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EU Commission approves UK Government plans for deficit reduction
Date 08/06/2011 21:53  Author webmaster  Hits 1077  Language Global
8 JUN 2011

Brussels has told the Government to stick to its strategy to shrink the budget deficit, warning against any "slippage" from the planned cuts.

By Emma Rowley | The Telegraph (Europe backs Britain's 'Plan A' for the economy)

The Government should "proceed as planned" with its "ambitious measures to reduce the deficit", the European Commission said.

The instruction is a second endorsement of the Coalition's "Plan A", after the International Monetary Fund on Monday said the UK should plough on with its austerity efforts despite growth turning out weaker than expected.

The Government is aiming to eliminate the structural element of its annual borrowing – the shortfall which remains even when the economy is running at full pelt – by 2015, through a £110bn package of cuts and tax rises.

The debate over whether it should change course to protect growth – possibly scaling back the £81bn of cuts planned over four years – reignited at the weekend after some 50 academics signed a letter calling for the urgent adoption of an alternative economic strategy, or "Plan B".

The Commission, the EU's executive body, did not share that view. "Ensuring no slippage from published spending plans will be vital to re-establishing a sustainable fiscal position," it said.

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