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George Osborne: eurozone crisis killing UK recovery

Category: Business

Published: 9th Jun 2012 22:12:38

The UK's hopes of economic recovery are being "killed off" by the eurozone crisis, the chancellor has warned.

Writing in the Sunday Telegraph, George Osborne said European leaders faced a "moment of truth" which could determine the economic future for over a decade.

He added that British businesses were "being held back because of uncertainty about the future".

Labour's Ed Balls said Mr Osborne was making "desperate excuses" for the government's failure to deliver growth.

The newspaper article comes in the wake of an announcement that Spain will get up to 100bn euros ($125bn; £80bn) in loans from eurozone funds to shore up its struggling banks.

BBC deputy political editor James Landale says Mr Osborne has spoken before about the negative impact of the eurozone crisis but never in such stark language - or with such pessimism about the UK's future recovery.

Mr Osborne wrote that treating the "latest symptom" would not be enough to "cure the underlying conditions".

He added: "Our recovery - already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years - is being killed off by the crisis on our doorstep."

The risks for us of a disorderly outcome are huge”

The chancellor continued: "The British government is clear that it is strongly in Britain's interests for our biggest export market to succeed; the risks for us of a disorderly outcome are huge."

He called for greater fiscal integration across the eurozone bloc and said a banking union was a "natural extension" of the single currency.

However, he emphasised that the UK would not be part of any such arrangement and that any further transfer of power from Westminster to Brussels would require a referendum.

Mr Balls said it was "deeply complacent and out of touch" to blame the eurozone for a "double-dip recession made in Downing Street".

The shadow chancellor added: "Despite the eurozone crisis, Germany, France and the euro area as a whole have so far avoided recession while Britain's recovery was choked off in the autumn of 2010."

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BBC News, 2012. George Osborne: eurozone crisis killing UK recovery [Online] (Updated 9th Jun 2012)
Available at: http://www.ukwirednews.com/news/1433649/George-Osborne-eurozone-crisis-killing-UK-recovery [Accessed 29th Jul 2014]

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