British Prime Minister David Cameron Speaks to ABC's Diane Sawyer

DAVID CAMERON: Yes, his frankness, actually. We had -- it's the first time we'd met, so the calmness. He was -- you know, if I was in his shoes, I was meeting some opposition politician, 'cause I wasn't in government then. You know, you want to get back to the United States, but we had a good hour proper long session, discuss things. So the calmness. Also the frankness about his prospects in the elections. He was very frank about the problems he had to overcome, in terms of -- you know, people's beliefs about him and his background and his name and all. I remember him being very frank about that. And I thought that was -- that was great, actually, to have such a frank assessment, such a calm assessment of all the problems you have to overcome to win. And -- and he won big.

DIANE SAWYER: You talk about the economic problems and the budgetary problems. You have declared it a kind of age of austerity now for Great Britain. And you have talked about cuts that make eyes pop open here in the United States, 20 to 25 percent cuts across so many of your government programs, including some in defense as well as tax increases, which again, stupefy a lot of Americans that you can do that right now.

Here's the question. As we know, the Obama administration has expressed the feeling that it is too soon to start cutting and start cutting toward real austerity. They think it's still a time for stimulus. Do you think the United States is just wrong?

DAVID CAMERON: No, I don't. I mean, there are -- we're different countries. We have -- different needs and we're going to do things at different speeds. You know, America is still a reserve currency. You guys can run -- a bigger deficit for longer than we can. But you know, this year, we are borrowing more than virtually any other country in the G20. We're actually borrowing this -- more this year than Greece. So it's necessary for Britain to tighten its belt and to prove that we can live within our means. And -- having won the election on that basis and formed a coalition government on that basis, I want to demonstrate that that's what we're going to do.

DIANE SAWYER: But did the president and his team indicate to you that they were worried that this was going to trigger a second dip in the recession, that this would be the very trigger that suddenly turned everything down again?

DAVID CAMERON: What the president said to me was that -- he -- he understood why different European countries have to do things at different speeds. At the G20, what was discussed was how we all need to deal with our deficits. Some have to move earlier than others. And the G20 specifically endorsed that. And if anyone has to move early, it's us, 'cause we've got the biggest budget deficit.

And also we've got to correct the imbalances in the world. We need the Chinese to -- you know, spend more, save less -- consume more and not be so focused on exports. There are big changes we need in the world. That's what the G20 concluded. So there's no differences between Britain and America on this issue. There's just the difference of timing. But our timing is, we need to get on with it. And when I stand back from it, I think, "This is right."

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