Member News
Governments around the world must keep spending in order to tackle the recession, the chancellor has said.
Alastair Darling spoke to the Independent ahead of a meeting of G20 finance ministers in London tomorrow.
"My view is that the biggest single risk to recovery is that people think the job is done," he said.
The French and German economies have emerged from recession before the UK and their governments want to cut back on stimulus spending.
"There are encouraging signs that the joint action we have taken in the last 10 months or so is having an effect," said Darling.
"We are beginning to see the fruits of that action. But it is too early yet [to abandon it]. We must not get ahead of ourselves."
The chancellor was broadly supportive of German and French plans to restrict the kind of behaviour by banks that led to the credit crunch.
"The French would appear to restrict this [new] regime to a certain class of banks – large complex ones," Darling said.
"I believe this policy should be good for all banks. What is good for one is good for the lot."
On Wednesday, London mayor Boris Johnson attacked French and German plans to increase regulation for banks.
"It's always open to people to construe it as a naked attempt by Paris and Berlin to attack the competitiveness of the City of London," he told the BBC.
"I do think that people who are suspicious of the motives of some of the other European governments in seeming to want to apply this directive in the way that they have - those suspicions in my view are not wholly unfounded."
Darling, meanwhile, told the Independent that he stands by his Budget estimate that the British economy will grow by between 1.25 and 1.5 per cent next year.
Dods Parliamentary Communications Ltd