Brown punts global balancing act plan
November 24, 2009
By Adrian Croft London
UK Prime Minister Gordon Brown, aware that his chances of re-election might hinge on Britain's economy emerging from recession, yesterday called for a global growth strategy to tackle trade and currency imbalances.
This strategy should also deal with the inefficient use of reserves and instability in oil prices and would agree on the contribution to higher growth that each continent could make, Brown said.
"If we are to have balanced and sustained growth that will keep unemployment low, we will have to address together - and my chosen vehicle is the Group of 20 - a strategy for global growth," Brown told the annual conference of the Confederation of British Industry, the UK's leading business lobby.
The International Monetary Fund (IMF) says China needs a stronger yuan as part of a package of policies to help rebalance its economy.
IMF managing director Dominique Strauss-Kahn said that the global economy was in a holding pattern and vulnerable to further upheaval.
Conservative Party leader David Cameron told the conference that investors would doubt Britain's creditworthiness if they were not convinced that the government was prepared to get a grip on public finances.
A poll on Sunday showed the Conservatives' lead over Brown's Labour Party slashed to six points, raising the possibility neither party might win a parliamentary majority in a general election due by June.
That would be the worst-case scenario for financial markets, which fear the result would be a weak government incapable of taking decisive action to cut public sector borrowing, forecast to hit £175 billion (R2.3 trillion) this year.
The Conservatives want immediate action to cut public spending but the government says that could endanger recovery. But Cameron too has begun to speak of a need for a pro-growth budget, as well as a deficit-cutting one, if the Conservatives win power.
Brown said European growth measures could include incentives for private investment, a push on European-wide research and development, and steps to break down barriers to cross-border business.
He promised to keep economic stimulus measures in place in Britain until the recovery was established.
"Choking off recovery by turning off the life support prematurely would be fatal to world growth," he said. - Reuters
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