The mood music out of the eurozone crisis summit was pretty good, the reactions not bad, and so the sense is of disaster averted.
The problem is that further difficult steps now have to be taken, and what happens when they are is far from certain. Europe’s leaders have laid down what should happen, but it doesn’t automatically follow that it will.
So the road ahead remains rocky, and a lot can still go wrong. Leaders also need to do a better job of explaining what is actually happening.
When a crisis like this develops, the political and media class alike make enormous assumptions about the knowledge of the general public. The sums involved are huge, and once we are into talking about trillions, they tend to fly over many heads.
I can remember early on in our time in government briefing the media, both during the Asian economic crisis, and the Russian crisis, and thinking to myself as I did so ‘I don’t understand some of what I’m saying, the journalists don’t want to admit that they don’t understand, and thank heavens that clever chap from the Treasury is here to help me.’
Country by country, issue by issue, leaders should be engaged in some very nuts and bolts communications about what is actually happening and what it means.
In the case of the UK, that means a TV broadcast by PM or Chancellor, with some good old-fashioned graphics, and some nice simple explanations for default, bank recapitalization, bondholder, and all these other words that are central to the crisis.
There you go George, time to show you can connect with Mr and Mrs Normal, who understand their own finances but are currently being asked to take on trust the understanding of Europe’s leaders who have thus far done a pretty poor job at crisis management and crisis explanation.