Osborne wrong again in passing buck to eurozone

Published on Left Foot forward, by blog owner, by Will Straw, June 10, 2012.

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 … //  

… 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). (full text and links to related articles).

Links:

Interview with Greek Writer Nikos Dimou: We Like to Live Beyond Our Means, on Spiegel Online International, June 7, 2012;

Step by Step: Merkel Lowers Expectations for Quick Euro Fix, on Spiegel Online International, June 7, 2012.

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