tightening, from a mixture of spending cuts and/or tax rises, amounting to about £20bn per annum, roughly the equivalent of an extra 5p in the pound on the basic rate of income tax each year. But this is not the end of the matter.

For a start, the fiscal plan is not cast in stone, whatever the Government might encourage you to think. As it stands, the plan aims to bring the budget into overall surplus by the year 2018–19. To a good many judges, this seems to be overly tight. It would not cause a disaster for the public finances or a panic in the markets if the fiscal tightening programme stopped well before this, with government borrowing, although much lower than it currently is, still running at 1pc–3pc of GDP. This would enable the debt ratio to continue to fall, as long as the economy was growing normally and the overall price level was rising rather than falling.

It is true that this government has made disappointingly slow progress in improving the public finances. The deficit peaked at just over 10pc of GDP in 2009–10, but it is still running at 5pc of GDP. The debt ratio has risen inexorably and now stands at 81pc of GDP.

Nevertheless, there is no real fiscal crisis and no need to panic. The worst is over. On current plans, the debt ratio starts to fall in 2016–17 and by the end of the next parliament it will be down to 73pc. The downward trajectory is more than adequate to ensure the continued confidence of the financial markets. It would not matter if debt were set to fall a little more slowly.

The key requirement to retain financial confidence is the belief that the economy will continue to grow well. This is as true for the United Kingdom as it is for Greece. The difference is that in Greece, despite the presence of massive excess capacity, under the current set–up, it is difficult to see a vigorous economic recovery. By contrast, in the UK there are good reasons to believe that the economy can grow strongly for many years.

David Fuller's view

I find this a surprisingly upbeat column by Roger Bootle, especially since there is no mention of the elephant in the room, in the form of our UK General Election on 6^th May.  I can only assume he is supremely confident that David Cameron’s Conservatives will gain more seats than Ed Miliband’s Labour Party, even though the Tories have never shown a lead of more than one seat in any of the polls I have seen.  From my perspective, the country would be mad to Labour back into office, but it often does.