An opposition politician has described the UK government’s bail-out plan as consisting of “stunts and wheezes”. This may be unfair but it highlights a tendency among governments battling with defective banks to be over-complex and to play politics rather than focus on simple financial solutions.
Governments around the world continue to put in place ever more comprehensive bailout packages in an attempt to support their beleaguered financial sectors. The UK, France and Denmark all announced new plans in the week beginning January 19. The incoming administration of US president Barack Obama is set to follow suit, say observers.
Early euro adoption plans for countries across central and eastern Europe (CEE) have fallen by the wayside, as loose fiscal policies made it difficult to meet the Maastricht criteria for budget balances and inflation. But in 2008, Slovakia bucked the trend and qualified to enter the eurozone in January 2009.
Uganda’s minister of finance, Dr Ezra Suruma, has overseen a year of strong growth in the face of a series of economic head winds. Gross domestic product (GDP) growth looks likely to hit almost 10% in 2008, well above the African average. Construction and services fuelled economic growth in 2007/08 and exports grew by 50%.
For Panama’s public finances, 2008 started and ended well. In February 2008, rating agency Standard & Poor’s raised the country’s sovereign credit rating to BB+, from BB, citing a budget that recorded a surplus of 2.6% of gross domestic product (GDP) in 2007, compared with a deficit of 5.6% in 2004. Government debt has fallen from 42% of GDP to 32% over the same period.