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UK's Brown urges Europe to go for growth

Published 11/22/2009, 07:01 PM
Updated 11/22/2009, 07:03 PM

* Brown to make proposals for new European growth strategy

* Brown promises to keep economic stimulus in Britain

* Brown to host conference to promote investment

By Adrian Croft

LONDON, Nov 23 (Reuters) - Prime Minister Gordon Brown, aware his chances of re-election may hinge on Britain's economy emerging from recession, will call on European leaders on Monday to launch a drive for economic growth.

"Now that the European Central Bank, like the Bank of England, has indicated they expect interest rates will remain low for the foreseeable future, I want to see ... a push for growth," Brown will tell business leaders later on Monday.

"I am calling on European leaders for a renewed focus on delivering European growth," he will say, according to excerpts from the speech released in advance by his office.

Brown and opposition leader David Cameron will both address the annual conference of Britain's main business lobby, the Confederation of British Industry (CBI), on Monday as they try to win over business support before an election due by June.

A poll published on Sunday showed the centre-right Conservatives' lead over Brown's Labour Party slashed to six points, raising the possibility neither party could win a parliamentary majority in the general election. [ID:nGEE5AL0E9]

That would be the worst case scenario for financial markets, which fear the result would be a weak government incapable of taking decisive action to cut public sector borrowing, forecast to hit 175 billion pounds ($263 billion) this year.

EU GROWTH STRATEGY

Brown will publish proposals for a new European growth strategy. He suggests measures could include incentives for new private investment, a push on European-wide research and development, and steps to break down barriers to cross-border business, including in banking and financial services.

Europe should think about how to create the 10 million new jobs the continent needed, Brown will say, and that higher European growth would mean thousands of new jobs in Britain.

In the speech, Brown promises to keep economic stimulus measures in place in Britain until the recovery is established.

"Choking off recovery by turning off the life support for our economies prematurely would be fatal to British jobs, British growth and British prosperity for years," he says.

The Conservatives want immediate action to cut spending but the government says that could endanger recovery.

"Our strategy has to be to go for growth, now and in the long term, supporting the economy while ensuring sustainable public finances," Brown will say.

Britain lags many European rivals in emerging from recession. The British economy shrank by 0.4 percent in the third quarter, but the government still believes it will see growth by the turn of the year.

Analysts see economic recovery as critical to Labour's chances of winning a fourth consecutive national election.

Brown will announce plans to host an international conference in London early next year to promote investment in Britain.

"I want not just hundreds but thousands of Chinese companies in Britain and British companies in China," he will say, noting that 400 Chinese companies operate in Britain.

Cameron told the BBC on Sunday the Conservatives would deliver an emergency budget with 50 days if they win the election. [ID:nGEE5AL0C7]

In his CBI speech, Cameron will emphasize the need for "a growth budget as well as a deficit-cutting budget," a Conservative Party source said. (Editing by Elizabeth Fullerton) ((adrian.croft@reuters.com ; +44 207 542 7947; Reuters Messaging: adrian.croft.reuters.com@reuters.net)) ($1=.6645 Pound)

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