UK Economy May Be Allowed To Crash And Burn Like US Banking Giant
Analysts, Economists: Britain May Become Lehman To Greece's Bear Stearns
Tuesday, May 11th, 2010
“The big question I am asking myself is whether Greece is Bear Stearns” Anthony Fry, senior managing director at Evercore Partners, told CNBC.
“What I really fear is that if Greece is Bear Stearns then the UK is Lehman Brothers.” Fry, who previously worked for Lehman added.
While other economists disagree, indicating that the UK can and will continue to devalue and print money, Fry believes the country's huge deficit puts it firmly at risk.
“I can’t believe (the UK) can avoid trouble," he said. "The current coalition talks are like arguing over a birthday cake.” Fry said, alluding to the ongoing negotiations between the political parties following the indecisive election last week.
“Once they decide how much of the cake they get they realize no one bothered to bake the cake.” Fry added.
“My big fear is that after (Chancellor of the Exchequer) Alistair Darling refused to support the EU/IMF/ECB bailout of the euro zone bond market, the euro zone may stand by and do nothing when the UK gets into trouble,” he said.
Fry's warning is particularly pertinent following comments by senior French policymaker Jean-Pierre Jouyet, who today indicated that Britain will be punished for refusing to fully sign up to the trillion dollar bailout of the eurozone, despite pledging €60bn in taxpayer funds.
“The English are very certainly going to be targeted given the political difficulties they have. Help yourself and heaven will help you. If you don’t want to show solidarity to the eurozone, then let’s see what happens to the United Kingdom,” the head of the French markets regulator told Europe 1 radio.
Anthony Fry added that he expects to see a strengthening of the Euro through consolidation and centralization of fiscal policy in Europe, echoing comments made yesterday by other leading bankers and economists.
“Talk of the euro breaking up is nonsense," Fry said. "What we will get is tighter fiscal cooperation. If Germany is lending money to Spain it will demand tough measures on spending.”