IMF says Britain must relax austerity if eurozone crisis escalates

Thrugelmir

Who is going to take Christine Lagarde seriously when in December 2009 as Finance Minister of France she said:-

"The euro area is a monetary zone of complete solidarity".

Hardly instils confidence now that she is IMF managing director.

No wonder the BRICS would prefer a non European or American in charge.

de1amo

precisely my point--she is completely incompetent in charge the İMF that lost credibility when her predecessor was cynically removed by 'american approval'

The_J

Hang on, the French Finance minister couldn't well come out with "The Euro is a basket case and Greece shouldn't even be in it". Especially not in 2009, a lot has happened since then.

I'm no fan of hers but if that is the worst you can find on her then maybe she isn't too bad.

Dominique Strauss Kahn was a nasty piece of work that deserved everything that came his way.

Thrugelmir

The_J wrote: »

Hang on, the French Finance minister couldn't well come out with "The Euro is a basket case and Greece shouldn't even be in it". Especially not in 2009, a lot has happened since then.

Has it? Or did the those in charge not want to voice their real opinions.

Took Blair 6 years to publicly admit he should have stood up to Brown and curtailed Labours spending plans.

ILW

Apparently there have been 18 "make or break" crisis meetings redarding Greece so far.

The EU leaders truly could not organise a pi55 up in a brewery.

chucky

Thrugelmir wrote: »

Who is going to take Christine Lagarde seriously when in December 2009 as Finance Minister of France she said:-

"The euro area is a monetary zone of complete solidarity".

Hardly instils confidence now that she is IMF managing director.

It doesn't instil any confidence at all that it was George Osborne and David Cameron that pushed for Lagarde to get the role.

David Cameron has backed Christine Lagarde's bid to be the next head of the International Monetary Fund.

Ms Lagarde, is the overwhelming favourite in the race to succeed countryman Dominique Strauss-Kahn, who quit to fight charges of attempted rape in New York.

'We strongly support her and we think there is a good case for maintaining European leadership at this difficult time,' he said.

grizzly1911

The_J wrote: »

No, your mates in the unions killed manufacturing in this country. The world was changing but the champagne socialists couldn't see it.

That's the difference between us and Germany, the unions in Germany accepted change.

It's clear you voted Labour, if there was an option more left of that you probably would have chosen it. Interesting that you call me a bigot though, didn't your man Gordon "worst PM of all time" Brown get in trouble for similar vocabulary?

If I am a bigot for despising people who sit on their !!! all day claiming benefits then I will wear that moniker with pride.

So I am now a communist and a union activist too.

Couldn't be farther from the truth but keep dreaming.

Oh and I have never claimed benefits in my life.

oldvicar

pqrdef wrote: »

To reduce debt, you have to achieve a budget surplus. This is hardly ever done, and then only for odd years. A sustained budget surplus may as well be viewed as impossible, so the debt isn't going anywhere.

Doesn't matter, because a more sensible target is debt as a fraction of GDP. The debt/GDP ratio peaked at 250% after the war and fell steadily to 50% over the next 2 or 3 decades. This was done not by reducing debt but by increasing GDP.

So economic growth is actually the key to managing debt.

The fall in debt/GDP ratio from 250% to 50% was in "real" not absolute terms. Yes we had a lot of real growth but a lot of the heavy lifting was done by inflation.

Economic growth in GDP is usually quoted in real (after inflation) percentages. But real GDP could remain static and the debt/GDP ratio would fall by dint of inflation. We don't actually need a budget surplus, we just need to stop adding to the debt faster than inflation erodes it.

Economic growth would be really nice, and is nice for politicians to talk about. But it is not the key to managing the public debt. Debt/GDP ratio will be halved, and therefore the economy will be much better, just as soon as prices have doubled. This will happen. It will be done. The worry of course is that it could so easily be overdone, and then we would be really stymied.

oldvicar

grizzly1911 wrote: »

... Why do we need 42? police forces?
...

For local accountability.

But more to the point why do they cost so much. Have you seen your council tax bill and how much goes to the police? That's just the half of it - literally, due to central grants.

To paraphrase the slogan from the recent police federation conference :

20% cuts to police budgets? It would be criminal not to !

pqrdef

oldvicar wrote: »

Debt/GDP ratio will be halved, and therefore the economy will be much better, just as soon as prices have doubled.

Only if we stop borrowing, The effect of sustained inflation is that, at any given time, most of the debt is recent debt, which keeps pace with inflation.

But we can still beat it with real growth. And as you say, the headline quarter-on-quarter percentage growth figures are inflation-adjusted and represent real growth, over and above the inflationary increase in GDP.