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Cameron says UK must fix economy to retain global influence

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David Cameron

Britain’s global influence is not in decline but the country must repair its economy quickly to remain a leading actor on the world stage, Prime Minister David Cameron will say Monday.

Just back from a trip to China and a G20 summit in South Korea, Cameron will highlight Britain’s economic and military strength and close ties with the United States and Europe in an effort to dismiss fears that its star is fading.

Britain is recovering from its worst recession since the Second World War and, although growth has been strong this year, a slowdown is expected in 2011, largely because of the government’s efforts to slash a record budget deficit.

Bank of England Governor Mervyn King said last week that Britain would have to rely heavily on overseas demand and global economic developments to sustain its recovery.

“Whenever I meet foreign leaders, they do not see a Britain shuffling apologetically off the world stage,” Cameron will say in a speech in London, according to extracts released in advance by his office.

“On the contrary, they respect our determination to get our economic house in order … We need to sort out the economy if we are to carry weight in the world.”

Cameron’s Conservative-Liberal Democrat coalition, in power since May, has announced an ambitious austerity plan, calming financial market concerns over a budget deficit of 11 percent of national output.

HARD-HEADED APPROACH

The coalition plans to cut 81 billion pounds from government ministries’ spending over four years and to raise taxes. It is counting on the private sector to drive recovery as the public sector shrinks and sheds jobs.

The financial sector, which helped drive growth before the credit crunch, is still struggling to find its feet and bank lending to companies remains constrained.

Opposition Labour politicians and some economists have said the speed and severity of the coalition’s attack on the deficit, with the aim of almost eliminating it before the next election in 2015, could drive Britain back into recession.

“The faster we can get our domestic house in order, the more substantial and credible our international impact is going to be,” Cameron will say, defending the deficit reduction measures.

Cameron has recalibrated British foreign policy to focus on fostering business ties across the world in an effort to boost exports, and his government’s spending cuts are also likely to lead to a change in military priorities.

“We have to be more strategic and hard-headed about how we go about advancing our national interests,” he will say.

“More commercial in enabling Britain to earn its way in the world once again … More strategic in its focus on meeting the new and emerging threats to our national security.”

Britain has had a lower profile among global policymakers since then Prime Minister Gordon Brown hosted the G20 summit in London in April 2009, during the financial crisis, but Cameron will say Britain remains at the top table.

“What I have seen in my first six months as prime minister is a Britain at the centre of all the big discussions,” he will say. “Producing the ideas. Consulted for our experience and respected for the skills we bring and our capacity to find solutions. So I reject the thesis of decline.”
Source: Reuters

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