Budget black hole at heart of George Osborne’s finances – FT.com

English: George Osborne MP, pictured speaking ...

English: George Osborne MP, pictured speaking on the launch of the Conservative Party manifesto for the 2009 European Parliament elections, at Keele University. (805×1207 px, 283,711 bytes) (Photo credit: Wikipedia)

This is an important story from the FT that’s well worth a read. Check it out!

Budget black hole at heart of George Osborne’s finances – FT.com.

Clearly, Chancellor Osborne is relying upon more “slash and burn” or top-slicing, rather than looking at strategic options of consolidating departments. Once again front-line services will suffer. There seems to be a backlash against special protection for health, welfare and foreign aide.

For me there seems to be confusion between capital budgets and operating budgets. Keynesians will argue there there is separate financial case for increasing capital spending in carefully costed and risk assessed programs. With historically low borrowing costs, there must be huge opportunities for positive net present value on these programs; this would contribute to growth very effectively.

There would appear to considerable room for the media to challenge George Osborne to take a more intelligent approach to cost cutting and investment for the future. There is enormous room for consolidation in both central and local government, taking out layers of management and protected inefficient practices. Public Sector pensions are another protected cow; why?

Do you agree that a vision is required, supported by proper strategic analysis and delivery, including widespread outsourcing?

This week we have seen evidence linking austerity to increased suicides. Surely, there are more intelligent options than Chancellor Osborne’s Plan A?

What do you think?

 

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Anti Euro Party Alternative for Germany a Growing Problem for Merkel – SPIEGEL ONLINE

Angela Merkel, the Chancellor of Germany

Angela Merkel, the Chancellor of Germany (Photo credit: Wikipedia)

This is an excellent article from Spiegel Online and well worth a read. Check it out!

Anti Euro Party Alternative for Germany a Growing Problem for Merkel – SPIEGEL ONLINE.

The article provides some useful insights into German politics ahead of the September election. For me, perhaps the most interesting comment was about the  German Chancellor‘s anger at drawing attention to the anti-Euro party that favors leaving the Euro. Whilst I accept that Angela Merkel is an excellent leader and very shrewd politically, it worries me that she is described as being “angry”. Is Angela Merkel perhaps in denial about the Euro crisis?

Off course, German domestic politics is very different to international politics. Within Germany, there is perhaps the prevailing view that Germany has done too much to bail out the weaker countries of Southern Europe. On the other hand, the international view is that Germany has not done enough to reflate her economy to ease the pain of austerity in Southern Europe.

Against this polarization of views, it is not surprising that Angela Merkel is worried about the anti-Euro party that favors leaving the Euro.

I would be interested in your views on the following question:

Is Angela Merkel in denial about the Euro crisis?

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