EC warns new government over debt

European Commissioner for economic and monetary affairs Olli Rehn
12 April 2012

The new British government must tackle the country's rising debt level as a top priority, the European Commission has said.

Europe's economic and monetary affairs Commissioner Olli Rehn was speaking after unveiling EU economic forecasts which show the stirrings of an economic recovery across Europe.

But the figures also reveal British debt levels are now higher than anywhere else in the EU.

Latest forecasts show UK debt at 88% of GDP in 2011/12, well above the eurozone permitted maximum of 60%.

The UK annual deficit is also running at more than four times the eurozone permitted ceiling of 3% of GDP.

As a non-eurozone country, the UK is not governed by the eurozone conditions, but the maximum debt and deficit figures allowed under single-currency stability rules are seen as a benchmark for all EU member states to stick to.

Mr Rehn told a press conference in Brussels that the newly-elected UK government, of whatever political colour, had to fix a credible and far-reaching debt-cutting policy.

He said: "The first thing for a new government to do is agree on a convincing and ambitious policy programme of fiscal consolidation to start reducing the very high deficit, and stabilise the high debt level.

"This is by far the most important challenge for the new government. I trust that, whatever the colour of government, it will take these measures. It will need broad political consensus to achieve this key goal."

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