David Cameron, UK prime minister, has warned of the risk of another global recession, saying the “red warning lights are once again flashing on the dashboard of the global economy.”
His warning coincided with the end of the G20 summit in Brisbane, which saw the leaders of the 19 countries that account for 85% of global GDP committing to about 800 measures to boost growth by 2% by 2018.
Cameron says in an op-ed in The Guardian today that there is now “a dangerous backdrop of instability and uncertainty” that presents a real risk to the UK recovery, adding that the Eurozone slowdown is already having an impact on British exports and manufacturing.
Last week, Mark Carney, Bank of England governor, claimed a spectre of stagnation was haunting Europe while Christine Lagarde, IMF managing director, said in Brisbane that a diet of high debt, low growth and unemployment may yet become “the new normal in Europe.”
“The Eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too,” Cameron writes. “Emerging market economies which were the driver of growth in the early stages of the recovery are now slowing down. Despite the progress in Bali [trade talks in 2013], global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.”
The prime minister added:
We must also make sure that big businesses pay their fair share of taxes. Ensuring these taxes are paid is vital in sustaining the low taxes at the heart of our plan, enabling hardworking families and businesses to keep more of the money they earn. We reached a G20-level agreement to ensure that there is nowhere for large companies to hide to avoid paying the taxes that are due."
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