EU backs British action against deficit

6th July 2010, Comments 0 comments

Britain's new government has taken effective action to slash its public deficit although implementing massive spending cuts will be a challenge, the European Union said Tuesday.

"The current economic circumstances call for a decisive fiscal consolidation, while not suffocating the nascent economic recovery," said European Economic and Monetary Affairs Commissioner Olli Rehn.

"The budgetary targets presented by the UK Government are in line with this strategy," he said.

The Conservative-led coalition government presented a tough emergency budget on June 22 that includes tax hikes and spending cuts.

The European Commission, the bloc's budgetary watchdog, said it concluded that Britain had taken "effective action" to bring down its deficit down from 11 percent of output to 2.3 percent by 2014-2015.

"Implementing the planned spending cuts -- including a 25 percent reduction in departmental budgets in real terms on average over a four-year period -- will be challenging," the European Commission said in a statement.

The emergency budget "is closely in line with" recommendations made by the European Union in December, the commission said.

"Provided they are implemented as planned, the measures announced will strengthen confidence in the UK's commitment to putting its public finances back on a sustainable path," it said.

© 2010 AFP

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