UK Fearing Similar Fate to Greek Tragedy

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The British pound is tottering. The economy finds itself in its worst crisis since 1931, and the country came within a hair’s breadth of a deep recession. Speculators are betting against an upturn. Instability in the banking sector has had a more severe impact on government finances in Great Britain than in other industrialized countries. London’s budget deficit will amount to £186 billion (€205 billion, or $280 billion) this year — fully 12.9 percent of gross domestic product.

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The country that was once referred to as “Cool Britannia” is in a serious crisis, with a hole in its budget even bigger than Greece’s budget deficit, now at 12.2 percent. And nobody knows how to fix the problem.

Indeed, the problem has become so worrisome, that the European Commission told London to do more to tighten its budget, according to a draft report leaked to Reuters.

“The fiscal strategy outlined in the United Kingdom’s convergence program does not foresee the correction of the excessive deficit by the fiscal year 2014/2015, as recommended by the Council,” the European Commission said in a statement.

To complicate matters, Britons will go to the polls in a few weeks, probably on May 6. The next prime minister will have his work cut out for him: reducing the massive budget deficit, restructuring the banking industry and successfully reorienting the economy. And he’ll have to do it all on a shoestring budget.

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