The UK is beginning to look jinxed to some foreign observers as they review the wreckage of last week’s mini-budget.
A headline in Spain’s El Español’s reads: “21 days with Liz Truss: the pound falls, the Queen dies and the UK has been weakened more than ever since Brexit.” The newspaper reckons that Boris Johnson’s parting shot of “Hasta la vista, baby” now sounds like a “curse”. It says Truss’s first three weeks in office “could not have been more catastrophic”.
The German tabloid Bild is also struck by Britain’s series of calamities. It says: “First Boris Johnson falls, then the Queen dies – and now the British financial system is also shaking.”
It notes: “The turbulence on the foreign exchange markets is causing even the most diehard traders to lose sleep,” and gleefully adds: “The Brexit British currently have a nasty money problem.”
It is not just the German press that are revelling in some post-Brexit schadenfreude. El Español says the “UK seems to have imploded”, adding:
It should be remembered that the British voted in favour of ‘Brexit’ in the belief that they would take control and become a stronger country if they managed to throw off the yoke of Europe. Well, the exact opposite seems to be happening. And now that they are no longer under the protection of Brussels, they have no right or access to aid from the 27. If they want to overcome the crisis in which they are immersed, they will have to do it by themselves.
European politicians have seized on what appears to be a failed experiment taking place across the Channel.
“I am worried about the British situation,” France’s economy minister, Bruno Le Maire told Europe 1 Radio on Friday. “It shows there are costs for financial and economic policies. When you take on major costs like that, with spectacular announcements, as some opposition parties want to do in France, it perturbs the markets. It perturbs financial balances.”
Also on Friday, Oscar Arce, a director general of the European Central Bank, was asked whether he worried about “financial contagion” coming from the UK. He said there were no signs of it yet, but added: “Whatever happens in the UK will have some impact on our economy.”
The Nobel prize-winning economist Paul Krugman says “Trussonomics is deeply stupid”. But he warns against “hyperventilating”. In a tweet he says: “It won’t cause a global crisis – for God’s sake, Britain is only 3.2% of world GDP. And while British markets are a mess, we’re a long way from 1976. Get a grip.”
Trussonomics is deeply stupid. But there seems to be a lot of hyperventilating going on. No, it won't cause a global crisis — for God's sake, Britain is only 3.2% of world GDP. And while British markets are a mess, we're a long way from 1976. Get a grip.
— Paul Krugman (@paulkrugman) September 28, 2022
An article in the respected US magazine Foreign Policy says Truss is making Britain look like Argentina. It cautions that the ideologically driven prime minister could be tempted into a trade battle with the EU over the Northern Ireland protocol. But it warns that such a ploy would end badly.
“Truss, who is a diehard Thatcher fan, might even imagine it could be her Falklands war moment – standing up to an ancestral enemy in the name of the motherland. It could be, but her role would be that of reckless Argentina, not victorious Britain.”
Similarly, the Irish Times columnist Stephen Collins says: “The danger facing the UK now is that it could in time become the Argentina of Europe. It should not be forgotten that Argentina was once among the richest countries in the world but generations of bad political decision-making has brought it to its current sorry state.”
Collins adds: “The emergence of Liz Truss as prime minister and Kwasi Kwarteng as the chancellor of the exchequer committed to a low tax, low regulation economy is the logical conclusion of Brexit, but it is the decision to fund public services at their current level through massive borrowing that has really spooked the financial markets.”
France’s Le Monde says Truss’s first weeks in charge have been “spectacular and catastrophic”. It adds: “By destroying the economic credibility of the British right, Truss is rolling out the red carpet for Labour, which, after 12 years in opposition, is dreaming of Downing Street.”
The Times of India suggests the Conservative party should have picked Rishi Sunak as leader. It notes: “The Indian-origin former chancellor had warned against much of the economic turmoil unleashed by the new incumbent at 10 Downing Street.”
