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Give Private Sector Chance to Innovate: Tony Blair

Governments that bolstered their countries’ ailing institutions impacted by the financial crisis need to step back and give the private sector a chance to innovate and rebuild, former UK Prime Minister Tony Blair told CNBC Tuesday.

“Although it is correct that the financial sector, or part of it failed, we still need a vibrant, dynamic and innovative financial sector if we are going to make our way in the future,” he said.

“I think the type of state that we require today is one that intervenes, to stabilize [financial institutions], but then sets a framework in which the private sector and the business sector are allowed to get ahead again," added Blair.

“In a way, the danger is that we end up with a clash between the short-term politics, which are all about pointing the finger saying that the markets failed and now the state is back in fashion, and the best long-term policy, which will be for the state to stabilize the banks and offer their necessary monetary and fiscal stimulus," Blair went on to say.

Blair, prime Minster of Great Britain from 1997 to 2007, spoke with CNBC while on a promotional tour for his recently published memoir, "A Journey."