Last night, Portugal’s parliament voted to reject its latest measures to deal with its
deficit. It was the fourth time that the Portuguese parliament had been asked for more taxes and for more spending cuts. The result has been a further loss of confidence in Portugal’s ability
to pay its debts. Market interest rates have risen to over 8 percent. European leaders are meeting this weekend to work out a path forward. The lessons for us here in the UK are starkly clear.
First, it is better to set out all the difficult decisions needed to deal with the debt crisis, even if these take place over a number of years, rather than continually going back to ask for more. That the Budget was neutral overall shows that a clear plan is being followed here.
Second, to budge from the course of living within our means would lead to sharply higher interest rates.
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in