'Be bold on austerity', says Cameron

The prime minister's address to the World Economic Forum called for 'bold action'. Was he speaking to the Davos audience or to sceptics back home?

by Emma Haslett
Last Updated: 06 Nov 2012
David Cameron could have been forgiven for being a little pleased with himself during his address to the assembled ranks at the World Economic Forum in Davos this morning. After all, while the UK, admittedly, has no shortage of problems of its own, the eurozone is positively in flames. But while Cameron insisted that European leaders must make like the UK and take a ‘tough’ line on austerity, his remarks might have come across to some as erring on the happy side of smug…

Cameron’s message was clear: it’s a ‘perilous’ time for Europe, and merely ‘tinkering’ with national budgets isn’t going to do the trick. It’s time to be ‘bolder’ – like the UK, for example. We may have had to endure strikes and high unemployment, but at the end of it, the British Government has ‘earned credibility and got [Britain] ahead of the markets’. It’s time, he said, for the rest of Europe to take similarly brazen measures. ‘With bold action and real political will we can fix [our problems],’ he said.

Of course, some may say that that’s a bit rich, coming from the man running a country where only yesterday, figures showed GDP shrank by 0.2% in the final quarter of 2011, prompting a slew of headlines worrying about whether we’re going to sink back into recession or not. Even our Chancellor has resigned himself to the inevitable: during his Autumn Statement, George Osborne warned that there was a pretty good chance that the UK might re-enter recession, albeit temporarily.

But some of the PM’s points were unarguably valid: he pointed out that competitiveness is Europe’s ‘Achilles’ heel’, and that the EU must get to grip with red tape in order to allow it to begin growing again. His demands were pretty exhaustive: ‘Here’s the checklist,’ he started. ‘All proposed EU measures tested for their impact on growth, a target to reduce the overall burden of EU regulation; a new proportionality test to prevent needless barriers to trade in services and slash the number of regulated professions in Europe.’ So not asking much, then. ‘The truth is,’ he added, ‘we can’t afford to wait any longer’. Whether this was intended for the gathered throng, for Government doubters in the UK or for both is unclear.

Punchy stuff, non? One of his particular sticking points was on free trade. Given that the Doha free trade talks have come to nothing, he reckons the World Trade Organisation should abandon them, and a ‘coalition of the willing’ should make a number of ambitious deals with the likes of India, Canada and Singapore by the end of 2012. ‘And why not an ambitious deal between Europe and Africa?’ he added. Why not, indeed?

Cameron also added that the EU’s plans for a ‘Robin Hood-style’ financial transaction tax are ‘simply madness’. That’s likely to go down like a lead balloon with the likes of German chancellor Angela Merkel and French president Nicolas Sarkozy, both of whom have stood firmly behind the idea. Expect there to be fights on the slopes of Davos tonight…

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