Here's the full text of a really punchy article in tonight's Evening Standard by George Osborne.
Brilliant lines on the Financial Transaction Tax being "a bullet to the heart of London" and "economic suicide" for Europe if they go it alone. He attacks the “some progress but not enough” mentality of the eurozone's crisis management.
He also confirms that the Autmn Statement will use private cash to fund billions of pounds worth of spending on infrastructure (a top scoop by Isobel in Sunday Times). And there's lots more - so read on.
by George Osborne, Chancellor of the Exchequer
Europe begins this week with more grounds for optimism than last week. New governments are forming in Greece and Italy committed to dealing with their debts and reforming their economies.
However, this remains the most dangerous moment for the world economy since Lehman Brothers went down in the autumn of 2008. Then Britain was one of the epicentres of the crisis, with the biggest bank bailout in the world - Royal Bank of Scotland. Today the epicentre may be across the Channel in the eurozone but the risks to Britain are no less real. Jobs and growth in our country have already been damaged by the euro crisis. In such uncertain times, this Coalition Government's priority is to help Britain ride out this storm instead of being consumed by it.
Eighteen months ago, when I pointed to what was happening in Athens and warned of what would happen here if we didn't deal with our debts, some said, "Don't be ridiculous, Britain and other European countries aren't anything like Greece. We can go on spending." Well, Greece was followed by Portugal and Ireland. Then Spain was in the firing line and now it's Italy under the spotlight. Their cost of borrowing was the same as ours just 18 months ago; today it is almost three times higher.
The markets are even asking questions about France. That's why the French have now had two emergency budgets in four months to try to get ahead of the curve, as we did last year. As a result of their delay they are now being forced to cut faster than Britain over the next two years despite a smaller budget deficit.
When you see what is happening today on the Continent, who any longer seriously thinks the British Government, with a budget deficit forecast to be the biggest in the G20, could have avoided difficult cuts and kept spending? What is happening in Europe is a stark reminder of what a disaster it would have been for us to have taken any other path.
The benefits Britain has won by getting a grip early were spelt out by the front-page headline of the Financial Times last Friday: "Gilt yields fall as UK becomes safe haven". Low gilt yields - the interest rates we pay on our national debt - mean billions saved for taxpayers and lower mortgage bills for families and businesses. Can you imagine what would happen to millions of families' finances if mortgage rates tripled? Can you imagine the damage to businesses and jobs?
Low interest rates and stability are the foundation of recovery but our reductions in business taxes, investment in science and apprenticeships and changes to education and welfare are an acknowledgement that more needs to be done. In my Autumn Statement later this month we will be announcing further reforms to housing and small business lending. A particular focus will be encouraging billions of pounds of private sector investment into vital infrastructure projects. But the biggest single boost the British economy could get would be a resolution of the eurozone crisis.
Since the start of the year we have been urging leaders in the eurozone to stand behind their currency and deal with their problems. Together with President Obama, the Chinese and other countries around the world we called on them to act at the G20 summit in Cannes 10 days ago. We'll play our part, we said, if you play yours. They made some progress but not enough - the recurring pattern of this crisis.
So what must they do? The new governments in Greece and Italy need to show they can implement the tough measures required to deal with their debts and make their economies more competitive. Then the firepower of the eurozone's bailout fund needs to be dramatically increased to see off those betting against the future of the currency.
Whether this is done by the European Central Bank or by eurozone governments themselves is not the central issue; the financial risks of standing behind their currency will ultimately be borne by eurozone citizens. The eurozone has the financial capacity to restore stability. They now need to deploy it without delay.
This is the immediate challenge. If this can be overcome, then over time eurozone countries will have to pool more resources and share more control over each other's tax and spending decisions. Frankly this is a big loss of national sovereignty for those countries. It is one of the reasons I have always opposed Britain joining the euro. But it is the only way to make a currency union work for the long term. Britain will not be part of this fiscal integration, and this Government will ensure that our national interests and our voice in the EU are protected.
As Europe does this, there are responsibilities for the rest of the world as well. In particular the International Monetary Fund must continue to play its systemic role supporting individual countries to the benefit of its whole membership. That is why Britain helped to create the IMF in 1944 and has long been one of its most active supporters. We have to make sure it has enough resources to deal with problems around the world.
Finally, both in Britain and in the whole of the European Union, we must remove the obstacles that stand in the way of jobs and growth. The EU should be promoting open markets and greater free trade. We need to strengthen the single market, particularly in services where many thousands of jobs in Britain could be created by expanding the opportunities in our largest export market.
Europe certainly shouldn't be creating new burdens. Proposals for a Europe-only financial transactions tax are a bullet aimed at the heart of London. Even the European Commission admit that it would cost hundreds of thousands of jobs. This Government is all for making the financial sector pay more in tax. In my first Budget I introduced Britain's first permanent levy on our banks, and we are taking long overdue action against tax avoidance and evasion by the very rich. That is helping us protect NHS spending at home and meet our aid promises to the world's poorest. But the ideas of a tax on mobile financial transactions that did not include America or China would be economic suicide for Britain and for Europe. The EU should be coming forward with new ideas to promote growth, not undermine it. That is exactly what we will be doing in two weeks' time.
