BERLIN May 24 British Deputy Prime Minister
Nick Clegg said on Thursday that data showing Britain's economy
shrank more than expected in the first quarter underlined the
need to accelerate efforts to free up investment and credit.
Britain's economy, in its second recession since the 2007-08
financial crisis, contracted by 0.3 percent between January and
March, Thursday's data showed, following a slump in construction
"The revision of the growth figures for the first quarter
was very disappointing," Clegg said during a visit to Berlin.
"I think it is the moment to really shift up a gear to
ensure that, as we maintain market confidence in our plan to
balance the books and rid the UK of its structural deficit, we
do more to ... act as a guarantee to mobilise more investment in
infrastructure and housing and get more credit to the real
economy," Clegg said between meetings with German officials.
"There is clearly a demand issue in the economy," he said.
The International Monetary Fund this week warned about the
risks facing Britain and urged policymakers to boost growth by
whatever means necessary.
Clegg's visit included an unscheduled meeting with German
Chancellor Angela Merkel where they discussed the European Union
summit on Wednesday and her opposition to common euro zone bonds
as championed by the new French president, Francois Hollande.
Euro zone outsider Britain has argued for such
commonly-issued bonds in the single currency area, a view
reaffirmed by Clegg on Thursday.
"Every monetary union in the world has accompanying fiscal
and adjustment measures along with a single interest rate,"
"I understand how difficult the politics is, I totally get
that in Germany where taxpayers have been immensely generous
(financing euro zone bailouts) this is an enormously difficult
issue," he told reporters.
The British deputy leader also met Finance Minister Wolfgang
Schaeuble and other members of Merkel's cabinet and said they
had discussed proposals pushed by France, and to a lesser degree
by Germany, for a financial transactions tax to help assuage the
damage of the euro zone debt crisis.
Britain firmly resists having such a tax on an EU-wide basis
and Clegg said that even the European Commission, which proposes
the tax, had released a study showing it could destroy hundreds
of thousands of jobs in the financial industry.
Clegg is leader of Britain's Liberal Democrats, coalition
partners of Prime Minister David Cameron in the Conservative-led
government which argues that such a tax would go against the
interests of the City of London as a financial centre.
"When you're struggling to create jobs it would be illogical
to introduce a measure whose own proponents say would create
unemployment on that sort of a scale," said Clegg.