EU to UK - hike taxes or cut spending
Or in somewhat longer form:
"In view of the Commission assessment, the United Kingdom is invited to (i) proceed in financial year 2009/10 with the stimulus measures consistent with the European Recovery Plan while avoiding any further deterioration of public finances; (ii) strengthen the pace of budgetary consolidation from 2010/11 onwards to ensure a rapid correction of the excessive deficit; (iii) define a fiscal framework consistent with an improvement of the long-term sustainability of its public finances".
It also notes the following:
"After the expansionary fiscal measures in 2009/10, the UK authorities plan some consolidation from 2010/11 onwards, but there are risks to the achievement of this consolidation and the deficit in 2013/14 would still be above 3% of GDP. Improvements would depend on a significant economic recovery as well as the achievement of spending targets. The debt ratio, which was close to 40% of GDP in 2007/08, is now expected to rise to almost 70% of GDP by the end of the programme period".
And this, it must be said, is taken from the fantasy document submitted by the Treasury in December. I say fantasy, as it is, inter alia, assuming that the recession we are in will be less severe than the last two, and in 2011 the economy goes into fifth gear. Micawber-ish, Pollyanna-ish or just mendacious?
Look at the chart on page 12 of the document:
It also notes the following:
"After the expansionary fiscal measures in 2009/10, the UK authorities plan some consolidation from 2010/11 onwards, but there are risks to the achievement of this consolidation and the deficit in 2013/14 would still be above 3% of GDP. Improvements would depend on a significant economic recovery as well as the achievement of spending targets. The debt ratio, which was close to 40% of GDP in 2007/08, is now expected to rise to almost 70% of GDP by the end of the programme period".
And this, it must be said, is taken from the fantasy document submitted by the Treasury in December. I say fantasy, as it is, inter alia, assuming that the recession we are in will be less severe than the last two, and in 2011 the economy goes into fifth gear. Micawber-ish, Pollyanna-ish or just mendacious?
Look at the chart on page 12 of the document:
Labels: the recession
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on Wednesday, February 18, 2009 at 4:51 pm.
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Even by picking up a newspaper once in a while, the government knows that their predictions are shot to pieces.
Expect an almighty humiliation for Alistair Darling at this year's budget.
"EU in gets it right for a change choc!"
Do you think the EU will be providing the loans this time around or will it be the IMF again?
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