New British finance minister Jeremy Hunt will set out tax and spending measures today, two weeks earlier than scheduled, as he races to stem a dramatic loss of investor confidence in Prime Minister Liz Truss's government.
"How's Brexit going?" tweeted veteran Belgian politician Guy Verhofstadt, an ardent pro-European, on Saturday.
"One thing is for sure: the mess didn't start in 2022 but in 2016," he added, in reference to Britain's referendum to leave the EU.
There was a similar hint of schadenfreude in remarks by Spain's Socialist Prime Minister Pedro Sanchez, who slammed Truss's original tax cut proposals as Britain's crisis unfolded last week.
"The neoliberal path failed in the previous financial crisis, created a great deal of suffering and will again lead to failure for those who follow it – as we have just seen in the UK," he told the Spanish parliament.
Truss on Friday fired her finance minister Kwasi Kwarteng to replace him with Hunt, and scrapped parts of the government's economic package after it sparked a financial market rout including a steep dive in the value of the pound.
With the Conservative party plunging in opinion polls, social media has been full of memes and jokes revelling in its woes. "Did you hear Kwasi Kwarteng flew back from the U.S. first class?
Apparently they didn't want him near Business or Economy" read one joke doing the rounds on Twitter in reference to Kwarteng's rushed return from Washington to be fired by Truss.
'BRITAIN THE NEW ITALY'
Outside Europe, U.S. President Joe Biden called Britain's plan to scrap the 45% top income tax rate a "mistake".
Biden, a Democrat, frequently criticizes conservative "trickle down" economic policies, associated in the United States with former President Ronald Reagan and Republicans.
"I think that the idea of cutting taxes on the super wealthy at a time when - anyway, I just think - I disagreed with the policy," he told reporters in Oregon on Saturday.
Even Britain's staunchly conservative newspaper the Telegraph, which backed the Brexit referendum, acknowledged in a column on Sunday that its economic goals had failed.
"Britain's transformation into the new Italy is almost complete," was the headline of the article which drew numerous parallels between the two countries' economic declines and political instability. Britain has had four prime ministers in the last six years, a new trend akin to Rome's notorious revolving door governments.
Officials in Washington last week for International Monetary Fund meetings said the upheaval in London could prove a salutary lesson for high-debt Italy, which has just elected a right-wing coalition also promising unfunded tax cuts.
"We have a lesson to learn perhaps, because what happened showed how volatile the situation is and so how prudent we should be with our fiscal and monetary mix," EU Economics Commissioner Paolo Gentiloni, an Italian, told a news conference without naming Italy directly.
Other officials in Washington were more open, speaking on condition of anonymity. "The UK example of how quickly and aggressively markets can turn on you, is likely to keep Italian policy cautious. I am sure Rome is watching carefully what is happening in the UK," one senior euro zone official said.
2 comments
To be able to write a comment, you have to be registered and logged in
Twelve years in power and the tories are still trying to blame everyone else for their incompetence. If Lizz Truss is the answer they are asking the wrong question. They've become the laughing stock of Europe.
All a bunch of bloody socialist commie foreigners. Clueless about economics. Look how bad they've screwed their economies - as if chasing some sort of ideological fantasy. Rule Britannia.