Darling backs debt reduction

British Chancellor of the Exchequer Alistair D...

Image via Wikipedia

FORMER Chancellor Alistair Darling has told media channels that politicians in the Eurozone are standing back while the world slides on the brink of another global recession.


His comments come as Chancellor George Osborne and some of his European counterparts have given struggling EU economies six weeks to properly tackle their debt problems.


Darling’s comments also appear to put a damp squib on the current Labour leadership’s opinion that the UK was cutting too far and too fast, ahead of the Labour conference in Liverpool at the weekend.


The coalition has always insisted cutting the UK debt was essential as part of the recovery process – despite there being barely any private sector growth in the economy.


Labour leader Ed Miliband and Shadow Chancellor Ed Balls claim that the coalition are prepared to risk high unemployment, which now stands at 2.5 million, by cutting the public sector, in order to balance the UK’s finances. But so far the private sector hasn’t been delivering the type of growth UK leaders want, or need.


Nick Clegg said at the Lib Dem Party conference in the week that this slow growth wouldn’t last forever.


Balls has proposed that the Chancellor Osborne should cut VAT to boost consumer spending.


Much was wrote in Darling’s memoirs about his long-standing battles over the economic way ahead with the former PM Gordon Brown – who has so far cutely bottled out of the public limelight when it comes to the economy.


Darling claimed he was arm-wrestled into following Gordon over UK spending and borrowing. According to reports, Tony Blair also backed down – despite his fears that Labour spending was spiralling out of control when he was PM from 1997 - 2007


Economists claim it is inevitable that the global economy will fall back into a recession.


What politicians should try to do they say is prevent the crisis from falling from a recession into a depression like the 1930s.


Darling in his comments also said that this was very current, and not 30 years ago and needed tackling now.


Yesterday the IMF chief Christine Lagarde more or less echoed Darling’s comments.


But she also said that there was a path to recovery, but global politicians needed a nudge in the right direction.


It comes also as Greece is on the brink of default, again. Other countries such as Italy are also in the mire.

Enhanced by Zemanta