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Friday, February 19, 2010

Britain Rejoices Over Decline of Euro

The LATimes wrote on February 13:

"It's not hard to find some smug smiles in Britain these days as the rest of Europe grapples with a debt crisis that has cast doubt on the future of the euro. This island nation has fiercely resisted adoption of the single regional currency and has clung to the pound as a symbol of tradition and independence.
"Before a summit of European Union leaders this week, his usual Scottish dourness barely succeeded in masking Prime Minister Gordon Brown's schadenfreude when he declared that the euro's problems were for euro-using nations such as France and Germany to solve, not British taxpayers.
"But Britain is in no position to sit back and relax, much less crow, analysts say, not when its own economy is still in such shaky condition, its credit rating in danger of an embarrassing downgrade and its government sinking deeper into debt.

"The global downturn has hit Britain particularly hard, in part because of London's status as an international financial center. Britain's was the last of the major economies technically to emerge from recession, and that only barely: It grew by a tiny 0.1% in the final quarter of last year, and economists fear it could just as easily start contracting again.

"Like many other countries, including the United States, Britain went on a spending spree to stimulate demand during the recession's darkest days, funding infrastructure projects and cash-for-clunkers-style rebates. And as elsewhere, that has compounded a budget deficit now at a level not seen since World War II.

"In fact, as a percentage of gross domestic product, Britain's yawning deficit is close to that of Greece, whose 12.7% shortfall triggered the euro crisis. Athens' deficit is more than four times the prescribed limit for countries in the so-called Eurozone and investor panic over a possible default has hammered the euro's value...
"Just as Greece has unveiled an austerity plan to get its finances in order, Britain must soon bite the fiscal bullet as well. Exactly what and how deeply to cut is already shaping up as the dominant issue in the national election that must be held by early June. The opposition finance spokesman, George Osborne of the Conservative Party, caused a minor stir in December when he said that Britain might be on the same path to misery as Greece...

"As for Greece, Britain may yet be on the hook for bailing it out, despite distaste for the idea. If the EU as a whole, instead of just the Eurozone, decides to give credit assurances for Athens or to issue EU-wide bonds, then British taxpayers will have no choice but to be involved because Britain remains one of the 27 EU member states."

In addition, BBC News reported on February 17 that the "UK inflation rate rose to 3.5% in January - the fastest annual pace for 14 months - from 2.9% the month before." And Times on Line added on February 18 that "The [British] Government is on course to run up a higher budget deficit this year than Greece after dire figures on the public finances today showed that it borrowed £4.3 billion more than it received in taxes in January, the first time this has happened."

This information is courtesy Church of the Eternal God.

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