Slowdown of European economies is a serious cause for concern

Ed Balls MP, Labour’s Shadow Chancellor, said in response to today’s EU growth figures:

“The slowdown of a number of European economies is obviously a serious cause for concern. The Managing Director of the IMF, Christine Lagarde, is right to say that ‘slamming on the brakes too quickly will hurt the recovery and worsen job prospects’. The Euro zone urgently needs a plan for growth

“But there is no comfort whatsoever for Britain in these figures. Because while disappointing for many countries they compare favourably with the flat-lining UK economy which over the last nine months has grown by just 0.2%.

“In the same period the Euro zone has grown by 1.3% and the EU as a whole by 1.2%. We have gone from the top end of the EU growth table a year ago to the bottom – with only Portugal of those countries for which we have figures growing more slowly since the autumn.

“The Chancellor needs to recognise that Britain’s recovery was choked off last autumn and well before the problems of recent weeks.

“It would be deeply unwise for the Government to take false comfort by making misleading comparisons of figures for the first six months of this year. As Ministers know well the 0.5 per cent growth we saw in the first quarter of this year merely made up for the 0.5 per cent contraction at the end of 2010.

“The evidence for George Osborne’s claim that Britain is a safe haven has collapsed and his dangerous complacency is being exposed. That is why the Chancellor should take heed of the IMF’s latest advice.

“He needs to realise that tax rises and cuts which go too far and too fast have crushed confidence and seen our economy flatline since last autumn. His reckless and incautious policies have left Britain vulnerable in the face of the global economic problems we are now seeing. And without strong growth and more people in work the government will find it much harder to get the deficit down.”

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Posted August 16th, 2011 by Ed's team