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Osborne said economic performance in the euro
zone was a cause of "real worry and concern", particularly in
Britain whose main export markets are in the bloc.
"There is definitely more concern around about the state of the
global economy than there was a few months ago, you see that not
just when you talk about Europe," he told an audience of
business leaders in London.
"Japan has gone into recession and there are all the
geopolitical risks out there."
Earlier this week, British Prime Minister David Cameron said
"red warning lights" were flashing over the state of the global
economy. Britain's opposition Labour party said he was "making
excuses" for a slowdown in Britain's growth rate ahead of
national elections in May.
Speaking at the same event as Osborne, Italian Economy Minister
Pier Carlo Padoan said he was confident that monetary policy was
being used to do "whatever it can" in the euro area to support
the recovery and move the inflation rate towards its target.
Padoan said progressive integration within the European Union
had been a key driver of growth and jobs over the last decade
and plans for a capital markets union would help continue this.
The EU's new financial services chief has said he wants to
create an integrated market for raising money through bonds,
shares and other financial instruments over the next five years
and will set out his plans by the middle of next year.
Channelling more money into small companies is seen as crucial
for Europe's efforts to boost its fragile economy because small
and medium-sized enterprises provide two out of every three
private-sector jobs in the EU.
"What we need to do is to take decisive action towards further
integration of capital markets which are an essential instrument
for growth," Padoan said.
Osborne said there had been "a marked improvement" in financial
and credit conditions in Britain but more needed to be done,
particularly for small and medium-sized businesses. Europe as a
whole was still too dependent on bank credit as source of
finance for businesses, he said.
"There is a real opportunity," he said of plans for capital
market union. "Let's not turn this into a bureaucratic exercise
or an empire-building exercise in the European Union, let's turn
it into a growth-promoting exercise to support the expansion of
businesses."
(Editing by Stephen Addison)
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