Britain’s new finance minister George Osborne, the youngest for 120 years, has made his first major policy statements in the job, launching a new fiscal watchdog, and flagging billions of euros of spending cuts. His first emergency budget will be on June the 22nd, and he has to convince markets quickly that the Conservative-Liberal government knows where it is going.
“This new coalition is founded on an agreement to significantly accelerate the reduction in the deficit – starting this year. This is not about party interest but about the national interest. The advice we have received to from the Treasury and the Bank of England make that clear,” he said.
Most of the cuts will go on reducing debt. The budget deficit is close to 12 percent of GDP, a dangerously high figure similar to Greece. Much harsher cuts will have to be made in the next few years, and the government warns as they go through the books they are finding a host of poor end-of-reign spending decisions made by Labour, so things may be even worse than first thought.