Vince Cable in attack on US 'right-wing nutters'
- 24 July 2011
- From the section Business
Vince Cable has attacked leading US Republican politicians for holding up a deal to reduce US government debt.
Speaking on the BBC's Andrew Marr Show, the business secretary called them "a few right-wing nutters in the American Congress".
Unless a deal on Capitol Hill is agreed before 2 August, the US Treasury could run out of money to pay its bills.
Mr Cable said it presented a bigger risk to the global markets than the continuing debt woes in the eurozone.
President Barack Obama wants to cut US debts by both reducing government spending and raising taxes.
Republicans in Congress are strongly opposed to the tax rises.
The two sides have to come to an agreement before the current $14.3tn (£8.7tn) limit on US borrowing can be raised.
An emergency meeting between President Obama and congressional leaders on Saturday failed to make a breakthrough.
However, US Treasury Secretary Timothy Geithner said on Sunday that he still expected a deal to be reached.
Mr Geithner told CNN: "It's unthinkable that this country will not meet its obligations on time.
"It's just unthinkable we'd ever do that. It's not going to happen."
Yet he added that a Republican proposal to first raise the debt limit and then negotiate the spending cuts was "irresponsible" and would not be agreed by Democrats.
Mr Cable also welcomed the agreement of eurozone leaders to grant Greece a second financial bail-out, but says more still needed to be done.
The business secretary said: "It hasn't solved the big problems, but it was a big step forward."
The new package of financial support for Greece was agreed on Thursday, and totals 109bn euros ($155bn, £96.3bn).
Eurozone leaders also agreed to reduce the amount of interest Greece has to pay on its existing bail-out and the rates on the bail-outs received by Portugal and the Republic of Ireland.
Mr Cable said: "It is very much in Britain's interest that the eurozone succeeds."
Turning his attention to the domestic UK economy, the business secretary said there were increasing signs of growth in the manufacturing sector.
But with the latest official UK economic growth figures out later this week, Mr Cable admitted that the economy still "isn't great".
He called on the Bank of England to consider another round of quantitative easing (QE) to boost economic growth.
Under QE, the Bank pumps new money into the financial system to try to boost bank lending.
Speaking to Sky News, shadow chancellor Ed Balls accused the government of cutting spending at the expense of economic growth.
"Of course the deficit must come down in a steady way but our economy has flat-lined in the last six months, it's not growing," said Mr Balls.
"That's why the chancellor is having to admit that borrowing is going to be higher than he expected.
"In the end, unless you've got more people in work paying taxes, the economy growing, it is very hard to get these deficits down."