I was speaking at a dinner last night to businessmen and women who know a lot more about how the economy works than I do. So I was a bit alarmed to see how many were nodding along when I suggested that what was happening in the eurozone was, frankly, downright scary.
Most situations described as crises are not really crises at all. This one is. And though it has been developing for so long, and though it is now staring everyone in the face, there is still no real sense of how ‘world leaders’ and major economic players intend to deal with it.
Remember when Alistair Darling was accused of alarmism when he made some fairly dire predictions for Global Financial Crash 1. Alistair is not prone to overstatement, and he is right again today when he points out the failure to face up to the scale of what is happening. Say what you like about Gordon Brown, but nobody can deny that when GFC1 was upon us, he saw the severity of what was happening, and galvanised world leaders to take difficult and necessary decisions which stopped a bad situation getting worse.
By contrast, when the G20 gathered last week, they neither looked, sounded or felt like the twenty most powerful people in the world. On the contrary, they are being driven by events they appear unable to control or contain. Our own government appears to be as driven by the need to give itself political cover as by the real demands of the situation. ‘All Europe’s fault’ is merging with ‘all Labour’s fault’ as their main economic argument. But it is not a strategy.
There is not the slightest chance of this happening, but as David Cameron and George Osborne survey the economic scene, and the failure of the political and economic leadership of the world to grip it, they could do worse than call in Gordon and Alistair for a private chat over a cup of tea.
Alistair was right in his warnings of GFC1, and he is right in his criticisms over the handling of GFC2.