SANTIAGO, March 27 (Reuters) - Chile’s President Michelle Bachelet unwittingly embarrassed British Prime Minister Gordon Brown on Friday when she said Chile had put aside money during good economic times to help it through the downturn.
Standing next to Bachelet at a news conference in Santiago, Brown heard Bachelet extol economic policies that Brown’s Conservative opponents at home have repeatedly said he should have followed before the global financial crisis.
“I would say that because of our decision during ... the good times in copper prices, we decided to save some of the money for the bad times and I would say that policy today is producing good results,” Bachelet said in English.
Brown has pumped extra money into the British economy to help counteract the downturn. But the Conservatives say his maneuvering room is limited because he failed to “fix the roof” when the sun shone.
“Gordon Brown is getting lessons from the Latin Americans about sound public finances. You couldn’t make it up,” said Conservative finance spokesman George Osborne.
“The president of Chile is right to point out, as we have done, that countries that put aside money in the good years are the ones that can afford to spend that money now without adding recklessly to national debt.”
Britain went into the downturn with a budget deficit that is now swelling rapidly.
This week the governor of the Bank of England, Mervyn King, warned the government that the soaring budget deficit meant it would have to be cautious about any new fiscal stimulus package to boost the economy. [ID:nLR281306]
Bachelet said Chile had developed two sovereign wealth funds “especially designed for moments like this.”
Brown congratulated Bachelet on her management of the economy, adding that the International Monetary Fund said Britain was better prepared than most countries to face the downturn. (Reporting by Adrian Croft; Editing by Xavier Briand)