Britain follows eurozone's cost-cutting lead---from ABC news

Britain follows eurozone's cost-cutting lead

By Europe correspondent Philip Williams

Britain is planning to cut more than 6 billion pounds of spending (AFP: Shaun Curry, file photo)

Britain's new coalition government has promised swift action on the national deficit as it delivers a raft of cuts to government spending, travel, IT and an end to Britain's baby bonus.

"In the space of just one week we have found and agreed to cut 6.25 billion pounds of wasteful spending across the public sector," new chancellor George Osborne said.
"The great majority will go towards cutting the deficit this year."
The savings still leave Britain more than 150 billion pounds in the red this year alone, and the really serious cuts have yet to come.
But Britain is far from alone. The Greek, Spanish, Portuguese and Irish governments have already applied the knife to their spending programs.
Germany is about to do the same, although the German finance minister is hoping to cushion the effect by creating more jobs.
Financial Times reporter Quentin Peel says Germany has a stubborn unemployment rate of 8 per cent.
"What [the German finance minister] says is we have got to try and make the savings by raising our employment rate," Mr Peel said.
"If they can get more workers into the market they might be able to make quite a lot of savings without actually cutting back on things like unemployment benefit, but it is a very tough balancing act."
While European governments sharpen their axes to avoid the sort of market speculation that cost the Greeks their financial independence and pride, they cannot avoid very direct bets on which government will be the first to leave the eurozone.
The bookies are doing just that.
"There will be no gold medals for guessing that Greece are top of the pile after [the] multi-billion euro bailout," bookmaker Paddy Power said.
"They are 11 to 8 favourites to be the first to jump ship and then Portugal comes next at 13 to 8.
"Our very own Ireland were 8 to 1 and that beside Spain, Italy all having their own financial trouble at the moment as well. So things aren't exactly rosy in the garden of Europe at the moment."