Governor of the Bank of England: America Shares Some of the Same Problems as Greece with its Public Finances

Mervyn King, Governor of the Bank of England, made some surprisingly blunt and straightforward comments at his Inflation Report press conference yesterday, The Telegraph reports.

Apparently, it’s not just the U.K. deficit and the EU sovereign debt situation that so concerns Mr. King. He also worries about America. Particularly worthy of note is his warning to U.S. and U.K. governments about their large fiscal deficits.

“America, and many other large economies including the UK, share some of the same problems as Greece with its public finances”, said King.

King added that “every country around the world is in a similar position, even the United States; the world’s largest economy has a very large fiscal deficit. And one of the concerns in financial markets is clearly – how will this enormous stock of public debt be reduced over the next few years? And it’s very important that governments, both here and elsewhere, get to grips with this problem, have a clear approach and a very clear and credible approach to reducing the size of those deficits over, in our case, the lifetime of this parliament, in order to convince markets that they should be willing to continue to finance the very large sums of money that will be needed to be raised from financial markets over the next few years, at reasonable interest rates.”

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