LONDON (Reuters) - Chancellor George Osborne said on Thursday that the European situation was unstable because of debts and deficits, but Britain had a credible plan to help keep interest rates down.
“The European situation is unstable as you can see with what is happening in Portugal, and this is because of debts and deficits,” he told Sky News television.
“These are not two separate stories, Britain has a higher budget deficit, more debts in that respect every year than countries like Portugal and yet we manage to keep our interest rates right down to those closer to Germany’s because we have got a credible plan.”
On Wednesday, Portuguese Prime Minister Jose Socrates submitted his resignation to the president after parliament rejected new austerity steps that he had hoped would convince markets Lisbon was getting to grips with its budget deficit.
On the same day, Osborne said he was sticking to his government’s strict austerity measures.
Writing by Avril Ormsby; Editing by Keith Weir