Daily Austerity Watch: The U.K.’s Austerity Crisis

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from 24/7WallStreet:




Daily Austerity Watch: The U.K.’s Austerity Crisis
Posted: May 4, 2011 at 10:49 am


That great economic sage Mary Poppins memorably sang that it “takes a spoonful of sugar to make the medicine go down.” Residents of the fictional nanny’s homeland, the United Kingdom, will need a lot more than that the digest the government’s controversial austerity policy.

Voters head to the polls for local and regional elections and media reports argue that the Liberal Democrats — who govern in a coalition government with the ruling Conservative Party — will lose badly. If the vote causes the coalition to break, investors may worry that the U.K. austerity policies, which seek to realize 111 billion pounds by 2015, may be imperil. Given what’s going on in more cash-strapped countries in Europe such as Ireland, Greece and Portugal, that’s a healthy fear.

Meanwhile, unions are vowing a fight. Thousands of activists crowded into London’s Trafalgar Square to protest the government’s policy, which among other things will trim 500,000 public sector jobs and slash social benefits to millions of Britons along with raising some taxes. Though their power has diminished, U.K. unions still wield considerable political clout. U.K. union membership stands at 6.6 million.

Mark Serwotka, the general secretary of the Public and Commercial Services Union, told The Telegraph that he thought the cuts were unfair and uncessary. .............(more)

The complete piece is at: http://247wallst.com/2011/05/04/daily-austerity-watch-the-u-k-s-austerity-crisis/#ixzz1LOdgHOd8

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