Archive for février, 2012

The Critical Financial Sector Debt of the UK.

Samedi, février 18th, 2012

Britain has a net public sector debt which has just hit £1 trillion for the first time and a budget deficit which compares unfavourably with most of the economies recently downgraded by the rating agency Standard & Poor’s. However, Britain is also one of the few countries to retain a triple-A sovereign debt rating and, as a result, pays very low interest on that type of debt, together with others in the triple-A group which includes Australia, Canada, Denmark, Finland, Germany, Hong Kong, Liechtenstein, Luxembourg, the Netherlands, Norway, Singapore, Sweden and Switzerland. This would then appear to be an endorsement of the current deficit-cutting plan of the British government but of course offers no guarantee against a future downgrade if the financial markets, which matter more than the rating agencies, lose confidence.
Concerning the UK debt position as a percentage of GDP, David Smith in his Economic Outlook in the Sunday Times of 22nd January, 2012 presented some interesting figures with which to compare the UK with other economies:
• UK total debt at 507% of GDP is at the level of Japan (512%).
• The total debt of other countries is lower: USA (279%), Germany (278%), Italy (314%), Spain (363%), and Portugal (356%).
• For government debt, the UK is at 81% while Japan is much higher at 226%.
• The UK (109%) and Japan (99%) are similar for corporate debt but France is higher (111%).
• Household debt in the UK stands at 98% of GDP and well above Italy (45%), France (48%) and Germany (60%). The difference is in mortgages with a relatively higher level of owner-occupation in the UK. Similar countries are the US (87%), Canada (91%) and Australia (105%).
• The main problem for the UK debt-wise is in the financial sector at 219% of GDP, almost double the level for Japan, over five times the US figure and three times the level of most other countries. This reflects the position of London as a major financial with a high proportion of major, foreign banks.
Excluding the financial sector then, total debt in the UK is more in the region of 400% of GDP rather than 500% , more manageable but still too high. The financial sector is a critical area which ballooned almost out of control during the boom years and, with the need for the banks to now reduce their debt, also explains the more limited flow of credit to help grow the UK economy.

Speech by Prime Minister on ECHR at Council Of Europe

Vendredi, février 10th, 2012

The full text of the 25th January, 2012 speech by Prime Minister David Cameron to the Council of Europe on reforming the European Court of Human Rights(ECHR), can be found here:
http://www.guardian.co.uk/law/2012/jan/25/cameron-speech-european-court-human-rights-full?CMP=twt_gu
On the difficulties faced by the British government in dealing with terrorism e.g. following the decision of the ECHR the previous week to block the deportation to Jordan of the suspected terrorist Abu Qatada, the Court had rather inconveniently for his speech already found in favour of the government on the most important point at issue. It had concluded that diplomatic assurances from Jordan would be sufficient to ensue that the cleric would not be at risk of ill-treatment.
According to Joshua Rozenberg writing in the Law Society Gazette of 26th January, 2012 (UK Courts have misunderstood a fundamental provis Rights Act), if the government had lost on this point it would not have been able to rely on memorandums of understanding with Jordan or other countries.
The point of contention with the British government was the risk that evidence against Abu Qatada had been obtained by torturing witnesses, ensuring any trial he might face unfair the judges concluded.