UK VIEW:THE EUROPEAN Union must "act now" to save the euro and accept that monetary union requires greater co-operation between euro zone countries over tax and spending rules, according to British chancellor of the exchequer George Osborne.
The euro zone states must act quickly to put in place last month’s deal to give Greece an extra €8 billion to prevent it running out of money within weeks and “resolve the uncertainty” surrounding the country, he said, speaking in Manchester.
“Crucially,” he said, “my European colleagues need to accept the remorseless logic of monetary union that leads from a single currency to greater fiscal integration”.
In a speech delivered before he travelled to Poland for yesterday’s meeting of finance ministers, he said the euro zone has to “send a clear signal that they truly recognise the gravity of the situation and are dealing with it. Time is short. The euro zone must act now”.
“Britain is, of course, not in the euro – and I fought hard with others to keep us out. Let us take no relish at all from their problems – let’s have no schadenfreude. A successful euro is massively in our interest,” Mr Osborne went on.
The lack of growth in the euro zone and in the US – the UK’s two biggest export markets – is hitting global confidence and impacting heavily on the UK’s own bid to restore its finances.
Despite the difficulties, the chancellor said the UK has improved its position in the Global Competitiveness Index by re-entering the Top 10, having gone from 4th in 1998 to 12th in 2010.
“Britain is becoming once again a competitive place to do business.Why? Because we’re tackling the suffocating burden of red tape. In the first half of this year, we scrapped over £3 billion worth of unnecessary regulation,” he said.
Telling small and medium-sized business owners he understood their concerns, Mr Osborne said he had grown “up with one”, watching his father build a home-furnishing business over 40 years.
Growing up, the rhythms of the business’s life and the rhythms of my family life were one and the same. I remember the ups and downs.
“The new orders won. The new collections launched. The excitement when the first sales were made in America. And I know the kind of pressure that you are under,” Mr Osborne told the Festival of Business conference in Manchester.
