–EU Member States Risk Exporting Deflation To Each Other
–Says EU Can Look To Regional Trade Deals If Doha Flops
LONDON – EU member states risk exporting deflation to each
other and those in stronger fiscal positions should help boost demand
in Europe, according to UK Business Secretary Vince Cable.
“A simultaneous assault on budget deficits has the effect of
transmitting deflationary pressures across Europe,” he said.
In an address to the European Parliament, Cable also said, however,
that the UK has no other choice than prioritising the reduction of its
budget deficit.
“Governments like mine had little alternative to focus on the
former problem. But unfortunately there is no compulsion on countries
with a stronger fiscal position to support spending, and demand, across
the EU,” he added.
Cable also said he was worried about the slow progress over the
Doha trade talks, but added that the EU had other options available
should the upcoming round fail.
“Failing to make progress on Doha does not make the agenda of
liberalising trade go away. We also have the option of regional Free
Trade Agreements: the almost complete deal with Korea, and good
possibilities in India and Mercosur,” he said.
–London bureau: 44 20 7862 7492; email: wwilkes@marketnews.com
[TOPICS: M$B$$$, MI$$$$, MGX$$$, MFX$$$]
