Europe will end up financing a bailout for the United Kingdom, warns commodities guru Jim Rogers. The debt is simply rising too fast and austerity measures aren’t going to save them.
“They are not doing it. They are saying they are doing it but they are not. They are saving 1 billion pounds ($1.6 billion) here or there but they are not doing what they really need to,” Rogers told CNBC.
“I’m not sure the government would survive the kind of pain that is really required," he said, warning that real austerity would simply result in early elections and a new government.
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“How can the U.K. ever repay the debt that is continually rising? The U.K. will need a bailout soon,” he said.
The government coalition survived local elections Thursday and a referendum to change voting roles seen as helping the Liberal Democrats also failed, meaning they would likely stay in the coalition arrangement with the Conservatives.
The government in October unveiled deep cuts to the British welfare state, equivalent to 4.5 percent of projected growth during a four-year period. The European Commission estimates that the current budget deficit for the United Kingdom is 12 percent of its GDP, higher than any in the European Union and even worse than basket-case Greece, at 9.3 percent.
U.K. budget chief Alistair Darling projects a deficit of 11.5 percent of GDP.
Meanwhile, labor activists are vowing to fight in the streets over the Conservative plan to continue spending cuts, including the loss of half a million jobs and cuts to aid to the poor. They are promising huge protests to come.
"It is important to remember that the real conflict in the world is between the majority who create the world's wealth, and the handful who control the world's wealth. All the gains that have been made have been made by people like ourselves," left-wing activist Tony Benn said in a speech, reported London daily The Telegraph.
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