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Ken Clarke: US and Europe paralysed by financial crisis Ken Clarke: US and Europe paralysed by financial crisis
(about 3 hours later)
Political leadership in Washington and Western Europe has suffered "paralysis" in the face of the financial crisis, UK Justice Secretary Ken Clarke has said. Political leadership in Washington and Western Europe has suffered "paralysis" in the face of the financial crisis, former Chancellor Ken Clarke has said.
He told BBC Two's Newsnight that governments had been "overwhelmed" by the scale of the crisis.He told BBC Two's Newsnight that governments had been "overwhelmed" by the scale of the crisis.
Mr Clarke, a former chancellor, said the UK's fate partly depended on "how these people sort it out". Mr Clarke, now justice secretary, said the UK's fate partly depended on "how these people sort it out".
On Thursday Christine Lagarde, head of the International Monetary Fund, warned of a "dangerous" new economic phase. His comments come as EU finance ministers meet in Poland on Friday amid fears for the global economy.
US Treasury secretary Timothy Geithner is also due to attend the gathering in the city of Wroclaw.
Mr Clarke told the BBC: "The political leadership in the United States of America and large parts of Western Europe has been totally overwhelmed by the dimensions of this global financial crisis, it's not able to cope.Mr Clarke told the BBC: "The political leadership in the United States of America and large parts of Western Europe has been totally overwhelmed by the dimensions of this global financial crisis, it's not able to cope.
"You have paralysis in Washington, and you have paralysis in large parts of Europe because they are incapable of agreeing, everybody's fighting short-term politics."You have paralysis in Washington, and you have paralysis in large parts of Europe because they are incapable of agreeing, everybody's fighting short-term politics.
"I don't think the British government comes out too badly when you make that comparison. But our fate partly depends on how these people sort it out.""I don't think the British government comes out too badly when you make that comparison. But our fate partly depends on how these people sort it out."
It comes as five central banks announced a co-ordinated move to ease the European banking crisis and as the European Commission predicts that growth in the eurozone will come to a "virtual standstill" in the second half of 2011. Credit rating
Ahead of the Ecofin meeting on Friday, current Chancellor George Osborne will tell a business conference in Manchester that the UK is "not immune" to the economic issues in Europe and the US.
"America and the Eurozone are our two biggest export markets", Mr Osborne is expected to say, but he will add he is confident the UK can "weather this storm".
Mr Osborne is also expected to say that the current problems in the world economy will not lead to a change in the government's efforts to cut the deficit.
"Our deficit reduction plan has delivered lower interest rates and protected our credit rating... If we abandoned it now there would be a collapse in that confidence and a surge in interest rates," Mr Osborne is due to say.
Labour have accused Mr Osborne and Prime Minister David Cameron of "standing on the sidelines" rather than delivering the "global economic leadership" needed.
The meeting of finance ministers comes as five central banks announced a co-ordinated move to ease the European banking crisis and as the European Commission predicts that growth in the eurozone will come to a "virtual standstill" in the second half of 2011.
On Thursday Christine Lagarde, head of the International Monetary Fund, warned of a "dangerous" new economic phase, adding there was a "lack of resolve" among policy-makers to tackle longer-term problems.
Ms Lagarde said the level of indebtedness among European countries was "knocking the wind out of the recovery".
Deputy Prime Minister Nick Clegg warned this week that the international situation had "changed dramatically" - due to severe external pressures such as the eurozone debt crisis and rising oil prices - and the economic context was "much worse than before".Deputy Prime Minister Nick Clegg warned this week that the international situation had "changed dramatically" - due to severe external pressures such as the eurozone debt crisis and rising oil prices - and the economic context was "much worse than before".
In the US political wrangling over the debt ceiling brought the country to the brink of default and caused much consternation in the financial markets.In the US political wrangling over the debt ceiling brought the country to the brink of default and caused much consternation in the financial markets.
And the markets have been alarmed at inaction in the eurozone amid fears that Greece will default on its debt.And the markets have been alarmed at inaction in the eurozone amid fears that Greece will default on its debt.
Labour has accused Chancellor George Osborne and Prime Minister David Cameron of "standing on the sidelines" rather than delivering the "global economic leadership" needed.