MICHELE NORRIS, host:
Back to 2009 now, and President Obama's trip overseas. He's in Great Britain now and will also be visiting France, Germany, the Czech Republic and Turkey. As Mr. Obama travels this week, we'll be adding a little context; checking in on the economy and the lay of the land in each of the stops.
Joining us to talk about Great Britain is Edmund Conway. He's the economics editor at the Daily Telegraph in London. And we're glad to have him with us.
Welcome, Mr. Conway.
Mr. EDMUND CONWAY (Economic Editor, Daily Telegraph): Hello.
NORRIS: Now, we're very familiar with the economic troubles in this country, here in the United States. How is the global downturn playing out in Great Britain? Tell us about what's happening overseas.
Mr. CONWAY: Well, it's very similar, indeed, except that it's about six months behind the U.S. We, in the U.K., are suffering a serious recession, the worst recession for us since World War II. We're seeing many of the same phenomena that you've already seen in the States: rising unemployment, inflation going down toward a negative territory and clearly our financial system has suffered, and we've had to bail out a number of our banks in much the same way.
NORRIS: I want to ask you about the banking sector because in this country, the banks, the large banks are in rather bad odor because many people blame them for the current troubles in the economy. Could the same be said in Great Britain?
Mr. CONWAY: Well, I think there is a sense of recrimination, in the same way that there's been a lot of discord about the bonuses paid out to AIG employees. There was a big fuss over here about the big pension that was awarded to the chief executive, or the former chief executive of Royal Bank of Scotland, which was one of the banks that had to be effectively nationalized by the U.K. government.
And people feel that bankers are one of the prime people behind what happened and what went wrong. And there is a sense that they need to, I suppose, apologize for what went wrong and to be punished, accordingly.
But I think that perhaps the sense of recrimination might be slightly less intense than in the U.S. I think that there is a kind of residual, I wouldn't say trust, but there's certainly slightly more trust in the U.K. in the financial system than I sensed when I've been over in the U.S. on many occasions.
NORRIS: President Obama is traveling to Europe hoping that world leaders will agree to this fiscal stimulus package, agree to spend a unified amount for an economic stimulus package. How likely is Prime Minister Gordon Brown to sign on to something like that? Is he likely to work in lockstep with other countries or peel off and go his own path?
Mr. CONWAY: Well, I think Obama will be slightly disappointed in that aspiration. I think there's simply too much entrenched differences in Europe. Gordon Brown himself, I think, is quite sympathetic to President Obama's idea. The problem is, unlike the U.S., the U.K. simply doesn't have an extra penny to spend on it at the moment because our budget deficit is so high.
And the markets, which obviously fund our budget deficit, are so jittery at the moment. And so, although Gordon Brown is, I think, in spirit behind Obama, he simply can't afford to spend much more himself.
NORRIS: And beyond that, is there sort of a different way of thinking in Great Britain where people have - don't have the same kind of safety net that people in other countries have, that there's less support for the unemployed, for instance?
Mr. CONWAY: Well, I think that's the way it seems because we have a slightly higher level of support for the unemployed than there is in the U.S., but we have slightly less than in Germany and France. But if you look at the figures, actually, the amount that's going to be spent over the next couple of years on people who are unemployed is very significant, indeed. And that's really part of the problem. We're going to face in the U.K. a budget deficit of around 10, perhaps 11 percent of gross domestic product.
And that's about the same proportion as the U.S. is going to spend, even though the U.S. is spending a hell of a lot more on Obama's special fiscal stimulus. So, Gordon Brown, like I said, he has his hands tied, not much room to maneuver. His job, instead, is going to be to try to sit in the middle of the table and make sure that Obama and the European leaders, for instance, Angela Merkel from Germany and Berlusconi from Italy, actually agree with each other and there's no fisticuffs.
NORRIS: Edmund Conway, thank you very much for speaking with us.
Mr. CONWAY: Thanks.
NORRIS: Edmund Conway is the economics editor at the Daily Telegraph in London.
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