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15 February 2011

Will George Osborne still blame the snow now?

The bad weather didn’t stop growth in Germany and France.

By George Eaton

George Osborne’s risible attempt to blame the snow for the UK’s poor economic performance looks less convincing than ever. France and Germany have just released their growth figures for the fourth quarter of 2010 and, although both countries suffered heavy snow in December (the Eiffel Tower was closed), their economies expanded.

As the graph below shows, the German economy grew by 0.4 per cent (down from 0.7 per cent in Q3) and the French economy grew by 0.3 per cent (the same rate as Q3). By contrast, in the UK, the economy shrank by 0.5 per cent after strong growth of 0.7 per cent in the third quarter.

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It is absurd of Osborne to boast that Britain has avoided the fate of Greece when so many of our natural competitors are performing well.

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As Philip Stephens writes in today’s Financial Times:

One or two countries in the eurozone have indeed fared worse than Britain since 2007. Ireland and Greece are the notable examples. But this raises another problem. Have Mr Balls and Mr Osborne so lowered their ambitions for Britain as to see Europe’s two smallest economies as the most useful comparator?

The uncomfortable reality is that eurozone countries against which Britain more naturally measures its performance have suffered less as a consequence of the crash. If one goes back further – say, to the creation of the euro in 1999 – the growth performance of the three economies has been pretty much of a muchness.

If Britain is not to become a second-rank European power, we will need politicians with far more imaginative growth strategies than Osborne’s.