
Leading private equity industry voice Jon Moulton has called for the UK government to “take the pain today for a better tomorrow”.
Speaking at a DLA Piper conference at the London Transport Museum last night, Jon Moulton said that the current European economic crisis is damaging investor confidence and that rising European unemployment levels “cannot be allowed to continue”.Jon Moulton cited the situation in Japan where companies “are allowed to trade on and on”. Around ten per cent of the Japanese workforce is employed by companies that would have otherwise failed. In the UK, he referenced the extremely low levels of liquidations caused by banks trying to avoid write-offs, which is “allowing the competitive advantage to be wrecked due to fear of uprising from unions”. Moulton discussed the UK’s 1976 bailout by the IMF, when the country’s debt-to-GDP ratio was 45 per cent, “We’re now at 62 per cent. In reality we’re worse off than Ireland.” He said that if we sorted the banks out today it would only cost “a few billions in insurance terms”. That action today would take eight per cent out of GDP, but “for a better future we need a worse present”.
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