The U.K. needs to continue its budget-cutting strategy to keep government borrowing costs low, European Union Economic and Monetary Affairs Commissioner Olli Rehn said.
The U.K.’s public debt is approaching levels that are “normally considered to have a drag on growth for quite some time,” Rehn said in an interview with the Times newspaper published today.
“I don’t believe that fiscal-consolidation plans should be reversed, as growth is now set to start to pick up,” Rehn was quoted as saying by the Times. “It is still decisive in affording favorable financing conditions into the U.K. and therefore it should be maintained.”
Rehn also said France is a “borderline” case in terms of its efforts to make structural changes to its economy, according to the newspaper. The Times cited Rehn as saying that the EU’s economic governance rules are not “stupid” and won’t be too severe.
“The rules of the pact are designed to avoid too drastic consolidation in case there is a credible medium-term strategy of fiscal sustainability in place,” Rehn told the newspaper. “That is what we have been calling for from France.”