It is extraordinary that the International Monetary Fund has so publicly slapped one of its chiefs. “It is really special that the IMF is standing strong against one of the important countries in the fund and saying that this is absolutely wrong economic policy with great risks,” says de Grauwe.
According to the economist, the political consequences of the Conservative government are enormous. The credibility of that government has collapsed.”
The radical change of course in London has much to do with the struggle for leadership of the Conservative Party in recent weeks. According to de Grauwe, Liz Truss put forward radical solutions such as lower taxes and state minimums to win over more party members. “This is very common in the Conservative Party,” he says. “But in the end, only 100,000 people voted good.”
Moreover, according to de Grauwe, Truss allowed himself to be surrounded by people who believed in a minimalist state. “But now it’s stuck.” How do you get out of trouble? De Grauwe does not rule out the possibility that Truss will eventually have to take a turn, which the current British Prime Minister has not been ashamed of in the past: in 1994 she was still in favor of the abolition of the monarchy, while she is now calling “His Majesty’s Government”. Lead.
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