Taxes must rise to manage debt, warns leading economist
EUROPEAN governments will have to raise taxes and slash public spending to cope with the massive debts built up in the recession, a leading economist warned yesterday.
Growth alone is unlikely to be strong enough to cut countries’ debt burdens, said Pier Carlo Padoan, chief economist with the Paris-based Organisation for Economic Cooperation and Development global monitoring body.
While his remarks focused on EU countries which have adopted the euro, his warnings will also be seen as relevant to Britain which has built up record deficits and where only modest economic growth is expected next year.
He said: “In my opinion cutting spending won’t be enough. An increase in taxes is inevitable.”