Britain’s political and economic turmoil has been met with little-disguised satisfaction among pro-European and left-wing politicians abroad, with some commentators drawing parallels to chaotic Italy.
Britain’s new Chancellor of the Exchequer Jeremy Hunt unveiled a series of budget measures on Monday, two weeks ahead of schedule, in his race to stem a dramatic loss of investor confidence in the government of Prime Minister Liz Truss.
“How’s Brexit going?” veteran Belgian politician Guy Verhofstadt, an ardent pro-European, tweeted on Saturday. “One thing is certain: the mess didn’t start in 2022, but in 2016,” he added, referring to Britain’s referendum on leaving the EU.
Spain’s Prime Minister, Socialist Pedro Sánchez, referred to Truss’s original proposals on tax cuts as the British crisis unfolded last week.
“And we also affirm that the opposite path, which is neoliberal life, failed in the previous crisis, created a lot of suffering and will once again lead those who follow it to failure, as we have just seen in the United Kingdom,” he told Spanish parliamentarians.
On Friday, Truss fired his Chancellor of the Exchequer, Kwasi Kwarteng, and replaced him with Hunt, scrapping parts of the government’s economic package, after it caused a meltdown in financial markets, including a sharp drop in the value of the pound.
With the Conservative party plummeting in opinion polls, social media has been abuzz with memes and jokes that revel in their troubles.
“Have you heard that Kwasi Kwarteng has come back from the US first class? Apparently they didn’t want him in Business or Economy,” read a joke circulating on Twitter (NYSE: TWTR ) referring to the hasty return of Kwarteng from Washington to be fired by Truss.
THE UNITED KINGDOM IS THE NEW ITALY
Outside Europe, US President Joe Biden called Britain’s plan to scrap the 45% top tax rate a “mistake.”
Biden, a Democrat, frequently criticizes the conservative “trickle-down” economic policies associated with former President Ronald Reagan and Republicans in the United States. This theory argues that tax cuts and other aid to large companies and the upper classes will end up benefiting society as a whole.
“I think the idea of cutting taxes on the wealthiest at a time when … I don’t agree with that policy, but it’s up to the UK to judge,” he told reporters in Oregon on Saturday.
Even the staunchly conservative British newspaper The Telegraph, which supported the Brexit referendum, acknowledged in a column on Sunday that its economic goals had failed.
“The transformation of the United Kingdom into the new Italy is almost complete,” was the headline of the article that drew numerous parallels between the economic decline and political instability of both countries.
The UK has had four prime ministers in the past six years, a new trend similar to Rome’s frequent precarious governments.
Leaders who were in Washington last week for International Monetary Fund meetings said the turmoil in London could be a salutary lesson for indebted Italy, which has just elected a right-wing coalition that also promises unfunded tax cuts. .
“Perhaps we have a lesson to learn, because what happened has shown how volatile the situation is and therefore how prudent we need to be with our fiscal and monetary mix,” said Paolo Gentiloni, the EU’s economics commissioner of Italy. at a press conference, without directly naming Italy.
Other senior officials in Washington were more direct, speaking on condition of anonymity.
“The UK’s example of how quickly and aggressively markets can turn against it is likely to call for caution in Italian politics. I’m sure Rome is watching closely what’s happening in the UK,” said a senior euro zone charge.