George Osborne has again blamed the double dip recession on the eurozone - the truth, however, is the causes of the recession are primarily domestic.
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George Osborne makes a familiar argument today, seeking to blame the double dip recession on the eurozone. The truth is the causes of the recession are primarily domestic.
In the Sunday Telegraph, the chancellor writes:
“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.”
While Britain’s economy contracted by 0.3 per cent in the first quarter of 2012, Germany grew by 0.5 per cent while both France and the Eurozone avoided recession with a flat economy.
Although trade was a very modest net drain on GDP in the first quarter, this was due to a rise in imports rather than a fall in exports.
The ONS’s most recent trade release found:
“The deficit in trade in goods with EU countries widened by £0.7 billion to £4.5 billion in March, compared with the deficit of £3.7 billion in February, as exports were virtually unchanged at £13.2 billion (up by 0.1 per cent), and imports rose by £0.8 billion (4.4 per cent) to £17.6 billion.”
A much larger contribution to Britain’s double dip recession was a 4.2 per cent quarter-on-quarter drop in gross capital formation, or investment (see Annex B).
• Eurobonds are about solidarity, which is not Cameron’s strong point 8 Jun 2012
• Austerity Isn’t Working • Sparpolitik ist keine Lösung • L’austérité ne marche pas 28 May 2012
• Europe’s right still full-steam ahead on mad dash for austerity 16 May 2012
• Will President Hollande be able to turn France – and the Euro Area – around? 8 May 2012
• Osborne’s ideology-driven economics have failed: We’re all paying the price 25 Apr 2012
Readers should remember that this is not the first time that Osborne has wrongly tried this trick.
No wonder the shadow chancellor, Ed Balls, says today:
“It’s deeply complacent and out of touch for George Osborne to blame Europe for a double-dip recession made in Downing Street. He will fool nobody with these increasingly desperate excuses.”
30 Responses to “Osborne wrong again in passing buck to eurozone”
Anonymous
Primary cause of debt – Your kind pushing out wages for capital, and hiding your money from being taxed properly.
Anonymous
No, he is and has been blaming the Eurozone for the results of HIS policies.
Our consumer confidence is -29. Even the Eurozone is only at -20! The office of budgetary fiddling is a partisan joke, and multiple international organizations, hardly hotbeds of left-wing thought, have been telling him to pull up from the death spiral.
You’re trying to blame the problem, as usual, on anything but the real causes – the Government’s deliberate campaign against growth. For political partisan reasons. When even Belgium, in the period without a government, substantially outperformed the UK despite being a Eurozone member…
BevR
RT @leftfootfwd: Osborne wrong again in passing buck to eurozone http://t.co/9N1NboUa
Ed's Talking Balls
Pretty sure Keynes also advocated running a budget surplus during a boom.
mick hills
Osborne wrong again in passing buck to Eurozone http://t.co/gyVccR2D Come on you know its anyones fault except their mates the bankers