In a speech to delegates at the World Economic Forum in Davos, Switzerland, the Prime Minister said it was time to “kill off the spectre” of sovereign debt, noting that the average EU government debt now totalled almost 80 percent of GDP.
Citing the case of the UK, the Prime Minister said that recent levels of borrowing were “unsustainable” and that “action cannot be put off” if the country is to refocus its economy - an economy based on savings and investment with a new emphasis on manufacturing, exports and trade.
The Prime Minister said:
“Not long ago we were heading towards the danger zone where markets start to question your credibility.
“Yet in the past eight months we’ve seen our credit rating - which was on the brink of being downgraded - affirmed at the triple A level.
“We’ve seen market interest rates - which were in danger of spiralling - actually fall. All this has happened not in spite of our plan to cut the deficit, but because of it. That’s why we must stick to the course we have set out.”
He added that there was a need to prioritise growth and “unleash enterprise”, and that the UK was taking measures to achieve this such as cutting corporation tax and small business rates. Large UK trade delegations were sending out the message that “Britain is back and open for business”, he said.
The Prime Minister also stressed the importance of innovation and of the need for the EU to pursue an aggressive trade policy. Referring to ongoing talks in the Doha round of trade negotiations, the Prime Minister said that 2011 would be a “make or break year” and that all sides needed to put “more on the table”.
Concluding his speech, he said:
“My message today is one of confidence. We are an open, trading continent. We have a proud record of invention. We’ve got advanced democratic values.
But yes, we’ve got to recognise that Europe has got to earn its way. The world doesn’t owe us a living.
“So let’s make the choice to do things differently, to fight for our prosperity. If we set our sights high if we take bold decisions in deregulation, on opening up the single market, on innovation and on trade then together we can defy the pessimists and together, recover our dynamism.”
Read the full speech on the Number 10 website
Lord Green, Minister of State for Trade and Investment, is attending the World Economic Forum with Prime Minister, Deputy Prime Minister, Chancellor, Secretary of State for International Development and the Duke of York.
Lord Green has taken part in key bilateral meetings during the forum, in support of the PM’s objectives for promoting global growth, and the UK as a place to do business.