David Cameron: pledges to stick with austerity plan

Tim Ross and Martin Beckford in London

BRITISH Prime Minister David Cameron will declare today that there is "no going back" on harsh spending cuts, after seeing the leaders of France and Greece swept from power by public anger at austerity.

The eurozone is in "extreme trouble" and headwinds from the turmoil threaten Britain's recovery, he will warn.

In a rare joint appearance with Nick Clegg, Mr Cameron and his deputy will rededicate themselves and their parties to protecting the country from "the financial storm".

Two years on from their first press conference in the Downing Street rose garden, the Liberal Democrat and Conservative leaders will restate the case for the Coalition to "rescue the economy from the mess left by Labour".

Their pledge will come against a backdrop of turbulence in the markets and the election results in France and Greece, which saw two pro-austerity administrations ousted.

At one point yesterday, the euro fell to a three-year low against the pound, while analysts predicted that Greece would be forced to leave the eurozone, greatly increasing the risk of economic "contagion" to other European countries.

Economists at Citigroup said the election results significantly raised the risk of Greece leaving the euro within a year.

Tristan Cooper, a sovereign debt analyst at Fidelity Worldwide Investment, added: "Although it should be no surprise that Greeks are spurning the Troika's bitter medicine, the violence of the rejection is a shock.

A Greek eurozone exit is now firmly on the cards."

Mr Cameron and Mr Clegg already faced disquiet among their MPs after the economy slipped back into recession and the Coalition parties received a hammering in last week's local elections.

Anger

During a joint visit to a factory in Essex, Mr Cameron will insist that he is listening to public anger at spending cuts, but securing the economic recovery "remains our guiding task".

"In these perilous times it's more important than ever for Britain that we stick to it," he will say.

"I don't hide from the scale of that challenge, or from the message sent by voters in many places in last week's elections."

He will say that the double-dip recession shows the scale of damage done by the banking crisis.

"Here is the unvarnished truth. The damage done by the crisis was greater than anyone thought.

"The first quarter growth figures have shown a tough task getting even tougher. Abroad, the eurozone remains in extreme trouble and is in recession. Oil prices are making life difficult for families around the world."

However, he will insist that "getting our deficit under control", through public spending cuts, is crucial to the recovery.

"There can be no going back on our carefully judged strategy for restoring the public finances," he will say.

"I know that the task of getting driving our economy forward when faced with the headwinds that are blowing in from the eurozone is a formidable one.

"But this Government is determined to do whatever needs doing to succeed." (© Daily Telegraph, London)

Irish Independent

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