Is the Greek economy different from the UK?

Therre are senior Greeks who think Europe owes them a living. They seem to think they have a right to spend far too much on their unhappy and poor performing public sector and then to ask the Germans to pay the bills.Their efforts so far to cut spending and set out a course to get their deficit down have not won the confidence of the world’s money lenders. Their public sector workers object to pay cuts, when that offers them a much better way forward than wholesale redundancies. They have protested about doing what many in manufacturing industry around the wrold have had to do to survive over the last two years.

In the UK the government seems to think the world owes it a living. The administration thinks it can carry on borrowing, with the global money lenders happily paying the bills for the excess public spending. The main difference between Greece and the UK is that Greece belongs to Euroland and expects the EU to bail it out, whilst the UK is outside, and can put off adjustment a bit by devaluing its currency.

The numbers for Greece and the UK look very similar. Our public borrowing if properly stated is very high, higher than Greece’s. Both countries are attempting to borrow more than 12% of their GDPs this year and had hoped to carry on with high levels of borrowing in the following years. Both are now claiming to be ready to slash their deficits in future years, without clear and convincing plans on how. The UK’s devaluation has eased some of the pressures on the private sector, but has made the plight of the public sector worse as that sector imports a lot and exports very little.

Yesterday I asked the PM a simple question – Why, uniquely amongst advanced economies, has the UK got an inflation rate well above target and rising rapidly? It should not have been a difficult question for him to answer. After all, yesterday the Bank of England attempted to deal with its inflation critics by forecasting and promising a collapse in inflation again later on this year after the spike. Instead I was treated to an irrelevant rant based on his caricature of my policy recommendations. He failed to mention inflation or the state of the banks. No wonder people have so little confidence in this Parliament when we cannot have a sensible discussion of whether our inflation rate matters or not, and whether it will subside or if it could get another boost from further devaluation.


  1. Duyfken
    February 11, 2010

    I don't know if Brown appreciates that there are also others, outside the House, who want straight answers to questions such as yours.

    I am ignorant of House procedure but wonder whether at PMQs the PM is obliged to answer or may do so only at his discretion.

    If the latter, why bother to ask any question in the first place, unless to show us, yet again, what an incompetent he is – but we all and already well know this?

    If the former, what is the procedure to enforce the obligation? Should not the Speaker take him to task, and if the Speaker fails to do so, can you (&/or the opposition Party leaders) not raise a point of order or later make effective remonstrations with the Speaker?

    1. Mark
      February 11, 2010

      Once upon a time a question could be followed by a supplementary question from the same MP, which allowed an answer to be challenged – or a different topic to be raised by way of ambush, because only the initial question wasa printed in the Order Paper. Now all the supplementaries go to the party leaders. Maybe Cameron should have kept a supplementary back for as piercing a question as JR's yesterday, but the rules probably no longer would allow that. Perhaps we need to go back to the old format.

    2. A.Sedgwick
      February 11, 2010

      Exactly – Cameron yesterday kept asking the same question to no end. The previous Speaker was weak and this one has not stamped his authority on the Commons. I am beginning to think we need e.g. an irascible high court judge as Speaker, any elevated MP these days seems to carry too much political baggage.

    3. eeyore
      February 11, 2010

      The House relies on the Speaker to keep answers relevant to questions. How far the present Speaker – or the last one – may be so relied on is apparent to all. If it is painful to the rest of us to see the depths of its recent degradation, how much more so must it be to genuinely honourable Members such as Mr Redwood. One can scarcely imagine how he has the heart to continue in it.

  2. alan jutson
    February 11, 2010

    Yes I listened To PMQ as well.

    Quite honestly this fiasco that planted questions are always answered with a swipe at the opposition. That opposition questions are never answered at all, but instead statements made about other things, is all just a bloody waste of time.

    I can think of no better advert to turn people away from Politics in general, and Politicians in particular, than this once weekly show of absolute nonesense.

    The sooner we reduce the number of MP's the better, the sooner we curtail blatent Party politics, the better.

    We have a Country deep in crisis, much of our (Politicians) own making.

    We have people in power in a position of massive influence over Policy, who have never run anything in their lives before, let alone having any experience of a particular Department.

    We have a situation where Ministers who run massive Departments are only in the job for a couple of years at most, before being shunted around to head up something else, its like a giant game of musical chairs with name calling, its pathetic.

    We have a Supposed Democratic System of Government where the Governing Party have had a hidden Social engineering Policy for years, which is being implemented without any form of honesty, on a vast scale, for personal Political power.

    Parliament has now sunk to such a low level that I really do wonder if it can be fixed.

    Perhaps it would be better the scrap the lot with a revolution, and start all over again.

    As you can see I am rather p….d off today, and absolutely fed up with seeing our Country rapidly going down the tubes, whilst our so called representitives play silly games in public with not a clue of how to sort this mess out.

    Sorry John, I know you are trying, but it just aint working is it.

    1. Cliff
      February 11, 2010

      I have suggested a couple of times to John in private Emails, (He is my MP) that the Conservative Party should boycot PMQs until or unless Mr Brown answers questions posed….This boycot would get the media talking and show we are serious about making parliament and our presidential styled PM accountable….PMQs has become little more than a pantomime at best or a Labour Party political broadcast at worst….I suppose Labour feel that, given their party’s financies are in a similar state to our nations ones, it is cheaper to turn PMQs into a party political broadcast rather than pay for airtime and media time.
      Imagine the scene, Mr Brown talking to a half empty commons; That would be dynamic!!

      1. alan jutson
        February 11, 2010


        Yes John is my MP as well.

        My thoughts are similar to yours, see my response to Pearls comments, but have a little more Drama.

        1. alan jutson
          February 11, 2010

          Sorry should read Steve Pearls comments.

      2. Chris Mellish
        February 12, 2010

        May I suggest an alternative strategy. Each and every Conservative MP that is selected to ask a question should ask the same question of Brown until he gives a proper answer. Dave should select the question he'd like answered, ask it, and then let each of his MPs ask the same question.

        Once Brown has given a satisfactory answer then Dave can ask his next question.

    2. Robert K, Oxford
      February 11, 2010

      It's hard to disagree with any of this, apart from introducing a note of optimism. What if, and just think about this for a moment, what if the docile majority of the country wake up to the reality of our constitutional settlement; what if they recognised the gross immorality that lies at the heart of excising more than half the income of working people and wasting it to the benefit of a political elite? Of the illegitimacy of state aggression in places where we have no business? Of demonising enterprise and success whilst sponsoring poverty? Of trampling on inalienable liberties in the name of security, which is only at jeopardy because of the arrogance of our political leaders? Then perhaps there will be a revolutionary shift of the type that would make 1979 look minor. Dan Hannan has been blogging about the Boston Tea Party. But how about this: how about not voting at the next election. How about telling the political elite that we are sick of their games and see how they get on trying to form a government with only 10% of the people having turned out to vote? Then we’ll see constitutional reform of a type that really has some virtue.

      1. alan jutson
        February 11, 2010

        Robert K Oxford

        Brown would just carry on and say he got the most votes, he is that arrogant.

        1. billy
          February 13, 2010

          And IGNORANT.

      2. NotaSheep
        February 12, 2010

        The problem is that much of the UK population have been fed a diet of mind-numbing reality shows, celebrity gossip and football for so long that they are pretty much indifferent to politics – 'I don't do politics'. 30+ years of Comprehensive education and the accelerated dumbing down of education over the last 13 years have also helped create an electorate all but incapable of understanding quite how badly Labour have screwed the UK economy and society.

  3. Johnny Norfolk
    February 11, 2010

    For Greece read Labour government.

  4. Colin D.
    February 11, 2010

    Why has Question Time in Parliament been allowed to degenerate into this circus where it is all about scoring points and ridiculing one's opponents and the question gets lost in the noise and never gets answered. All this represents a further devaluation of Parliament and democracy. Surely the Speaker has some responsibility to ensure that sensible questions are given a proper response? If this is not within the Speaker's remit, then this is something for Cameron to lead by example and sort out in the next administration.

    Reply: The Speaker has no power to make a Minister answer. Only Parliament can do that, by for example tabling a motion to demand a better answer. That in turn requires a majoritry which is usually unavailable as many Labour MPs agree with the policy of non answers.

    1. A.Sedgwick
      February 11, 2010

      Yes, but he could make his displeasure felt and for example only call opposition questions for a time.

    2. John Maynard
      February 12, 2010

      Wrong actually.
      An informed and responsible media could very easily force Brown to answer questions seriously.
      Unfortunately, the whole media seems to have been subverted by a sustained Labour campaign to 'befriend' and suborn them.
      Murdoch is busy playing both sides against the middle and is instinctively a Labour sympathiser, the BBC is far beyond the pail, Dacre has plunged the Mail into new depths of Brown/Balls sympathising silliness, the Telegraph has been turned by the Barclays into an anti-Cameron pamphlet, with the Spectator not far behind.
      None of these once-respectable organisations have much interest in calling Brown to account.

  5. Simon D
    February 11, 2010

    Who would have thought it? Nobody who voted in the EU referendum in the 1970s would have believed you if you had said that 35 years later one of the unintended consequences of membership would be English taxpayers enjoying the privilege of bailing out Greek public sector workers who refused to change their working practices in their own country's economic interest. I suppose it all depends on what the French and Germans wish to do. The Prime Minister wants us to 'punch above our weight' in the EU, so if the Greek bailout is adopted by the two EU Managing Partners he will be first to step up to the plate in Brussels and support them.

    I also think Conservative MPs should consider boycotting the House of Commons in the run up to the election. I am not surprised the Prime Minister treated you with contempt and, by proxy, treated voters with contempt over a question on inflation. Ranting is not a healthy occupation in a democracy. Many voters prefer to see questions answered with reasoned argument. The Prime Minister and Mr. Mandelson have devised a number of basic rants for election purposes. For example:

    Rant 1: Tory cuts will end with doctors, nurses, teachers and fire fighters begging for change in the streets.
    Rant 2: Making cuts now will plunge the country back into recession condemning millions to be out of work.
    Rant 3: The Tories opposed the Government every step of the way in the great initiatives brought in by the Prime Minister to solve the credit crisis.
    Rant 4: Apart from a tax on bankers the banking system is well structured and no reforms are needed.
    Rant 5: The Tories were against all the great work which the Government has achieved relating to jobs, schools, policing, the health service etc. Don't elect them. If you do the schools will fall down, the health service won't treat you and all kinds of undesirable consequences will ensure.

    To save us listening to the Rants perhaps Mr. Mandelson should transfer the text to electronic 'rant boards' which could be displayed in the House of Commons Central Lobby. When the next rant was required all Mr. Mandelson would need to do would be to press a button and the appropriate rant could be displayed on the board.

    I don't think we need rants. We need an election and we need it sooner rather than later.

  6. waramess
    February 11, 2010

    Gordon is a ramant Keynesian; spend and consume policies dominate whilst your policies would be reduce debt and save to invest.

    Gordon will take on more and more public debt so long as the man in the street is not spending and he will consider private sector savings to be evil and to be punished. He will also be puzzled that notwithstanding a weak pound his export led recovery is not happening.

    But you know all this so why do you ask Gordon such questions?

    And whether Britain is another Greece? well you know the answer to this also and the answer is no, it is a very much bigger problem and will be left to the IMF to sort out. Didn't the EU tell us that we were stupid to stay out of the Euro? Just think, we might have been responsible for its collapse.

    1. billy
      February 13, 2010

      He is madder than a cut snake – should be keel-hauled – AND, just in case he survives constrained in a straight-jacket

  7. David Cooper
    February 11, 2010

    The response to your question at PMQs really scraped the bottom of the barrel – personal abuse fuelled by anger in the full knowledge that he had been asked something unanswerable unless he were to concede that he and his government were at fault. I suggested on ConHome yesterday that it was a disgrace that the Speaker did not pull him up on that, but with hindsight it may of course be more constructive to let outbursts like this speak for themselves.

    1. Elizabeth May
      February 11, 2010

      Brown showed even more rudeness to you than to Cameron, we need you on the front bench so you can get to him even better.

      1. alan jutson
        February 11, 2010

        Elizabeth May

        Brown showed more rudeness to JR because he cannot pull the wool over his eyes on financial matters.

        In a straight debate over finance, JR would win hands down if the chairman made them both answer questions.

        We are fortunate that John is one of the very few Mp's who has a good grasp on financial matters, thats what makes it all the more worrying that he is not on the front bench.

  8. Steve Tierney
    February 11, 2010

    I blame Bercow. It is within his remit to insist that the Prime Minister at least makes *some* attempt to answer questions he is asked.

    PMQs has always been used as a joust and I'm fine with that – but the current practice of answering nothing and using every question to launch an (often unrelated) attack on the opposition is, frankly, taking the mick.

  9. Ian Pennell
    February 11, 2010

    Dear Sir John Redwood

    I find your daily topics to be precise, spot-on and very relevant to the problems we face in this country. How sometimes I do wish it was you leading the Conservative Party (although I do concede that David Cameron has done a lot to make the Conservatives electable again). You have a strong narrative and some concrete solutions to the major problems facing Britain at the moment, high taxes, huge debts and the threat of inflation.

    This brings me back to sir David Cameron. All Conservative grassroots want to see him showing a bit more courage, to be willing to endorce policies that might make two million quangocrats, civil servants (and a few very rich bankers), hate him in order to be sure of sealing the deal with over 25 million taxpayers! The huge £100 billion of waste identfied by the TPA, the possibility of utilising private income streams for some of public sector funding (i.e shops in schools and hospitals paying rent), and the opportunity to impose a small Robin Hood (Tobin) tax on the massive money transactions that occur in cyberspace between investment banks all add up to some very rich pickings!

    Over £200 billion could be raised, we could eliminate the budget deficit at a stroke and provide deep tax cuts for millions of struggling families and small businesses! How come no-one in the Conservative Party seems to notice the huge electoral goldmines waiting to be tapped?

    Incidentally, some of the correspondence on your blog cast doubt about the Robin Hood Tax. It is a very small percentage of the total of the HUGE amounts of money floating around in cyberspace between investment banks. They will charge each other the special VAT on the obscenely rich, I do not think it will damage pension funds or make the high street banks charge extortionate rates to customers. If that happened, legislation could surely be brought in to stop that happening. Nor, incidentally will this tax damage the City, at least not if we commit to reducing the top rate of tax on high earners!

    Ian Pennell

    1. Mark
      February 12, 2010

      I'm amused that you consider £200bn a "small tax" – it's about the same as was raised by income tax and corporation tax combined last year. I think people might notice if they were asked to pay double income tax without any offsetting tax credit, don't you?

  10. Pete
    February 11, 2010

    I am an avid follower of politics and regularly tune in to PMQs.

    I can't remember Brown ever answering an opposition question straightforwardly but he regularly asks Cameron questions. Surely the Speaker can pull him up for that behaviour?

    I would love to hear Cameron saying words to the effect of

    "As the Prime Minister does not answer my questions, I have decided not to ask any." – and then leave the Chamber (preferably followed by the rest of his party).

  11. Tony E
    February 11, 2010

    I think it might be time for the Conservative party to stop asking questions a PMQ's

    It might be more intelligent to either sit in respectful silence while the PM answers the questions he would have answered anyway – i.e. the planted ones, and offer nothing at all. This silent protest might help to make the country more aware of how futile it has become over the last ten years to attempt to bring the over mighty executive to account in the house, and Labour's contempt for the parliamentary process.

    Alternatively, the opposition benches could be left empty – and the protest could be held outside the house (if that is not illegal under the anti terrorism legislation).

    I wonder if the BBC would mention it – or would they just show the government benches and try their hardest to ignore it?

  12. Sally C.
    February 11, 2010

    In the period running up to a general election, does the party in power have to give a certain number of weeks notice of the actual date? When is the very last possible date, (because that is when it will be)? The main difference between us and Greece is that we have a General Election looming and the chance to eject this lot. The Greeks, in their ignorance of economics and financial stability, voted for another Socialist government. To be fair, they saw how corrupt and incompetent their previous government was and voted for a change. Some Greeks may see that the Euro has been a disaster for their economy but many will have no idea about that. Therefore they cannot argue coherently for a withdrawal from the Eurozone. That is the only long term answer for Greece, unless they want to be run by Berlin. Carl Mortished in an article in today's Times says, ' This is Germany's moment. Berlin should unroll its beach towel all over Greece.' A lot of Greeks must be wondering why they ever fought the Germans in the Second World War.

    February 11, 2010

    Keep on going into the breach John , you are winning .

  14. Breaker
    February 11, 2010

    Brown's inability to answer questions really should be better policed by the Speaker.

    Cameron should draw attention to the fact by asking a few simple questions which have a yes or no answer ("Is your wife's name Sarah?", "Is today Wednesday?"), then following up with a proper question ("is the UK going to give money to bail out Greece, yes or no?". Then appealing to the speaker that Brown clearly has the ability to answer yes or no when he begins his prepared offtopic bluster.

    Ah well, I can dream…

  15. oldrightie
    February 11, 2010

    The PMQ scenario just epitomises the whole shambolic and partisan nature of Brown and Labour. As for Greece, their leaders knew they could blackmail The EU over the euro's ability to survive. This enabled them to do Browneconomics of massive borrow and spend to buy votes. It works for awhile.

  16. Rare Breed
    February 11, 2010


    He caricatures you because he fears you. In his heart he must know that the Keynesian experiment is well and truly over.

    Rather than treat Macro-Economics as a science it is treated as a philosophy where the fundamentals of economics are treated as changeable and fluid.

    The fabian society founded the London School of Economics, not to see how to improve the lot of the poor through economic planning but to find a way of making Economic theory fit their socialist/Marxist ideology.

    To them the ideology is more important than the reality, the motive more important than the outcome. This has be demonstrated time and again with every socialist state, where any failings are the fault of some other individual or system, never taking responsibility for failure because in their minds the political philosophy they hold so dear can NEVER be wrong.

    1. peter soakell
      February 14, 2010

      I read this comment and it is straight- visually as well as in action. I sound like a nut I know, but the 'prime minister' is a total embarrasment.

  17. Mark
    February 11, 2010

    I was interested to see that one of the way in which Greece has borrowed off balance sheet was via a swap at off-market exchange rates according to Der Spiegel – debtsprung duerch Goldman sucks? It makes a change from PFI.

    Whilst the Greek government debt position is somewhat similar to ours, they are much less exposed to the effects of a property bubble than we (or Spain) are. I'm finding it hard to get any data on their banking and business sectors, but I suspect that ours are in much deeper debt than theirs. In short, our financial position is probably worse. The only advantage we have is that our labour force is much less strike prone – at least so far. We have to hope that the Greeks don't resort to inventing spats with Turks as they have in the past to distract from domestic problems.

    UK inflation has the increase in VAT built in to it for the next 12 months (assuming no further changes in VAT rates – which in any event are unlikely to decrease). We know there is a tsunami of further inflation coming down the supply pipeline, especially now that there has been some de-stocking within it, so imports at higher prices will show up in the final marketplace sooner unless there is a dramatic collapse in demand again.

    If the BoE is forecasting a fall back in inflation that can only come from significant monetary tightening. True, they have told the CML that their members will have to try to borrow the £300bn being lent to them to prop up their mortgage books (or get the mortgages paid down to that extent) on time. They are also pretending that there might be an attempt to sell some gilts rather than fund them via QE. But perhaps all these considerations will be masked by a Euro crisis and the consequent contagion, as Brown clings to the dispatch box claiming it started in Athens this time. It's obvious he has lost his marbles.

  18. David B
    February 11, 2010

    Like any household or business, a country cannot live beyond its means indefinitely. This is a point that this government has failed to understand, along with the governments of Greece, Portugal, etc.

    We have a number of problems building up, the most pressing is the way the government have hidden the full extent of the deficit by not including certain figures, especially the cost of bank bail outs. Inflation comes next on the list. The Bank of England has produced an inflation forecast that is an inverted V shape, but this appears to be dependent on a growth rate that will be virtually zero for an extended period.

    This raise the next question of how this growth rate compares to the Treasures growth rate and what is the impact on the budget deficit if the Bank of England are correct. Leading directly to the next question of how will the deficit be financed.

    We can go and on with a list of interlocking questions, but the basic problem still stands, we are living beyond our means and if we do not stop soon the crash that is coming will be all the worse.

    Which nicely brings up the subject of Greece. The decision to bail out Greece raises a number of important issues. Will the whole EU be asked to undertake the bail out or just the Euro Zone countries? Will the EU allow the IMF into the Euro Zone? Which countries will be asked to contribute to any bail out and what message does that send to countries looking to join the Euro? (It pays not to be prudent!). If the EU as a whole bail out Greece, the UK will have to contribute, but we will have to borrow the funds (along with all other countries in the EU). Effectively we will be swapping borrowing in Greece for borrowing by other countries. This leads directly to the final question on Greece, if there is a bail out either by the whole EU or by the Euro Zone, does that mean we are effectively in a Political Union?

    These are not easy questions to answer but the answer will indicate the strength or weakness of the support for political and monitory union, both from politician, who may try everything to keep the Euro together, and the general population who may yet get a chance to decide for themselves.

    The final issue is a desire by this government to hold on to power at all costs. PMQ’s show this to its full extent. Gordon Brown refuses to answer questions as he refuse to accept that anyone else has a legitimate point of view. Hence the personal comments about you rather than addressing the real question. I believe Alastair Campbell and Peter Mandelson developed this idea of the personal attack to deflect policy questions. It can be summed up in the phrase “Play the man not the ball”.

  19. constructive interfe
    February 11, 2010

    If the speaker doesn't have the power *and* the inclination to call out MPs for blatant evasion and qualid party politicking, how do you, John, or anyone else, for that matter, expect to get a straight answer from someone as pathologically arrogant and hostile as the Prime Minister?

    If the process is loaded against meaningful debate, it is the process that should be brought kicking and screaming into the light, without delay.

    Have you thought about raising this issue with the Speaker? Is it within his powers to take a more active role in disciplining MPs who do not answer in good faith?

    Really, this isn't, or shouldn't be, asking too much of anyone in Parliament.

  20. Demetrius
    February 11, 2010

    This is a government of (people of questionable character -ed) The mess now may be too big to sort out. The irony would be if the electorate were so disaffected that somehow Labour creep back into power. We would be back to 1929.

  21. Javelin
    February 11, 2010

    I wouldn't worry too much the markets will bring the UK to its knees if it looks like Brown will get even close to a hung Parliament. A message will be sent loud and clear from trading floors around the world that New Labour is Dead Labour.

    1. billy
      February 13, 2010

      Absolutely – SPOT ON.

  22. Steve Pearl
    February 11, 2010

    Like most people I do not really understand the arcane nature of the debating protocols of The House of Commons.
    But it does seem to me that surely anybody in The House can raise a "Point of Order" with The Speaker at any time (after all isn't adjudicating on procedure what a speaker is for?).
    Therefore given the pathetic rants against The Opposition which pass for answers in The PM's mind, isn't it legitimate for Mr Redwood (or anyone else) to raise a Point of Order with The Speaker and publicly, for the record, ask The Speaker to direct The PM to give proper answers to the questions asked.
    Now Speaker Berkow would probably slap the questioner down in some way, but at least the issue would be out there formally, and, who knows, some of the media might even report and comment on it.

    1. alan jutson
      February 11, 2010

      Steve Pearl

      I do not understand why Cameron does not use a very, very simple tactic.

      Ask Brown a very simple question that requires an absolute yes or no answer, and if he will not answer, then make a statement that if the Prime Minister will not answer questions at question time, then there is absolutely no point in being present, and the whole of the Conservative party walk out.

      I guarantee it will make headlines on the News and in all of the papers and may at least strike a point for Democracy.

  23. A Griffin
    February 11, 2010

    I also watched PMQs. It was a verbal brawl. I'm glad both you and David Cameron can face it on our behalf. Mr Brown's body language was very bad. He lectured and hectored us with agressive hand movements and alternating between a supercilious or angry face. He was very off putting. You asked your question for us, and for the good of the country, and I am grateful. I hope you don't mind me saying that the glasses soften your face and should be kept on during interviews. What would happen if all the Conservative MPs didn't turn up? Passive resistance can be very powerful if you are being bullied and the media would notice.

  24. Norman
    February 11, 2010

    Our economy isn't like Greece's in one regard – they are now being forced to tackle their problems, our heads are still firmly in the sand.

    As for the Prime Ministers regular non-answers, he surely must realise when he pulls this that no sane person is falling for it, the oh-so-coveted floating 'independent' voters must be getting turned off in their droves at this sort of stuff. Waiting for a straight answer to a straight question then getting treated to a Brown special. Does he not share the worries of the people he is representing or does he simply have no capacity to admit that anything he has ever done has been anything except 100% correct?

  25. Lola
    February 11, 2010

    I heard about your question and Brown's (non) answer. What gets right up my nose is that Burkhow doesn't pull him up and make him answer.

  26. Lindsay McDougall
    February 11, 2010

    See my response to your blog “Watch the pound”. Both the Chancellor and the Govenor of the Bank of England use neo-Keynesian modelling and believe that GDP growth will soon rebound to 3.5% pa. This is because there is spare capacity in the UK economy.

    I simply don’t buy the arguement. The recession has been a once and for all CORRECTION, resulting in GDP growth being 9% below the 2% pa trend line over an 18 month period. I doubt if GDP growth will rebound to more than 2%. If it doesn’t, inflation will stay high.

  27. Brian Tomkinson
    February 11, 2010

    As you say we are in no better shape than Greece except that our government and BoE can preside over devaluation and stoke up inflation. This, as we know, is under way. When we finally hit the buffers we shall have to go to the IMF not the EU to bail us out. We are not members of the Euro zone. Interesting though that Brown wouldn't specifically rule out any monetary contribution from the UK going to Greece and there is speculation that we will be asked to cough up £3.5billion of money we don't have. Perhaps Mervyn King will print some more just to help out?! The world has truly gone mad.

  28. […] Redwood, Is the Greek economy different from the UK? In the UK the government seems to think the world owes it a living. The administration thinks it […]

  29. StevenL
    February 11, 2010

    I just saw the PMQ response – he doesn't like you very much does he?

  30. Mark Brentano
    February 11, 2010

    Excuse the fact that I am an ignoramus with regard to economics [although that doesn't seem to be an obstacle to my joining the profession] but has Greece gone in for quantitative easing? Can Eurozone countries do that, as we have done? I can't seem to find the answer anywhere.
    An excellent use of PMQs, sir. Please keep it up.

    Reply: Greece has gone in for spending and borrowing too much

    1. Sally C.
      February 12, 2010

      A country can only effectively indulge in QE (or creating money out of thin air) if it is in control of its own currency and has its own central bank. However, it really depends on what end result a government is trying to achieve. If their main aim is to finance their own spending at a reasonable cost ( by getting their central bank to buy their debt with electronically created funds ) it might be possible to achieve this aim even if you are a member of the Eurozone, with the tacit agreement of the other member states.
      For example, one possible result of yesterday's emergency meeting in Brussels could be that there was an agreement that the German or French banks may line up to buy Greek government debt at a price/cost that is acceptable to the Greek government. This would allow the Greeks to issue their debt safe in the knowledge that there would definitely be a buyer for it, at a cost that won't break their economy. We'll have to wait and see.

  31. Martin
    February 11, 2010

    Re. PMQs – it never is perfect but much better than other countries. After the election (with a Conservative majority of 100+) we will doubtless see the flip side of what we have now.

    Re. IMF – folk need to realise that the IMF borrows money from us (amongst others) to lend to others:-
    (apologies if I am not supposed to post links)

    Re. Keynesian -ism I don't regard Mr Brown as any sort of Keynesian. Mr Brown inflated public sector wages in the good times and has no money left to spend on extra infrastructure (roads & railways) in the bad times. For similar reasons (too much spending in the good times) he is no monetarist either!

  32. Russell James
    February 12, 2010

    For all above who are fed up with Browns non answers at PMQ's, please note the reply I got from the speakers office 8th February which states:-

    "the Speaker can only operate within the powers which the House has granted him.These do not include the authority to require Ministers to give proper answers to questions." "Ministers, like other Members,take reponsibility for their own remarks and you may wish to draw your concerns directly to the attention of the Prime Minister."

    Not really any point in having PMQ's ever again is there?

  33. […] View original here: John Redwood MP » Is the Greek economy different from the UK? […]

  34. Brigham
    February 12, 2010

    I have once again written to John Bercow. This time I referred him to this blog (11/2/2010). I, as some others have stated, am sick of just hearing electorial rants from "Brown the Incompetent" instead of the answer to the question asked. This fool of a PM will never answer questions unless he is forced to. It is about time all backbenchers did something about it.

  35. Ken
    February 15, 2010

    People no longer question and answer. They challenge, jab, and left hook.

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