The eurozone crisis has had a chilling effect on major economies around the world; and has added to the unprecedented pressures facing the global economy. But, in spite of the difficulties, I am confident that we can both resolve the crises at hand and come through them with an economy that is stronger and fundamentally fairer. My argument here at home and at the meeting of the Group of 20 leading economies in Cannes is that we can only do so if we show complete single-mindedness on three fronts: confronting our debts; strengthening the competitiveness of our economy; and unlocking global trade. Let me take each in turn.
First, confronting our debts. Those who still argue for an abandonment of our deficit reduction plan should reflect on the journey this country has taken. We went into the bust with the biggest structural deficit in the G7 and came out of it with a deficit forecast to be the biggest in the G20. It is thanks to the credible plan this government has set out that today we have market interest rates of just 2.5 per cent – half what they are in Spain or Italy. Earlier this month, the same credit rating agency that downgraded the US confirmed our triple A rating. This confidence has been hard-won; and it can be easily lost. As Standard & Poor’s made clear, the greatest threat to confidence would be if the coalition’s commitment to fiscal consolidation falters. Businesses, investors and families all over the country can rest assured that we will not falter. We will stay the course.
We need to see that same resolve in the eurozone. The deal forged in Brussels marked very good progress. But in the coming weeks, the vital details need to be agreed – on the reinforcement of the bail-out, the recapitalisation of European banks, and the resolution of Greek’s debt crisis. Forging a clear route forward is overwhelmingly in Britain’s national interest, which is why we will press for more progress at the G20 in Cannes.