Friday, 11 November 2011
Money, money, money
The European economic recovery witnessed this last year has hit the buffers. Yesterday the troubles over debt caused the EU to slash their forecast for eurozone growth down from 1.8% to just 0.5%. Many economists would regard that figure as optimistic.
With Europe being the area that accounts for about 40% of the UK’s exports this forecast is bad news indeed. The whole of continent could face recession next year. Certainly, the Office for Budget responsibility is almost certain to downgrade its growth figures for the country.
Recession is a real possibility. The UK government needs to to take action on two fronts, a plan B of capital works needs to be embarked on to kick-start our economy and it needs to be thinking of measures to keep our banking system going should the eurozone fall apart and the banking systems go into free fall.
Its not just the Westminster government that needs to respond to the economic crisis but our devolved institution needs to take stock of the consequences for Wales.
It is a fact that in hard economic times Wales is particularly vulnerable. With the lowest level of Gross Value Added, the measure of output and services, of any part of the UK, the economic downturn will hit Wales particularly hard. In the words of the Max Boyce “Duw, times are hard.”
In these turbulent economic times the discussions taking place in Wales over next year’s budget becomes critical. This is not a time for the parties to be scoring political points but a time for government and opposition parties to get together to promote a budget that will mitigate to some degree the pain that many are experiencing or are about to experience as the economy comes to a full stop.
Yesterday, the Labour leader, Ed Miliband, called for an emergency EU leaders' summit this weekend, arguing the meeting should not end until an agreement is reached.
Equally in Wales Carwyn Jones should convene a meeting of the other party leaders and sit down and agree a programme for the Welsh economy and that should be the priority for next year’s budget. Now is the time for confident action by our politicians.